Transactions in Nonfi nancial Assets 225
Costs of ownership transfer on nonproduced assets other than land (31133)
8.42 Transactions in the costs of ownership transfer
on nonproduced assets^15 other than land are treated
as transactions in fi xed assets because these costs are
considered a produced asset. Th e costs of ownership
transfer on nonproduced assets other than land are
subject to consumption of fi xed capital, which is also
included in this category. However, in the balance
sheet, these costs of ownership transfer, as well as the
consumption of fi xed capital on these costs, are re-
fl ected in the value of the respective nonproduced
assets. Th e additional entries necessary for this treat-
ment are discussed in paragraph 10.83. Th e treatment
of costs of ownership transfer on nonproduced assets
is illustrated in Figure 8.1.
Weapons systems (3114)
8.43 Th e acquisitions and disposals of weapons
systems that meet the general defi nition of assets in-
clude vehicles and other equipment such as warships,
submarines, military aircraft , tanks, missile carriers
and launchers, etc. Th e acquisitions of most single-use
weapons they deliver, such as ammunition, missiles,
rockets, bombs, etc., are classifi ed as transactions in
military inventories and their use as withdrawals from
military inventories. However, some single-use items,
such as certain types of ballistic missile with a highly
destructive capability, may be classifi ed as fi xed assets
(see paragraph 7.74).
Inventories (312)
8.44 In principle, net investment in inventories
(change in inventories) is measured by the value of the
additions to inventories minus the value of withdraw-
als from inventories minus the value of any recurrent
losses of goods held in inventories during the report-
ing period.^16 In general, additions to and withdraw-
als from inventories should be recorded according to
the same principles used for recording transactions
in other nonfi nancial assets. Additions to inventories
are recorded when products are purchased, produced,
or otherwise acquired, and withdrawals from inven-
(^15) Transactions in nonproduced assets are discussed in paragraphs
8.49–8.58.
(^16) Th ese changes in inventories are as a result of transactions. Th e
value of the stock of inventories may also change due to other
economic fl ows.
tories are recorded when products are sold, used up
in production, transferred to a diff erent category of
inventories, or otherwise relinquished.
8.45 In contrast to other nonfi nancial assets, how-
ever, no costs of ownership transfer are included in
the values of additions to or withdrawals from inven-
tories, and no consumption of fi xed capital is attrib-
uted to inventories, as indicated by the shaded area
in Table 8.1. Further, only the net value of additions
minus withdrawals of inventories is usually estimated
rather than separate, gross values for additions and
withdrawals, unlike for other nonfi nancial assets. Th is
estimate of the changes in inventories is used in the
formula to determine an estimate of expense in the
form of use of goods and services (22), as explained in
paragraph 6.29.
8.46 To understand the various transactions in in-
ventories, it is useful to distinguish between two func-
tions performed by a unit: its function as a producer
of goods and services and its function as an owner
of assets. When a good is entered into inventories, it
is acquired as an asset by the unit in its capacity as
owner either by purchase (or barter) or by an internal
transaction with itself as the producer. Conversely, a
good leaving inventories represents the disposal of an
asset by the owner either by sale or other use, by an
internal transfer to the producer, or possibly as a re-
sult of recurrent losses (recurrent wastage, accidental
damage, or pilfering).
8.47 Many transactions in inventories (i.e., addi-
tions to and withdrawals from) are purchases from or
distributions to other units, but other acquisitions and
disposals refl ect internal transactions. All additions to
and withdrawals from inventories, such as for use of
goods or investment in fi xed assets, should be valued
at current market prices. Because of the continuous or
frequent withdrawals from materials and supplies in-
ventories and the additions to and withdrawals from
work-in-progress inventories, information is usually
not available to record these internal transactions ac-
curately, and estimates may be necessary.
- When materials and supplies (31221) are trans-
ferred to a production process, a transaction is
recorded for the withdrawal, which is balanced
by an addition either to work-in-progress inven-
tories (31222), use of goods and services (22), or,
in the case of own-account capital formation, a