Capital measurement stock and flow application at the micro level

Abstract

Fixed capitals are produced assets that are used repeatedly or continuously in production newlineprocesses for more than one year. The fixed capital consists of (i) building and construction, newline(ii) plant and machinery, and (iii) tools, transport equipment and other fixed assets. The newlinefixed capital assets have a wealth value. In a wealth context, the capital stock is the value of newlinestock of physical assets existing at a point of time. Generally, this wealth value is measured newlineby the net fixed capital stock (NFCS). In due course of production, the capital assets newlinenormally depreciate, i.e., lose efficiency over time. Apart from the physical depreciation, newlinethere is another component of value depreciation. Value of a capital asset falls, independent newlineof efficiency loss, simply due to shortening of its remaining lifetime or ageing. The newlinevaluation of wealth capital stock takes both efficiency loss and ageing into account. newline