Net National Product

Net National Product is the market value of the national goods or products of a country after subtracting the depreciation and is also referred as the capital consumption of the country.

Formula of Net National Product

The formula of Net National Product can be shown as follows:-

Net National Product = Market Value of the Finished goods of the country + Market Value of the

services of the country – Depreciation

There is also an alternative method of calculating Net National Product through which this can be calculated as follows:-

Net National Product = Gross National Product – Depreciation

In order to understand the concept of net national product assume that a country XYZ has companies, citizens, entities, assets and collections of worth $ 1 trillion worth of the goods and worth of the services of the country is $3 trillion at that specific time. The assets that are used to produce those goods and used to provide these services to the end users are depreciated at an amount of $ 500 billion. Using the above mentioned formula the net national product of the country can be calculated as follows:-

Net National Product = 1 trillion + 3 trillion – 500 billion

Net National Product = $3.5 trillion

Why Net National Product is Important

Net National Product is the measurement of a country regarding its production and consumption. It is the measurement of the output of the country regardless of its production or input. In other words the net national product of a country describes the goods produced and consumed by a country. There are some other related measures to net national product that are net domestic product and gross domestic product.

Other Related Accounting Articles:

• Factor Income
• Net Investment
• Knowledge Economy
• Unit of Production Method
• Direct Material Usage Variance
• Net Worth
• Book Value Explained
• Written Down Value
• Book Value
• Depreciation: Straight Line Biases