Value added at basic prices is calculated from the production value plus subsidies on products less the purchases of goods and services (other than those purchased for resale in the same condition) plus or minus the change in stocks of raw materials and consumables less other taxes on products which are linked to turnover but not deductible. It represents the value added by the various factor inputs in the operating activities of the unit concerned.

Income and expenditure classified as financial or extra-ordinary in company accounts is excluded from value added.

Value added at basic prices is calculated "gross" because value adjustments (such as depreciation) are not subtracted.