Measuring Capital - OECD Manual 2009
Second edition
Capital - in particular of the physical sort - plays several roles in economic life: it constitutes wealth and it it provides services in production processes. Capital is invested, disinvested and it depreciates and becomes obsolescent and there is a question how to measure all these dimensions of capital in industry and national accounts. This revised Capital Manual is a comprehensive guide to the approaches toward capital measurement. It gives statisticians, researchers and analysts practical advice while providing theoretical background and an overview of the relevant literature. The manual comes in three parts - a first part with a non-technical description with the main concepts and steps involved in measuring capital; a second part directed at implementation and a third part outlining theory and a more complete mathematical formulation of the measurement process.
Asset Retirement and the Gross Capital Stock
To this point, only a single asset has been considered. This is unrealistic because in practice, data exists only on classes and cohorts of assets. A class of assets brings together similar assets, for example in line with a product classification. A cohort of assets exists when many units of the same asset are invested during a particular accounting period. Even when identical assets are purchased at the same point in time, it is unlikely that they are all retired at the same moment.