Gross operating surplus
Encyclopedia
In the national accounts, gross operating surplus (GOS) is the portion of income derived from production by incorporated
enterprises that is earned by the capital factor. It is calculated as a balancing item in the generation of income account of the national accounts.
It differs from profits
shown in company accounts for several reasons. Only a subset of total costs are subtracted from gross output to calculate the GOS. Essentially GOS is gross output less the cost of intermediate good
s and services (to give gross value added
), and less compensation of employees
. It is gross because it makes no allowance for depreciation of capital.
A similar concept for unincorporated enterprises (e.g. small family businesses like farms and retail shops or self-employed taxi drivers, lawyers and health professionals) is gross mixed income. Since in most such cases it is difficult to distinguish between income from labour and income from capital, the balancing item in the generation of income account is "mixed" by including both, the remuneration of the capital and labour (of the family members and self-employed) used in production.
Gross operating surplus and gross mixed income are used to calculate GDP
using the income method.
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
enterprises that is earned by the capital factor. It is calculated as a balancing item in the generation of income account of the national accounts.
It differs from profits
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
shown in company accounts for several reasons. Only a subset of total costs are subtracted from gross output to calculate the GOS. Essentially GOS is gross output less the cost of intermediate good
Intermediate good
Intermediate goods or producer goods are goods used as inputs in the production of other goods, such as partly finished goods. Also, they are goods used in production of final goods. A firm may make then use intermediate goods, or make then sell, or buy then use them...
s and services (to give gross value added
Gross value added
Gross Value Added ' is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy...
), and less compensation of employees
Compensation of employees
Compensation of employees is a statistical term used in national accounts, balance of payments statistics and sometimes in corporate accounts as well...
. It is gross because it makes no allowance for depreciation of capital.
A similar concept for unincorporated enterprises (e.g. small family businesses like farms and retail shops or self-employed taxi drivers, lawyers and health professionals) is gross mixed income. Since in most such cases it is difficult to distinguish between income from labour and income from capital, the balancing item in the generation of income account is "mixed" by including both, the remuneration of the capital and labour (of the family members and self-employed) used in production.
Gross operating surplus and gross mixed income are used to calculate GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
using the income method.
Data
External links
- Google - public data: GDP and Personal Income of the U.S. (annual): Gross Operating Surplus