Changes in inventories

10.110   Changes in inventories are measured by the value of the entries into inventories less the value of withdrawals and less the value of any recurrent losses of goods held in inventories during the accounting period.

10.111   Changes in inventories are defined to include changes in holdings of:

• goods for sale, whether of own production or purchased for resale;
• work-in-progress; and
• raw materials and stores to be used as intermediate inputs into production.

10.112    It should be noted that work-in-progress on cultivated biological resources is recorded for single use resources only, that is, plants, trees and livestock that produce an output once only (e.g. when the plants and trees are cut down or uprooted or the livestock slaughtered). For repeat yield resources (e.g. livestock producing milk, wool, etc. and fruit and nut trees), that are cultivated on own account or under an agreed contract with another enterprise, the growth is counted as fixed capital formation and is excluded from inventories. Any remaining cultivation of resources with repeat yields, such as nurseries and breeding of racehorses, is treated as work-in-progress.

10.113    Work which has commenced and is ongoing for structures, including dwellings, and on other forms of construction (e.g. roads, dams, ports) is excluded from inventories and included in GFCF. However, work on incomplete heavy machinery and equipment (e.g. shipbuilding) is included in changes in inventories. Land and financial assets are not regarded as inventories.