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General Concepts and definitions in Economics Statistics and National Accounts

   

1

The establishment:
Project or part of project with constant site, performing one or more economic activity under one administration and has or could have regular accounts. Holder of project could be natural or artificial person.

 

2

 Legal entity:
It is the legal status of capital ownership of establishments aiming profit; it includes individual, joint-liability companies, partnership companies, limited liability companies and joint-stock companies.

 
 

a

 Individual establishment:
Establishment owned by one person (natural person), where no one has partnership in its holding.

b

Joint-liability company:
Company composed of two or more persons and registered with official contract (each partner is joint), i.e. guarantor to other partners jointly. Each of them is responsible absolute responsibility for company’s financial commitments within the limits of paid capital, as well as his personal properties.

c

Limited partnership company:
Company composed of two or more persons and registered with official contract. It includes two parties of partners: silent partners and acting partners. The company could be composed of one partner of each party. Silent partners are partners stated by name in company’s contract and they are responsible limited responsibility for financial commitments of the company within the limits of their share in capital, while responsibility of acting partners is not limited as silent partners in joint-liability companies.

d

 Limited joint-stock companies:
Company registered with official contract, and composed of party of silent partners and another party of acting partners, same as Partnership Company, however share of silent partners in capital is underwritten shares. Names of these shareholders are not mentioned in company’s contract and they are only questioned within the limits of shares value that they shared in.

e

Limited liability company:

 

The following conditions are required to establish such company:

-

Composed of two or more partners with official contract and number of partners should not be more than a number stated in concerned country laws and mentioned namely in company’s contract.

-

Company’s capital should not be less than a specific amount determined by concerned country laws.

-

Each partner is responsible for company’s obligations within the amount of his share in capital only.

-

The company is prohibited in general from practicing work of insurance, banking, saving, receiving deposits or investing funds for others.

-

The company is established for a specific period that should be stated in company’s articles of incorporation.

-

The company’s commercial name should be followed with the term “with limited liability (W.L.L.)”, i.e. type of such companies could be known from its address or commercial name.

f

Joint-stock company:
An approval from the supreme authorities in the state should be issued for such companies. It has two types of partners, founder and share holder, and its capital is composed of shares equal in value that are placed for underwriting and could be circulated later. The partners are not questioned for company’s financial obligation other than the value of shares they underwritten. The law should state that company’s capital should not be less than certain amount and its name usually followed by (

g

Special joint-stock company:
Its capital is composed of equal value shares not for underwriting and circulation. Underwriting is for limited number of persons, usually founders, and responsibility of shareholder does not exceed the limit of his shares in company’s capital.

h

Foreign establishment branch:
An establishment authorized by the state, which is considered as a branch of foreign establishment and usually bears the name of Mother Company. The mother company undertakes to pay all financial obligations of the branch in the state in case of occurrence of any financial obligations in accordance with legal entity of Mother Company.

i

Governmental:
An establishment owned directly by the state, whether it was related to state’s budget or has separate budget

 

3

Ownership of establishment:
It is meant the sector that the establishment belongs to regarding ownership.

 
 

a

 Government sector:
Government establishments usually practice governmental managerial or service activity (i.e. ministries and departments). These departments are non-market producers, i.e. produce goods and services that are supplied to individuals or other establishments for free or with nominal price without economic feasibility. These departments could supply its goods and services to other government departments.

b

Public sector (government establishments):
It includes establishments that practice productive activity of goods and services, where the government owns its capital completely. The government allows these establishments or companies large amount of power of disposal, not only in managing production, but in utilization funds also. These establishments or companies must be able to preserve its operating balances and commercial credit, and able to finance some or all capital formation from its savings, depreciation reserves or lending.

c

Joint sector (mixed):
The sector that includes establishments that the government contributes in its capital with another entity, whether this entity was national or foreign.

d

 Private sector:
It includes the establishments that are owned by one individual or group of individuals, whether they were citizens or non-citizens or whether they were natural or artificial persons. These establishments include as well establishments where citizens or non-citizens participate in its capital and include joint-stock companies where citizens or non-citizens own its capital … etc.

 

4

Main economic activity:

The activity practiced by the establishment that creates the largest share of total production value of the establishment or it is the activity specified by establishment’s owner or manager.

 

5

 Employment (employees):
All individuals (citizens or non-citizens) who are related with work relation to the establishment in exchange for wage that they receive at the end of payment period (daily, weekly or monthly) or without wage. Those persons could be full time or part time employees, males or females or permanent or temporary employees. This includes absent persons due sick leave, leave of absence, training courses or scholarships.

 
 

a

 Owners working in the establishment:
Holders or capital owners who actually work in the establishment.

b

Unpaid employees:
Owners, relatives or partners who work in the individual establishment or individual companies (Joint-liability, Limited partnership or Limited joint-stock) full or part time. Provided that it is not less than one third of time and do not receive regular wage for their work, and employees of establishment of trainees or experience seekers.

c

Paid employees:
Persons employed by the establishment for cash or in-king wage, whether they were permanent or temporary (part time employees). It includes persons absent from work for temporary reasons, such as leaves of absence or sick leaves.

d

Specialists:
Persons obtained university degrees or equivalent in their field of specialization.

e

 Technicians:
Persons who directly or indirectly assist the specialists in research, design, production and maintenance. The have craftsmanship and sufficient knowledge in theoretical information in their field of specialization that enable them to perform their job, comprehend the reasons why the job is done vocationally and purposes that work aim to. They usually bear qualifications in their field of specialization or have long experience in their field of work.

 

6

 Compensation of employees:

 
 

a

Wages, salaries and cash benefits:
Includes all cash payments due to employees as a compensation for their work before deducting their share in security and pension funds including taxes and the like. It also includes all cash payments that are paid on regular basis (weekly, monthly or other) including payments by piece and special allowances for overtime, night shifts, work in holidays or occasions, work far from their place of residence or in hazardous circumstances. It includes as well allowances paid regularly, such as housing or transport and wages paid for employees that are absent from work for short periods, such as feasts and temporary stoppage of production. It also includes incentives paid to employees in accordance with incentive regulation as well as commissions and bonuses received by establishment’s employees.

b

In-kind benefits:
Amount born by the establishment of goods and services that are presented free of charge or for nominal cost to its employees, i.e. meals including the ones consumed during business trips, housing services, lodging, uniforms, car services. It also includes other durable goods that are provided to employees for personal use and goods and services that are output of establishment’s production, i.e. free travel on board airlines, food products of the establishment, sports facilities, recreation facilities, vacations, transport means, car facilities, kindergartens for employees’ children, treatment, health and educational services for employees’ children, fees born by establishment on behalf of employees, i.e. residence fees, telephone installation and others.

 

7

Revenues of other activities:
All revenues received by the establishment for performing secondary economic activities other than the main economic activity, provided that this establishment is unable to separate requirements of production of secondary activities from the main activity.

 

8

Intermediate goods:
All goods that are used as input of production, excluding fixed assets, i.e. raw materials, packing and wrapping materials, fuel, oils, energy and electricity, water, spare parts, tools, equipment, stationary, publications and others.

 

9

 Intermediate services:
All services used that help in accomplishing production, such as maintenance expenses, transport services, general transportation, shipping, unloading, rent of equipment and transportation means and others.

 

10

 Value added:
Total value of production less total value of intermediate goods and services (intermediate input).

 

11

Depreciation:
Decrement (during accounting period) in value of fixed assets owned and used by producer as a result of participation in production operation, wear and tear resulting from ordinary accidents.

 

12

 Taxes on production and import (indirect taxes):
Compulsory cash or in-kind amounts paid by the establishment to the government. Taxes imposed on producers (for goods and services) regarding production, selling, purchasing or use of goods and services that are usually born on production cost and also includes customs fees.

 

13

 Subsidies:
Current payments at no cost presented by government entities, including nonresident government entities, to projects according to levels of its production activities or quantity and value of goods and services that it produces, sells or imports, they are yields for resident producers or importers. In case of resident producers, it could be designed to affect their level of production, prices of selling of their outputs or remuneration of establishment units that work in production field.

 

14

Operating surplus:
It equals to total product on the basis of product value less intermediate consumption (Intermediate goods and services) on the basis of purchaser cost, compensation of employees, fixed capital depreciation and net indirect taxes (indirect taxes less production subsidies).

 

15

 Fixed assets:
It is the durable produced assets that are themselves used repeatedly or continuously in process of production for a period more than one year. It includes land, mines reserve, forests and other similar tangible assets that could not be reproduced. It also includes facilities, machinery, equipment and agricultural and animal assets that could be used repeatedly or continuously, i.e. productive fruit trees and reproduction, fattening, milking and towing animals. It includes as well intangible assets such as computer programs and original artwork that are used in production.

 

16

 Fixed capital additions during the year:
It is represented in the value of amount spent during the year on fixed assets of machinery, equipment, buildings, land, means of transport, furniture and other similar tangible assets in order to be used in production of goods and services.

 

17

Stock:
Market value of stock of final and incomplete goods in a certain time. It includes as well products that are produced by the establishment, which still keep them before entering more alteration on them, sell them, supply them to other establishments or use them in other way. In addition to that it includes products possessed by the establishment in order to be used as intermediate consumption or re-sell them without further alteration.

 

18

Profit of shares:
Shape of property income matured for shareholders as a result of placing their money at disposal of companies.