OTHER VOLUME CHANGES IN NON-FINANCIAL ASSETS N.E.C. (K.9)

6.25 Under other volume changes in non-financial assets (K.9) are recorded the effects of unexpected events on the economic benefits derivable from assets.

Included are:

1. unforeseen obsolescence. Consumption of fixed capital does not cover unforeseen obsolescence in fixed assets, and the amount included for their normally expected obsolescence may fall short of the actual obsolescence. Entries must, therefore, be made for the decline in the value of the fixed assets resulting from the introduction of improved technology;
2. differences between allowances included in consumption of fixed capital for normal damage and actual losses. Consumption of fixed capital does not cover unforeseen damage, and the amount included for their normally expected damage may fall short (or exceed) the actual damage. Adjustments must therefore be made for the unforeseen decline (or increase) in the value of the fixed assets due to these events;
3. degradation of fixed assets not accounted for in consumption of fixed capital: decline in the value of fixed assets from, for example, the unforeseen effects of acidity in air and rain on building surfaces or vehicle bodies;
4. abandonment of production facilities before completion or being brought into economic use;
5. exceptional losses in inventories (e.g. from fire damage, from robberies, from insect infestation of grain stores);
6. statistical discrepancies concerning non-financial assets between the closing balance sheet and the corresponding opening balance sheet.