13.18 An industry for a region consists of a group of local KAUs engaged in the same, or similar, kind-of-activity (see paragraph 2.108.). The local KAU is the unit on which the data related to production activities (output, intermediate consumption, etc.) are based.
13.19 As a general principle, aggregates on production activities should be allocated to the region where the unit carrying out the relevant transactions is resident. The residence of the local KAU is an essential criterion for the allocation of these aggregates to a particular region.
13.20 The general principle of allocating gross fixed capital formation by region is ownership just as in the accounts of the total economy {see paragraph 2.05., footnote (1)}. Fixed assets owned by a multiregional unit are allocated to the local KAUs where they are used. As in national accounts fixed assets obtained through operational leasing are recorded in the region of the owner and those obtained through financial leasing, in the region of the user.
13.21 In practice, it may be that information is only available at the level of units which contain several local KAUs engaged in different activities and/or regions. In this case, available indicators (e.g. compensation of employees or employment per region) have to be used to regionalise the figures by industry.
13.22 When defining a local KAU three situations can be distinguished:
labour input at a fixed location raises no problems. However, in some cases
further clarification is needed (see paragraphs 13.24 – 13.27);Ancillary activities may be carried out in separate locations, located in another region than the local KAUs they serve. The strict application of the above-mentioned rule for the geographical allocation of the ancillary activities would result in the underestimation of the aggregates in the regions where ancillary activities are concentrated. Therefore according to the principle of residence, they have to be allocated to the region where the ancillary activities are situated; they remain in the same industry as the local KAUs they serve.
13.24 For some industries, the methods for regionalisation need some further clarification. The industries are:
13.26 For transport industries including pipeline transport it is essential to define the local KAUs to which the production and capital formation should be attached. For land transport industries (excluding railways) the production and capital formation should be attached to depots or similar local KAUs where the equipment is based. For water transport industries the production and mobile equipment should be allocated to the home base of the unit. Pipeline networks should be attached to the local KAU that exploits it.
For rail and air transport industries top-down methods, breaking down the national aggregates into regions according to suitable indicators, should be used. Compensation of employees should be allocated to the region where the people are employed. The gross operating surplus should be allocated to the regions according to indicators relating to the activity of the train or air routes.
Regarding communication industries, telephone boxes, telephone sets, telecommunication lines, etc. perform only a supporting role. Therefore, they do not form distinct entities and should be attributed to the local KAU responsible for managing them. The investment in infrastructure should also be allocated to these local units.
13.27 For financial intermediation industries, value added should be allocated according to the income approach. Compensation of employees should be allocated to the local KAUs where the people are employed. Gross operating surplus of credit institutions should be distributed between local KAUs in proportion to the sum of loans and deposits, and gross operating surplus of insurance institutions in proportion to the premiums received. Gross fixed capital formation mainly consists of buildings; therefore, it should be allocated to the region where they are situated.
13.28 Output is to be valued at basic prices (see paragraph 3.47.). Products used for intermediate consumption are to be valued at purchasers' prices at the time they enter the process of production (see paragraph 3.72.). As a consequence gross value added per industry is valued at basic prices.
Gross fixed capital formation is valued at purchasers' prices including installation charges and other costs of ownership transfer. When produced on own-account it is valued at basic prices of similar fixed assets or at costs of production if such prices are not available (see paragraph 3.113.).
13.29 The regional equivalent of GDP is GDPR (gross domestic product per region). GDPR is valued at marked prices by adding the regionalised taxes less subsidies on products and imports to values added per region at basic prices. The sum of GDPR at market prices per region, including GDPR of the extraregio territory, equals GDP at market prices.