Common use of Volume estimates Clause in Contracts

Volume estimates. 3.3.1. General volume policy The index type for the measurement of volumes is the Laspeyres index (the prices of the earlier period are applied to both periods). Quarterly chain-linked volume indices are derived by linking together quarter-to-quarter Laspeyres indices. It is the recommendation of ESA 2010 and Estonia agrees to use the Laspeyres formula when deriving chain-linked volume indices because of its several advantages. The benefits include consistency with supply and use tables Production-based accounts are calculated by the double deflation method: output and intermediate consumption are deflated separately, and value added at previous year’s prices is derived as the difference between output and intermediate consumption at previous year’s prices. Household final consumption expenditure (HFCE) is calculated at the fourth level of COICOP groups at purchaser’s prices including VAT. The same commodity detail is used for deflations by CPI. CPIs and PPIs are used to deflate the consumption of household production produced for own use. For the expenditures of resident households in the rest of the world, the weighted CPI for the main destination countries is used. For non-residents’ expenditures in the economic territory, the Estonian CPIs are used. For the estimation of the final consumption expenditure of the general government and the output of NPISH, output for own final use, sales and social transfers in kind are deflated separately. GFCF price indices differ neither by institutional sector nor by economic activity. Current price estimations for domestically produced machinery and equipment are deflated using the PPI of machinery and equipment; the deflator for import is used for equipment received from abroad. Construction estimates are deflated using the total construction cost price index. Changes in inventories are deflated by products at a detailed level for different types of inventories. Materials and supplies are deflated using the relevant PPIs, except for fuel for which the CPI is used. Work-in-progress and finished goods are deflated using the relevant PPIs. Goods for resale are deflated using the relevant CPIs. The exports and imports of goods are deflated by CPA groups using the relevant export or import indices. If there is no relevant export or import price index, the relevant PPI is used. The exports of services are deflated by CPA groups using the relevant CPIs. The imports of services are deflated by using the weighted average of CPIs and currency exchange rates of the most important trade partners according to the statistics of Eesti Pank (import of services by country).