Catastrophic events are classified as disasters if either the associated property loss or the insurance payouts exceed 0.1 percent of GDP (in 2012, about $16 billion in current dollars). Losses of and non-repairable damages to the stock of fixed assets (structures, equipment and software) associated with a disaster are included in "other changes in volume of assets," which are a subtraction in the derivation of net stock. Disaster losses are not included in depreciation, as the depreciation schedules reflect normal accidental damage. These losses are not considered normal and therefore are not included in the consumption of fixed capital (CFC) as a charge against income earned from current production. Estimates for "other changes in volume of assets" are published annually in Fixed Assets Accounts (FAA) Tables 1.7 and 1.8. Additionally, estimates for disaster losses are published annually and quarterly as addenda items in NIPA table 5.1.
More information on the treatment of disasters is available in the March 2009 Survey article, “Preview of the 2009 Comprehensive Revision: Changes in Definitions and Presentations”.
For information on losses and insurance benefits resulting from Superstorm Sandy, please click here.
For information on the impact of natural or man-made disasters on the NIPAs, the regional economic accounts, or the international transactions accounts, see the following FAQs:
How are the measures of production and income in the national accounts affected by a natural or man-made disaster?
How do losses recovered from foreign insurance companies following natural or man-made disasters affect foreign transactions, the current account balance, and net lending or net borrowing?
What are the effects of Hurricanes Katrina and Rita on U.S. International Trade in Goods and Services and on the U.S. International Transactions Accounts?
How are the economic effects of natural or man-made disasters reflected in BEA’s regional income and product accounts?
1. Net stock equals previous period net stock plus investment minus depreciation and other changes in volume of assets. "Other changes in volume of assets" for the government sector consists of disaster and war losses.