Corporate profits with inventory valuation and capital consumption adjustments

The net income, before taxes, from current production of entities that are treated as corporations in the NIPAs. For corporate businesses, it is defined as gross output less the following expenses: intermediate inputs, compensation of employees, taxes on production and imports (less subsidies), consumption of fixed capital, net interest and miscellaneous payments, and business current transfer payments. The estimates are based on receipts less expenses from corporate income tax returns,with adjustments to account for differences between federal tax law and NIPA concepts. Among these differences are the following: receipts exclude net capital gains and dividends received; expenses exclude bad debt, depletion, and state and local taxes on corporate income; inventory withdrawals are valued at current cost; and depreciation is on a consistent accounting basis and valued at current-replacementcost.