what is gross value added gva 
gross value added gva is an economic productivity metric that measures the contribution of a corporate subsidiary company or municipality to an economy producer sector or region gva provides a dollar value for the amount of goods and services that have been produced in a country minus the cost of all inputs and raw materials that are directly attributable to that production gva thus adjusts gross domestic product gdp by the impact of subsidies and taxes tariffs on products understanding gross value added gva gva is the output of the country less the intermediate consumption which is the difference between gross output and net output gva is important because it is used in the calculation of gdp a key indicator of the state of a nation s total economy it can also be used to see how much value is added or lost from a particular region state or province at the national level gva is sometimes favored as a measure of total economic output and growth over gdp or gross national product gnp gva is related to gdp through taxes on products and subsidies on products it adds back subsidies that governments grant to certain sectors of the economy and subtracts taxes imposed on others at the company level this metric is often calculated to represent the gva by a particular product service or corporate unit that the company currently produces or provides once the consumption of fixed capital and the effects of depreciation are subtracted the company knows how much net value a particular operation adds to its bottom line in other words the gva number reveals the contribution made by that particular product to the company s profit formula for gva gva gdp sp tp where sp subsidies on products tp taxes on products begin aligned text gva text gdp text sp text tp textbf where text sp text subsidies on products text tp text taxes on products end aligned gva gdp sp tpwhere sp subsidies on productstp taxes on products gross value added examplelet s consider a hypothetical example for the fictitious country investopedialand as a very simplified example of calculating gva consider the following data for our fictitious country using this data the gva can be calculated the first step is to calculate the gdp recall that gdp is computed as private consumption gross investment government investment government spending exports imports next we calculate the subsidies and taxes on products for simplicity s sake assume that all private consumption is consumption of products in that case subsidies and taxes are as follows with this the gva can be calculated as follows 