<p>Accounting definitions of revenue have their own <a href="https://www.firmofthefuture.com/accounting/timing-is-everything-with-asc-606-the-new-revenue-recognition-standard/" rel="nofollow noreferrer">rules about the timing of revenues</a> that may may have different timing assumptions than the economic concept of GDP does about when economic activity takes place. But this is probably at its most serious a second order concern. I agree with you that revenues should be an approximate upper bound on contribution of a firm to GDP. In practice, it is likely far less for several reasons:</p>
<ol>
<li>Inputs contribute to the cost of production but are not part of the output of a firm. For example, if you buy car parts and assemble them into cars, the costs of the cars will be reflected in your sales but it isn't your output.</li>
<li>In an internationally active firm, some firm output should sometimes be counted in the GDP of other countries. For example, if you make cars in the US and China, you are going to contribute to the GDP of both countries but your sales will reflect both countries' output.</li>
</ol>
<p>For a domestic firm, in a setting where GDP = GDI, we can think of the firm's contribution to GDP as the contribution to income. That turns out to be, simplifying a bit, Salaries + Interest on Debt + Profits (After Tax and Interest). That's going to be a deal less than revenues, because sales will also include the costs of other inputs.</p>

CC BY-SA 4.0
2023-08-04T20:20:10.180Z
2023-08-04T20:20:10.180Z
BKay
<p>Many articles or sources mention that Samsung's contribution to South Korea GDP is approximately 20%.
Checking its financial statements in 2022 for example, I see that the revenues amount to 234 billions of US dollars which only represents 13% of South Korea's GDP (1665 billions of US dollars according to the world bank). Since the value added must be less than revenues, the contribution to GDP should be less than 13%.
Am i missing something ?</p>
<p>Thank you</p>

<gdp>
Samsung's contribution to South Korea's GDP
RT1959
# Samsung's contribution to South Korea's GDP

(Asked by: username_0 on 2023-08-04)

Many articles or sources mention that Samsung's contribution to South Korea GDP is approximately 20%.
Checking its financial statements in 2022 for example, I see that the revenues amount to 234 billions of US dollars which only represents 13% of South Korea's GDP (1665 billions of US dollars according to the world bank). Since the value added must be less than revenues, the contribution to GDP should be less than 13%.
Am i missing something ?

Thank you

**Tags:** gdp

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## 1 answers

### Answer by username_1 on 2023-08-04. Score: 1 | Accepted answer

Accounting definitions of revenue have their own [rules about the timing of revenues](https://www.firmofthefuture.com/accounting/timing-is-everything-with-asc-606-the-new-revenue-recognition-standard/) that may may have different timing assumptions than the economic concept of GDP does about when economic activity takes place. But this is probably at its most serious a second order concern. I agree with you that revenues should be an approximate upper bound on contribution of a firm to GDP. In practice, it is likely far less for several reasons:

1. Inputs contribute to the cost of production but are not part of the output of a firm. For example, if you buy car parts and assemble them into cars, the costs of the cars will be reflected in your sales but it isn't your output.
2. In an internationally active firm, some firm output should sometimes be counted in the GDP of other countries. For example, if you make cars in the US and China, you are going to contribute to the GDP of both countries but your sales will reflect both countries' output.

For a domestic firm, in a setting where GDP = GDI, we can think of the firm's contribution to GDP as the contribution to income. That turns out to be, simplifying a bit, Salaries + Interest on Debt + Profits (After Tax and Interest). That's going to be a deal less than revenues, because sales will also include the costs of other inputs.


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