Topic 1, Sub-Topic 1
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Remarks on Computed Value Method

Remarks on Computed Value Method

Computed value is the sum of the following elements:

(a) Production costs = value of materials + cost of fabrication

  • The cost or value of materials and fabrication or other processing employed in producing the imported goods.
  • Materials would include, for example, raw materials, such as lumber, steel, lead, clay textiles, etc; costs to get the raw materials to the place of production; sub-assemblies such as integrated circuit; and prefabricated components which will eventually be assembled.
  • Fabrication would include costs for labour, any costs for assembly when there is an assembly operation instead of manufacturing process; and indirect costs such as factory supervision; plant maintenance; overtime, etc.

(b) General expenses and Profits prepared in accordance with the Generally Accepted Accounting Principles (GAAPs)

(c) Costs of expenses under Article 8.2 (refer to pages 33 and 34 of this text)

Learning Activities

  • Activity 1-Review texts on Generally Accepted Accounting Principles 
  • Activity 2- Apply knowledge learned in activity 1 above to enumerate at least five major GAAPs used by businesses in the world today
  • Activity 3- Read legal texts on the Computed value and explain the instances where it may be suitable 


An importer M from country Y has imported brand new vehicles with a functionality not found in any other vehicles in the market in the country of importation. Therefore, Customs are unable to apply Article 1 to Article 5 to determine the Customs value. It has also been revealed that the transaction was not made at arm’s length. The producer of the vehicle was contacted and produced all the necessary documentation on the production costs and other expenses related to the motor vehicles being valued. The financial statements were prepared in accordance with GAAPs and audited by a reputable international Audit firm that also has an office in the country if importation. 

  • The statements revealed the following
    1. Invoice value provided was USD 10,000 per vehicle
    2. Costs of materials and fabrication per pair USD 6 
    3. General expenses and profits duly prepared in accordance the GAAPS is 5000 per unit.
    4. Freight and insurance amounted to USD 2000


  • You are required to calculate the Customs Value using the computed value method.