budgets, will be briefly recalled in this chapter. Valuation of resources 125. The report of the group of experts in 1.974 (A/9770/Rev.l) noted that pricing practices vary from country to country, and that questions arise as 'co the extent to which prices for military goods and services füily reflect their real Worth either in the sense of military capability. or in the economic sense of opportunities foregone. Improved means for dealing with these questions would significantly enhance the value of an international system for standardized reporting of military expenditures, particularly in respect to potential agreements for their reductíon and limitation. 126, One approach for measuring economic Worth was considered viable by the group of experts in their report in 1976 (A/31/222/Rev.l), nsmely, use of an "adjusted factor cost" valuation. In this approach standard elements of price, to consist of average charges for factors of production, would be established to provide a consistent and feasible set of rules of valuation. Where actual costs in domestic currencies diverge from the standards, an adjustment of the expenditures woüld be called for. In part II of the instructions of the recommended reporting instrument (see sect. II D above), certain information is requested, which would facilitate an evaluation of opportunity costs for the use of conscripts. Stocks of military capital 127. The measurement of military capability is an important aím of standardized reporting. In this regard, it has been noted in previous reports of groups of experts that annual milítary expenditures represent only a part of a country's military potential, much of which results from past expenditures. However, the proposed matrix distinguishes investment-type expenditures by type of weapon, equipment or facility and by type of forte group. This information, if available for a series of years, is potentially usefül for measuring the quantities of 
**Analysis**
The text discusses the valuation of resources, specifically military goods and services, and the measurement of military capability. It also touches on the concept of opportunity costs and the use of standardized reporting to track military expenditures. These themes suggest that the text is related to national security, defense, and military affairs.

**Category**
Defense, International relations