Net national income is defined as gross domestic product plus net receipts of wages, salaries and property income from abroad, minus the depreciation of fixed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence.
{\displaystyle \mathrm {NNI} =\mathrm {C} +\mathrm {I} +\mathrm {G} +\mathrm {NX} +\left[{{\text{Net Foreign}} \atop {\text{Factor Income}}}\right]-\left[{{\text{Indirect}} \atop {\text{Taxes}}}\right]-\left[{{\text{Manufactured Capital}} \atop {\text{Depreciation}}}\right]}
This formula uses the expenditure method of national income accounting.
When net national income is adjusted for natural resource depletion, it is called Adjusted Net National Income, expressed as
NNI* does not take critical natural capital into account.
Examples are air, water, land, etc.
For reference, capital (K) is divided into four categories: