Replacement Fund, part of the aggregate social product which replaces the means of production consumed in the process of creating material wealth. The remaining part of the aggregate social product forms the net product. To ensure the continuity of production, part of the aggregate social product has to be constantly converted into elements of new production, i. e. the formation of the replacement fund. This fund includes the means of labour that will replace worn out machines, plant, buildings, structures, etc., as well as the objects of labour—raw and basic materials, fuel and power necessary for the renewal of the production process. The replacement fund replenishes the material expenses of production and ensures its renewal and functioning on the former scale. In socialist society the replacement fund is formed in a planned way on the scale of all social production as a single national fund for the reproduction of the means of production. In the context of scientific and technical progress, the expended means of production are renewed and the production process is continued on a new technological basis, and the replacement fund usually turns out to be less than the total material expenses. Worn out and obsolete machines and plant are usually replaced by modern machinery ensuring higher labour productivity. Objects of labour are also changing radically, particularly with the development of chemistry. Today it is possible to obtain high-quality synthetic materials possessing better properties than the natural materials, and to produce substances with predetermined properties using less labour to make them. Revolutionary changes are taking place in the power industry. As a result of the use 310 of improved objects of labour and their rational application, fewer objects of labour are needed for replacement. That part of the replacement fund intended to cover the wear and tear of the means of production is formed in accordance with the rates of depreciation. The expended objects of labour are replaced from the resources of the intermediate product. The formation and use of the replacement fund in socialist society ensure the continuity of the reproduction process in satisfying social requirements and the comprehensive development of all members of society.