International income accounting, double counting occurs when

Double counting occurs in international income accounting when intermediate goods are counted with the final goods. Intermediate goods are products that are used as inputs in the production of other goods, while final goods are products that are sold to the end consumer. When calculating a country's gross domestic product (GDP), only the value of final goods and services should be included, as the value of intermediate goods has already been accounted for in the production of the final goods. If intermediate goods are counted with the final goods, then their value is being counted twice, which will lead to an overestimation of the country's GDP. For example, if a car manufacturer buys tires from another company to use in the production of their cars, the value of the tires is already included in the price of the final cars. If the value of the tires is also included in the GDP calculation, it would be double-counted. Therefore, to avoid double counting, only the value of final goods and services should be included in the calculation of a country's GDP.