Data presented in this publication have been compiled from the standard financial accounts of businesses; therefore, the definition of each reported item aligns closely with that adopted in standard business accounting practice. Definitions of particular terms, as used in this publication, are also included. Terms for employment at end of June and derivative items are not included, but will be included with the later release of these data.
ABN unit
The statistical unit used to represent businesses, and for which statistics are reported, in most cases. The ABN unit is the business unit which has registered for an ABN, and thus appears on the ATO administered Australian Business Register. In most cases, the ABN unit represents the legal entity. This unit is suitable for ABS statistical needs when the business is simple in structure. For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the statistical unit used is the type of activity unit (TAU).
Assets
The reported total book value of assets (tangible and intangible) as at the end of the reporting period. Comprises current assets (such as inventories and trade debtors) and non-current assets (such as property, plant and machinery needed for normal operations, capitalised interest, patents, licences and goodwill).
Averages for...
The relevant item divided by the number of operating businesses.
Bad and doubtful debts
Represents the amount of bad and doubtful debts written-off, net of bad and doubtful debts previously written-off but recovered.
Billion
One thousand million.
Bridging data
Data produced taking into account the quantification of differences in the scope of (usually) consecutive survey population characteristics, thus enabling serial analysis of selected data items. See Appendix 1 for details.
Business
Represents the ABN unit or type of activity unit (TAU), which are the two standard units for each of the 2001-02 and 2002-03 EAS collections. For details, see Explanatory Notes paragraphs 5-10.
Business Activity Statement (BAS) total sales
Represented by the form item G1 Total sales on businesses' Business Activity Statements, supplied by them to the ATO. This item comprises all payments and other consideration (including GST) received during the nominated tax period for supplies made in the course of business.
Business profitability
Business profitability refers to the proportion of businesses that made a profit, loss, or broke even. Broke even is defined as those businesses incurring a profit or loss of less than $500, including zero.
Business size
For the purposes of table 2.1, businesses are categorised as:
- employing businesses, which are shown in three groups:
- large businesses, with employment of 200 or more persons
- medium businesses, with employment of 20 to less than 200 persons
- small businesses, with employment of less than 20 persons
- non-employing businesses.
Employing businesses are identified on the survey frame based on registrations to the ATO's pay-as-you-go withholding (PAYGW) tax scheme. The frame is updated each year to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. Businesses which have ceased employing are identified when the ATO cancels their PAYGW registration. In addition, businesses which did not remit under the PAYGW scheme for five quarters prior to the end of the reference period are treated as non-employing.
Capital expenditure
Total (gross) expenditure on acquiring fixed tangible and intangible assets, before deduction of trade-in allowances, and including expenses (except capitalised interest) incurred during the year in acquiring such assets. Fixed tangible assets include land, dwellings, other buildings and structures, plant, machinery and equipment (including motor vehicles). Intangible assets include capitalised exploration expenditure, patents, licences and goodwill.
Capitalised purchases
Goods drawn from inventories for use as fixed tangible assets in capital work done by own employees for own use or for rental or lease.
Capital work done for own use
Capitalised work done by the employees or proprietors of a business in manufacturing, constructing, installing or repairing assets, in mineral and petroleum exploration activities, and the in-house development of computer software, for use by the business or for rental or lease. This work is valued at the capitalised costs of the materials and the wages and salaries involved.
Capitalised wages and salaries
Capitalised payments for work done by own employees in manufacturing, constructing or installing assets, mineral and petroleum exploration activities or in developing computer software in-house for use by the business or for rental or lease. In this publication, the value of capitalised wages and salaries is included (as footnoted) in wages and salaries, but excluded from the labour costs expense item in table 2.2.
Change in inventories
The value of total closing inventories less total opening inventories.
Closing inventories
The value of all inventories of finished goods (including inventories for resale), work-in-progress less progress payments billed, raw materials, fuels, containers, etc. at the end of the reporting period.
Contract, subcontract and commission expenses
Payments to other businesses and self-employed persons for work done or sales made on a contract or commission basis. Payments to persons paid by commission without a retainer are also included. Excludes commissions paid to persons who receive a retainer and commissions paid to the business' own employees.
Cost of sales
The sum of purchases, selected expenses and opening inventories less closing inventories. Any capitalised purchases or capitalised wages and salaries are excluded.
Current assets
The value of closing trading inventories (i.e. at the end of the reporting period) plus the value of other current assets such as cash, short-term deposits, prepayments and short-term loans to employees.
Current liabilities
The book value of current liabilities at the end of the reporting period. This includes provisions for taxation, leave, claims, trade creditors and other accounts payable, and bank overdrafts.
Current prices
Prices expressed at the prices prevailing during the particular reference period.
Current ratio
The number of times current assets exceed current liabilities, i.e. current assets / current liabilities.
Depreciation and amortisation
Depreciation/amortisation allowed on buildings and other fixed tangible assets. Includes, for lessees only, depreciation/amortisation in respect of finance leases.
EASTAX data
Australian industry series published in this publication for 2000-01 and earlier years which comprised a combination of ABS management unit data and BIT data supplied by businesses (including non-employing businesses) to the ATO. This term is used to identify the source of these data, to caution users of consequent differences from similar series in annual industry-specific publications (which contained data sourced only from management units).
Due to the introduction of a new statistical infrastructure and changes to the ABSBR from mid-2002, data in the industry-specific publications for 2001-02 and later years are now sourced on a similar basis (and, therefore, include ATO BIT data).
Employer contributions into superannuation
Includes salary sacrifice. Also includes all employer contributions to superannuation funds (including the employer productivity contribution) and provisions for employer contributions to superannuation funds. Employee contributions are excluded.
Employing business
See the entry for business size.
Enterprise
The enterprise is an institutional unit comprising:
- a single legal entity or business entity; or
- more than one legal entity or business entity within the same enterprise group and in the same institutional sub-sector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia (SISCA) sub-sector).
Enterprise group
A unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts and partnerships. Majority ownership is not required for control to be exercised.
Expenses
See total expenses.
Freight and cartage expenses
Excludes the cost of delivery by own vehicles and employees, as well as overseas freight and cartage on goods exported.
Funding from government for operational costs
Funding from federal, state and/or local government for operational costs (e.g. wages and salaries, rent, food). Includes bounties, subsidies, export grants, apprenticeship and traineeship schemes, and amounts reimbursed under the Australian Government's Diesel Fuel Rebate Scheme.
Funding from government for specific capital items
As reported by providers.
Gross fixed capital formation (GFCF)
Gross fixed capital formation is measured by the total value of a producer's acquisitions, less disposals, of fixed assets during the reference period, plus certain additions to the value of non-produced assets realised by the productive activity of institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year.
The derivation of GFCF is as follows:
Acquisition of
 | Road vehicles |
| plus | Other transport vehicles
Industrial machinery and equipment
Computer software capitalised
Computers and computer peripherals
Electronic equipment and electrical machinery |
| Communications equipment |
| Other plant and equipment |
| Dwellings, other buildings and structures |
| Computer software expensed |
| Mining exploration expenditure expensed
Mining exploration expenditure written-off |
| less | Disposal of plant, machinery and equipment (including motor vehicles)
Disposal of dwellings, other buildings and structures |
| equals | GFCF |
Income
See the entries for sales and service income, interest income, and other selected income.
Income from services
See the entry for sales and service income.
Industry class
Within ANZSIC, there is a structure comprising four levels ranging from industry division (broadest level) to the industry class (finest level). At the industry class level, the activities are narrowly defined and recognised by a four-digit code, e.g. Industry Class 2331 for PULP, PAPER AND PAPERBOARD MANUFACTURING. Usually, an activity is primarily confined to one class. However, some activities may be primary to more than one class.
Industry division
Within ANZSIC, there is a structure comprising four levels ranging from industry division (broadest level) to the industry class (finest level). The main purpose of the industry division level is to provide a limited number of categories which give a broad overall picture of the economy. There are 17 divisions within ANZSIC each identified by an alphabetical letter, that is, 'A' for AGRICULTURE, FORESTRY AND FISHING, 'B' for MINING, 'C' for MANUFACTURING, etc.
Industry group
This is the intermediate level within an industry division of ANZSIC and is recognised by a three-digit code, e.g. Industry Group 233 for PAPER AND PAPER PRODUCT MANUFACTURING. It gives more detail than the industry subdivision and is created in a way that groups like industry classes together.
Industry subdivision
This is the broadest level category within an industry division of ANZSIC and is recognised by a two-digit code, e.g. Industry Subdivision 23 for WOOD AND PAPER PRODUCT MANUFACTURING. Industry subdivisions are built up from industry groups which, in turn, are built up from industry classes.
Industry value added (IVA)
IVA represents the value added by an industry to the intermediate inputs used by the industry. IVA is the measure of the contribution by businesses, in the selected industry, to gross domestic product.
The derivation of IVA is as follows:
| Sales and service income |
| plus | Funding from federal, state and/or local government |
| for operational costs |
| plus | Capital work done for own use |
| plus | Closing inventories |
| less | Opening inventories |
| less | Intermediate input expenses
(for details, see the entry for total expenses) |
| less | Capitalised purchases |
| equals | IVA |
However, it should be noted that IVA is not a measure of operating profit before tax (OPBT). Wage and salary expenses and most other labour costs are not taken into account in its calculation and nor are most insurance premiums, interest expenses or depreciation and a number of lesser expenses (see the entry for total expenses for further details).
Insurance premiums
Premiums for fire, general, accident, public liability, optional third-party and comprehensive motor vehicle insurance, and professional indemnity insurance. Excludes workers' compensation insurance premiums/costs (included in labour costs) and compulsory third party motor vehicle insurance premiums (included in motor vehicle running expenses).
Interest coverage
The number of times that businesses can meet their interest expenses from their earnings before interest and tax, i.e. earnings before interest and tax / interest expenses.
Interest expenses
Includes interest paid on loans from banks, related or unrelated businesses, partners, insurance companies, and in respect of finance leases. Also includes interest equivalents such as hedging costs and expenses associated with discounted bills. Excludes bank charges other than interest, and capital repayments.
Interest income
Includes interest from loans and advances made to related and unrelated businesses, on finance leases, from deposits in banks and non-bank financial institutions, and earnings from discounted bills. Excludes capital repayments received.
Intermediate input expenses
See the entry for total expenses.
Intermediate inputs
Intermediate inputs consist of materials and certain services which are used up in the production process.
The calculation is:
| Intermediate input expenses
(for details, see the entry for total expenses) |
| plus | Opening inventories |
less
equals | Closing inventories
Intermediate inputs |
Inventories - opening/closing
The value of all inventories of finished goods (including inventories for resale), work-in-progress less progress payments billed, raw materials, fuels, containers, etc. at the beginning and end of the reporting period, respectively.
Investment rate value added
The proportion of industry value added (IVA) used to acquire capital, i.e. ( capital expenditure / IVA ) x 100.
Labour costs
Comprises wages and salaries (excluding any capitalised component), employer contributions into superannuation, and workers' compensation premiums/costs. Provisions for employee entitlements are also included. For details, see these Glossary terms.
Large business
See the entry for business size.
Liabilities
The reported total book value of liabilities as at the end of the reporting period. Comprises current liabilities (such as trade creditors and provisions for employee entitlements) and non-current liabilities (such as provisions for employee entitlements, bank loans, debentures and unsecured notes). Provisions for employee entitlements include annual leave, leave bonuses, long service leave, and severance, termination and redundancy payments, but exclude fringe benefits and payroll tax, employer contributions to superannuation funds, and workers' compensation costs.
Long term debt to equity
The number of times non-current liabilities exceeds owners' equity, i.e. non-current liabilities / net worth.
Management unit
For collections prior to 2001-02, the management unit was the highest-level accounting unit within a business, having regard to industry homogeneity, for which accounts were maintained. In nearly all cases, it coincided with the legal entity owning the business (i.e. company, partnership, trust, sole operator, etc.).
Medium business
See the entry for business size.
Motor vehicle running expenses
Includes expenditure on registration fees, compulsory third-party insurance premiums, fuel and repair and maintenance expenses. Excludes expenses for off-road motor vehicles (e.g. fork lifts, mobile plant), and lease payments, optional third party and comprehensive motor vehicle insurance premiums, and depreciation.
Natural resource royalties expenses
Includes payments under mineral lease arrangements, and resource rent taxes and royalties. Excludes payments for royalties from intellectual property (e.g. patents, copyrights, etc.), which are included under other operating expenses. Gold tax payments are also excluded.
Net worth
Total assets less total liabilities, and is equal to the interest of shareholders or other owners in the assets of the business. Also called 'owner’s equity'.
Non-current assets
The book value of non-current assets at the end of the reporting period. This includes plant and machinery needed for normal operations, capitalised interest, property and goodwill.
Non-current liabilities
The book value of non-current liabilities at the end of the reporting period. This includes provisions for employee entitlements, bank loans, debentures and unsecured notes.
Non-employing business
See the entry for business size.
Opening inventories
The value of all inventories of finished goods (including inventories for resale), work-in-progress less progress payments billed, raw materials, fuels, containers, etc. at the beginning of the reporting period.
Operating business
Any ABN unit / TAU which is still in existence at the end of the reference period.
Operating profit before tax (OPBT)
Profit before extraordinary items are brought to account and prior to the deduction of income tax and appropriations to owners (e.g. dividends paid), i.e. total income - total expenses + change in inventories.
Other operating expenses
See the entry for total expenses.
Other selected income
Includes natural resource royalties income, dividend income and other income such as net profit (or loss) on the sale of fixed tangible assets, net profit (or loss) resulting from variations in foreign exchange rates/transactions, and funding from federal, state and/or local government for both operational costs and specific capital items. It excludes extraordinary profits or losses, i.e. those not associated with the normal operations of the business and of a non-recurring nature.
Owners' equity
See the entry for net worth.
Payroll tax
Excludes pay-as-you-go withholding tax.
Profit margin
The percentage of total income available as operating profit before tax (OPBT), i.e. ( OPBT / total income ) x 100.
Proration
See Technical Note 2 paragraph 5.
Reference period
For each collection year, businesses are asked to report data for the financial year ended 30 June. However, if a business has a different financial year, it is asked to report (apart from employment) for the 12 month period which ends between 1 October of the previous year and 30 September of the current year. This period is then used as a substitute for the financial year ended 30 June. For example, for the 2002-03 collection, a business may have reported data for the year ended 31 December 2002.
Rent, leasing and hiring expenses
Operating lease payments for land, dwellings, other buildings and structures, motor vehicles, plant, machinery and other equipment. Finance lease payments are excluded.
Rent, leasing and hiring income
See the entry for sales and service income.
Repair and maintenance expenses
Includes computer software and hardware maintenance, and repair and maintenance of off-road motor vehicles. Excludes wages and salaries of own employees and the repair and maintenance costs of on-road motor vehicles.
Return on assets
Operating profit before tax as a percentage of the total book value of assets, i.e. ( operating profit before tax / assets ) x 100.
Return on net worth
Operating profit before tax as a percentage of net worth, i.e. ( operating profit before tax / net worth ) x 100.
Sales and service income
Includes:
Sales of goods
- whether or not produced by the business (including goods produced for the business on a commission basis). Includes export sales, sales or transfers to related businesses or to overseas branches of the business, progress payments relating to long term contracts if they are billed in the period, delivery charges not separately invoiced to customers, sales of goods produced by the business from crude materials purchased, and income from 'specific' rates (e.g., water, sewerage, irrigation and drainage rates). Excludes excise and duties received on behalf of the Government (e.g. the coal export levy and petroleum production excise duty), sales of fixed tangible assets, natural resource royalties income, interest income, and delivery charges separately invoiced to customers. Exports are valued free on board (f.o.b.) (i.e. export freight charges are excluded).
Income from services
- includes income from consulting services, repair, maintenance and service income and fees, contract, subcontract and commission income, management fees/charges from related and unrelated businesses, installation charges, delivery charges separately invoiced to customers and royalties from intellectual property (e.g. patents, copyrights, etc.). Excludes natural resource royalties income, interest income, and delivery charges not separately invoiced to customers. Under current international standards, rent, leasing and hiring income (except from finance leases) is also classified as service income, but is published separately in table 2.2.
Rent, leasing and hiring income
- derived from the ownership of land, dwellings, buildings and other structures, motor vehicles, plant, machinery and other equipment. Royalties from intellectual property are also included. Excludes royalties from mineral leases, income from finance leases and payments received under hire purchase arrangements.
These are valued net of discounts given and exclusive of goods and services tax (GST). Extraordinary items are also excluded.
Sales of goods
See the entry for sales and service income.
Selected industries
SELECTED INDUSTRIES comprises data for all ANZSIC divisions, excluding ANZSIC Divisions K FINANCE AND INSURANCE and M GOVERNMENT ADMINISTRATION AND DEFENCE. For a detailed discussion on the scope of the estimates, see Explanatory Notes paragraphs 12 and 13.
Small business
See the entry for business size.
Standard Institutional Sector Classification of Australia (SISCA)
The SISCA is the central classification among ABS Standard Economic Sector Classifications. It is based on the System of National Accounts 1993 (SNA93) institutional sector classification, and includes the sectors: non-financial corporations, financial corporations, general government, households, non-profit institutions serving households, and rest of the world (which includes only non-resident units, these being excluded from all other sectors). For more information, users should refer to Standard Economic Sector Classifications of Australia (SESCA) (cat. no. 1218.0).
Statistical infrastructure
See Explanatory Notes paragraphs 5-10.
Stream
For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABS Business Register (ABSBR) contribute via one of three categories (or 'streams') in accordance with significance and collection-related characteristics. For definitions of STREAMS D, B and T, see Technical Note 1 paragraphs 5-11.
Superannuation
See the entry for employer contributions into superannuation.
Total...
For most total items, see the particular Glossary entry; e.g. for total assets, see assets.
Total expenses
For the purposes of calculating economic and accounting variables, operating expenses incurred by businesses are divided into several categories. However, some expenses are excluded entirely from all such calculations: excluded are extraordinary expenses, capitalised expenses, income tax and other direct taxes, goods and services tax (GST) and excise payable to governments, capital repayments or losses on asset sales, dividends, donations or foreign exchange losses.
Those expenses used for calculations are categorised as follows:
Intermediate input expenses
This category covers the major expenses incurred by businesses in producing and distributing goods and services (except labour costs), and comprises two sub-categories of operating expenses:
Purchases of goods, materials and services used in production, which include:
- purchases of materials, components, containers and packaging materials, electricity, fuels and water
- purchases of goods (including electricity, gas and water for distribution) for resale (without any further processing or assembly)
- motor vehicle running expenses
- freight and cartage expenses
- repair and maintenance expenses
- rent, leasing and hiring expenses (excluding finance lease payments)
- contract, subcontract and commission expenses.
Expenses related to the sale of goods and administrative expenses, which include:
- management fees/charges paid to related and unrelated businesses
- bank charges other than interest
- audit and other accounting expenses
- legal fees
- advertising expenses
- postal and telecommunication expenses
- office supplies and printing expenses
- travelling, accommodation and entertainment expenses
- staff training
- payments for royalties from intellectual property (e.g. patents, copyrights, etc.).
Excluded from intermediate input expenses are selected labour costs and other operating expenses as detailed below.
Selected labour costs
- wages and salaries (including provisions for employee entitlements)
- employer contributions into superannuation including salary sacrifice
- workers' compensation premiums/costs.
Other operating expenses
Some expenses are excluded from the calculation of intermediate input expenses and selected labour costs, but are included in the calculation of the accounting variable operating profit before tax (OPBT).
These expense items are included in table 2.2 as:
- individually listed items:
- depreciation and amortisation
- interest expenses
- items included in cost of sales:
- computer software expenses not capitalised by businesses
- land tax and land rates
- mineral/petroleum exploration expenses not capitalised by businesses
- other expenses not capitalised by businesses
- payroll tax and fringe benefits tax
- other items, included in table 2.2 as other operating expenses:
- insurance premiums (except workers' compensation and compulsory third party motor vehicle insurance premiums)
- natural resource royalties expenses
- bad and doubtful debts.
Total income
Comprises sales and service income, interest income and other selected income (for details, see the entries for these items).
Type of activity unit (TAU)
The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an enterprise group that can report production and employment data for similar economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision.
In most cases, TAUs concorded with the management units used prior to the 2001-02 year.
Wages and salaries
The gross wages and salaries (including capitalised wages and salaries) of all employees of the business. The item includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and annual and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included. Payments related to salary sacrifice and payments to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer are excluded. The drawings of working proprietors and partners are also excluded. (Note that wages and salaries excluding any capitalised component is a component of labour costs; for details, see that entry.)
Workers' compensation premiums/costs
As reported by providers.
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