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8126.0 - Information and Communication Technology, Australia, 2006-07 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 07/10/2008   
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GLOSSARY

Bad and doubtful debts

Refers to the amount of accounts receivable that are either written off, or estimated to be uncollectible during an accounting period, that are expensed in an accounting period's profit calculations.

Capital expenditure

Refers to costs capitalised in a business' books for land, buildings, plant, machinery and equipment, intangible assets and all other costs capitalised. Included are the value of capitalised work done by the business' own employees and progress payments made to contractors for capital work done.

Computer system design and related services industry grouping

Refers to businesses classified to the following class of the Australian and New Zealand Standard Industrial Classification (ANZSIC) for output purposes (see Explanatory Notes 27 to 29):

  • 7000, Computer system design and related services.

Depreciation and amortisation

These refer to financial charges made in the accounts to reflect that part of the value of an asset which may be regarded as having been used up in producing revenue in a particular accounting period.

Earnings before interest, tax, depreciation and amortisation

Profit prior to the deduction of net interest (interest income minus interest expenses), income tax, depreciation and amortisation. Items classifiable to other income are also excluded.

Electronic and precision equipment repair and maintenance industry grouping

Refers to businesses classified to the following class of the ANZSIC for output purposes (see Explanatory Notes 27 to 29):
  • 9422, Electronic (except domestic appliance) and precision equipment repair and maintenance.

Employer contributions into superannuation

Refers to all employer contributions into superannuation including salary sacrifice.

Employment

Includes full-time and part-time employees, employees absent on paid or prepaid leave, managerial and executive employees, permanent, temporary and casual employees and working proprietors and partners. Non-salaried directors, persons paid by commission only and self-employed persons such as consultants and contractors are excluded.

Fringe benefits tax

Fringe benefits tax is paid by employers when certain benefits in excess of normal wages or salaries (e.g. free or discounted goods) are received by their employees in connection with their employment.

Information and Communication Technology (ICT)

Information and Communication Technology refers to the technologies and services that enable information to be accessed, stored, processed, transformed, manipulated and disseminated, including the transmission or communication of voice, image and/or data over a variety of transmission media.

ICT Goods

Information and Communication Technology goods broadly cover:
  • computer and communications hardware and their parts, components and consumables;
  • other electronic hardware that can be networked (e.g. digital multifunctional photocopiers, cash registers, automatic teller machines, etc.); and
  • packaged and customised software.

Excluded from ICT goods in the Australian definition are equipment in which the presence of microprocessors is predominantly used for the control of a process or the setting of functions (e.g. robots, scientific and health equipment).

ICT income

Consists of all income from the sale, distribution and provision of ICT goods and services.

ICT industry grouping

Refers to the Division, Subdivision, Group or Class of the ANZSIC that selected ICT activity falls within. ICT industry groupings include:
  • Manufacturing;
  • Wholesale trade;
  • Information media and telecommunications;
  • Computer system design and related services; and
  • Electronic and precision equipment repair and maintenance.

Income from repair and maintenance services

Refers to the income from the repair and maintenance of equipment. Repair activities are divided broadly into:
  • ICT repair and maintenance services: Repair and maintenance of computer, communications hardware and other electronic hardware that can be networked (e.g. digital multifunctional photocopiers, cash registers, automatic teller machines, etc.); and
  • Non-ICT repair and maintenance: Repair of all equipment that is not considered ICT.

Industry value added (IVA)

Industry value added for market producers is an estimate of the difference between the value of the output for an industry and the purchases of materials and selected expenses incurred in the production of that output.

It is derived as:
      Income derived from the sales of goods and services
      plus Operational funding from government
      plus Any changes in levels of trading stock inventories
      less Purchases of materials, components and services used in the production of goods for sale.
      less Expenses related to the sale of goods and administrative expenses (excluding indirect taxes such as payroll tax, fringe benefits tax, land tax and land rates)
      plus Own account capital work
      less Capitalised purchases of materials
      equals IVA

Information media and telecommunications industry grouping

Refers to businesses classified to the following classes of the ANZSIC for output purposes (see Explanatory Notes 27 to 29):
  • 5420, Software publishing;
  • 5801, Wired telecommunications network operation;
  • 5802, Other telecommunications network operation;
  • 5809, Other telecommunications services;
  • 5910, Internet service providers and web search portals;
  • 5921, Data processing and web hosting services; and
  • 5922, Electronic information storage services.

Insurance premiums

Refers to expenses incurred by a business in respect of different types of insurance policies. Excluded are workers' compensation and compulsory third party motor vehicle insurance premiums.

Labour costs

Included are wages and salaries, employer contributions into superannuation, workers' compensation premiums/costs, fringe benefits tax and payroll tax.

Manufacturing industry grouping

Refers to businesses classified to the following classes of the ANZSIC for output purposes (see Explanatory Notes 27 to 29):
  • 2421, Computer and electronic office equipment manufacturing;
  • 2422, Communication equipment manufacturing; and
  • 2429, Other electronic equipment manufacturing.

Operating expenses

Refers to the sum of all expense items excluding extraordinary items and capital expenditure.

Operating profit before tax (OPBT)

A measure of profit (or loss) before extraordinary items are brought to account and prior to the deduction of income tax and appropriation to owners. It is derived as:
      Total Income
      plus Closing Inventories
      less Total expenses
      less Opening inventories
      equals OPBT

Operating profit margin

Refers to the average proportion contributed by sales of goods and services to the profit of businesses. It is derived as:
      Operating profit before tax
      divided by revenue from sales of goods and services
      times 100
      equals Operating profit margin

Other income

Refers to all income items not separately itemised, such as dividend income, funding from federal, state and local government and net profit (loss) on foreign exchange rates, sale of non-current assets and share trading. Extraordinary items are excluded.

Other operating expenses

Refers to all expense items not separately itemised, such as printing and postal charges, motor vehicle running expenses, rent, leasing and hiring, advertising and bank charges. Extraordinary items are excluded.

Payments to contractors and consultants for computing and telecommunication services

Refers to payments to other businesses and self-employed persons for computing and telecommunication services work done or sales made on a contract or commission basis.

Payroll tax

Refers to a tax levied by state and territory governments upon the amount of wages and salaries paid by a business.

Total income

Refers to the sum of all income items excluding extraordinary items.

Wages and salaries

Refers to wages and salaries and selected provisions for employee entitlements. Included are, severance, termination and redundancy payments, bonuses and payments for annual and other types of leave, salaries and fees of directors and retainers and commissions of persons who received a retainer. Payments related to salary sacrifice are excluded.

Wholesale trade industry grouping

Refers to businesses classified to the following classes of the ANZSIC for output purposes (see Explanatory Notes 27 to 29):
  • 3492, Computer and computer peripheral wholesaling;
  • 3493, Telecommunication goods wholesaling; and
  • 3494, Other electrical and electronic goods wholesaling.

Workers' compensation premiums/costs

Refers to the compulsory insurance cover to be taken out by all employers, except for self-insured workers, according to legislative schemes to cover employees suffering injury or disease in the course of, or arising out of, employment.


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