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Australian Bureau of Statistics
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Survey Participant Information - Economic Activity Survey - AIC12CAG |
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ECONOMIC ACTIVITY SURVEY - AIC12CAG
INCOME ITEMS What is the difference between Sales of goods produced and Sales of goods not produced? What should be reported as income from services? Where do I report my particular income activity? What is the difference between Sales of goods produced and Sales of goods not produced? Sales of goods produced (Q4a) occur when the business that sells a commodity is the same business which undertook production of the commodity, or had the commodity produced for it by a third party on a contract, sub-contract or commission basis. Examples include income from sales of:
Sales of goods not produced (Q4b) are those goods the business purchased ready-made, then resold without making changes to the goods. Wholesale and retail sales of goods should be reported here. For example, if a co-operative buys the produce of a number of growers and onsells it to a mill or to an exporter, the income from that sale would be included in Sales of goods not produced (Q4b). Information on Animal Sales can be found under Where do I report my particular income activity?. What should be reported as income from services? Generally, payment received for the provision of any services, regardless of whether they are a primary or secondary activity of the business, should be reported as Income from services (Q5). Where the business receives payment for agricultural work performed for another business on a commission, contract or fee basis only, (i.e. where the business does not own the inputs to production or the goods produced), such payment should be reported as Income from services (Q5). Agricultural services may include:
Other examples of Income from services include:
Rent, leasing and hiring income is conceptually a service income, but income from this source should be reported in Q6. Distinction: "Wet" and "dry" hire Some equipment, e.g. machinery or vehicles, may be hired either with or without operator/driver. This distinction, sometimes referred to as "wet" and "dry" hire, determines how this type of income should be reported.
Royalties income is also conceptually a service income, but income from this source should be reported in Q9. It includes payments received for the right to extract natural resources from land owned by the business and for the use of intellectual property owned by the business, e.g. patents and copyright. Where do I report my particular income activity? Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses. Animal sales: Reporting of the proceeds of animal sales varies, depending largely on the purpose for which the animal has been acquired.
Discounts/Rebates received: Discount or rebates received by a business from its suppliers should not be reported as income, but should be deducted from the expense item to which the discount or rebate applied (e.g. Purchases [Q17], Other operating expenses[Q22]). Asset sales: The proceeds from the sale of certain assets should be reported as Disposal of selected assets (Q30). The profit or loss from the sale of any assets should be reported in Other Income (Q10) as a positive or negative value. Asset revaluation/impairment: should be reported under Other income (Q10)as either a net gain or loss. Negative revaluations and impairments should not be reported as an expense. This follows the same principles that apply to other examples listed on the form, such as share trading or sales of assets. Export sales (f.o.b): Where goods are produced or purchased in Australia for sale overseas, income from Sales of goods (Q4) should represent the free-on-board (f.o.b.) price of the goods, i.e. a price which may cover the cost of transporting goods to the Australian customs frontier, (point of exit from Australia), only, and not the cost of transporting the goods outside Australia. (Note the exclusion of Export freight charges from the concept of Sales of goods) EXPENSE ITEMS How should I report Labour costs? How should I report Purchases? How should I report payments to contractors and other businesses for services? Where do I report my specific expense item? How should I report Labour costs? Payments made to an unrelated business for the supply of staff on a fee or contract basis, where the staff entitlements are paid by the business supplying the employees, should be recorded in Payments to employment agencies for staff (Q12e). Payment to another business for recruitment services (i.e. advertising vacancies, conducting interviews) on behalf of your business should also be included in Payments to employment agencies for staff (Q12e). However, any costs incurred by your business in the conduct of its own recruitment processes (e.g. payment directly to newspapers for running job vacancy advertisements) should be reported in Other operating expenses (Q22). Labour costs (Q12) exclude payments to contractors or sub-contractors operating under their own ABN. Information on payments to contractors can be found under How should I report payments to contractors and other businesses for services? Only include Employer contributions paid into superannuation in Q12a. This does not include personal superannuation contributions for business owners not drawing a wage. Payroll tax (Q12d) is levied by State/Territory governments on businesses with large payrolls (usually greater than $0.5 million in a year). It does not refer to income tax withholding for employees. Wages and salaries including provisions for employee entitlements (Q12f) - gross (i.e. before tax) wages and salaries should be reported. How should I report Purchases? If a commodity is purchased to be used or consumed in the production of goods or services, or for repairs and maintenance of equipment, its cost should be reported as Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17a). If the same commodity is purchased simply to be onsold in the same form (without transformation), its cost should be reported as Purchases of finished goods for resale (Q17b). For example:
The following examples illustrate what a business might be expected to report as Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17a):
In the context of selling finished goods, Purchases (expenses) are not the same as cost of goods sold. Purchases represent the amount actually expended by the business in the reporting period. Cost of goods sold, which is not collected in this form, represents the amount expended only on goods actually sold in the reporting period. (Cost of goods sold is equal to purchases plus opening inventories minus closing inventories). How should I report payments to contractors and other businesses for services? There is a specific question for Payments to contractors and other businesses for freight, cartage, delivery and transport services (Q18). Otherwise, all payments to other businesses for non-transport-related services provided should be reported in Other operating expenses (Q22). The following examples show how some commonly incurred expenses should be reported.
Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses: Animal purchases: Reporting the cost of acquiring animals varies, depending largely on the purpose for which the animal has been acquired.
Consumables: Consumables such as stationery, staff amenity supplies, cleaning materials etc. should be reported as Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17a). Discounts/Rebates given: Discounts or rebates given by your business to its customers should not be reported as an expense item, but should be netted off the income item to which the discount/rebate applied, e.g. Sales of goods (Q4) or Income from services (Q5). Land Purchases: Land purchases are to be reported under Capital expenditure including capitalised work done by own employees (land) (Q28i). Land is a non-current asset and purchases should therefore not be reported as an inventory. Sponsorship Payments: Sponsorship is not considered the same as a donation, as it involves a transaction, usually advertising or promotional benefits for the individual or business making the payment. It should therefore be reported as Other operating expenses (Q22), whereas donations are excluded altogether. Finance lease payments: When an asset (e.g. company car) is acquired under a finance lease arrangement, the value of the acquisition should be included in Capital expenditure including capitalised work done by own employees (Q28) in the year of acquisition. Repayments under a finance lease agreement consist of two components: interest and capital repayments. Capital repayments should not be reported in this form. The interest component only should be included in Interest expenses (Q14). Motor vehicle insurance premiums:
INVENTORIES How should I report inventories? Inventories (Q27) are divided into three sections; Raw materials, Work-in-progress and Finished goods. Raw materials (Q27a) consist of goods that a business holds with the intention of using to produce other goods or in rendering services. For example, the following might be included in opening and/or closing inventories of raw materials:
Work-in-progress (Q27b) consists of goods that still require work before being ready for sale. The value of work-in-progress inventories should be reported net of progress payments billed. (For further information, go to Inventories of livestock, crops, etc ) Finished goods (Q27c) consist of goods that are intended for sale in their current condition, including agricultural produce such as eggs, honey, hay and fruit. Inventories of livestock, crops, etc Animals or plants may be owned by a business for one of two basic purposes:
If the business owns animals or plants acquired for the purpose of being sold, their value as Inventories (stocks) should be reported as follows:
Animals or plants owned by the business for the purpose of continuous or repeat production of goods or services (e.g. fruit trees, working animals, breeding stock, milk or wool production) should NOT be included in Inventories, as these represent assets of the business. Inventories do not include depreciable assets such as land. CAPITAL EXPENDITURE AND DISPOSAL OF ASSETS How should I report capital expenditure? What is capitalised work done by own employees? How should I report capital expenditure? Capital expenditure refers to the amount spent by a business in the current reporting period on the acquisition of non-current assets (including animals and plants acquired for repeated or continuous production). It does not represent the value of asset holdings purchased prior to the current reporting period and does not include additions to inventories. It is reported under Capital expenditure including capitalised work done by own employees (Q28). If the business hires contractors to carry out capital work then these contractor payments should be included in the cost of the capital works. What is capitalised work done by own employees? Capitalised work done by own employees occurs when a business uses its own employees to add to the value of its assets by virtue of project work. For example: - employees carry out work to build a structure, such as an outbuilding or fencing - employees carry out work to develop an in-house software inventory control system In these cases, the cost of the project - both wages and salaries paid to employees and materials used for the capital work - may be capitalised, so that the cost can be amortised over more than one reporting period. If the project work relates to a non-current asset, it is included in the relevant section of the question Capital expenditure including capitalised work done by own employees (Q28). Capitalised work done by own employees should also be reported under the Capitalised wages and salaries (Q29a) and Purchases of materials for capital work (Q29b) questions. That is to say that capitalised work done by own employees (Q29) is a subset of Capital expenditure... (Q28) Capitalised wages and salaries and purchases of materials must relate to capital works. If they are wages and salaries or purchases relating to the daily operations of the business, they are reported as an expense item. CHECKLIST The purpose of this checklist is to assist you, if you wish, to check the information which you have supplied in the form before returning it to ABS. Use of the checklist may reduce the need for us to contact you with further enquiries. The points covered reflect some of the most common reporting errors. Employment (Q3)
Financial information
Other information
This page first published 10 August 2012
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