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Survey Participant Information - Economic Activity Survey - AIC12CCL
 

ECONOMIC ACTIVITY SURVEY - AIC12CCL

Employment
Income Items
Expense Items
Inventories
Capital Expenditure and Disposal of Assets
Checklist


EMPLOYMENT

How should I report employment?


Employment
is a headcount of all persons who worked for the business as proprietors, partners, salaried directors or other employees in the last pay period of June 2012. It excludes casual or seasonal employees who are on the payroll, but did not work during this pay period. You should report for the last pay period in June 2012 even if this is not the last pay period in your financial reporting year.

Working proprietors and partners (Q3, first column)
If you are the owner-operator or partner of an unincorporated business, include yourself (and other partners) in the working proprietors and partners column. Owners/directors of Pty Ltd companies should not be counted as working proprietors, but should be included in the second column, Employees (including salaried directors if this is an incorporated business).

Employees (Q3, second column)
This is a headcount of all persons who worked for the business AND were paid through the payroll in the last pay period of June 2012.

What about persons working for the business under contract?

  • Contractors and subcontractors who are other businesses (i.e. have their own ABN and are paid on a fee for service or commission only basis) should not be counted in Employment.
  • If the business paid another business for contract staff, and those persons were on the payroll of the other business, they should not be counted in Employment.
  • Persons employed on a fixed-term contract, e.g temporary staff, should be included in Employees (column 2) only if they were paid through the payroll in the last pay period of June 2012 and PAYG tax was deducted for them.

Persons working by their role in the business (e.g. managers, professionals, technicians, etc)

In Q3 (a to f), please ensure that no person is counted more than once. If a person performed multiple roles during the last pay period in June 2012 (e.g. builder and administrative work), that person should be counted once according to the role in which the person worked most of his/her hours.
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INCOME ITEMS

What are questions 4 and 5 about?
What is the difference between Sales of goods produced and Sales of goods not produced?
Where to report income from various sources/activities?

What are questions 4 and 5 about?

Please note that Q4 contains a number of different terms. These are defined on page 4 of the form: Explanations of the terms used in Part 3. It is very important to read the Explanations, to the extent to which it applies to your business, so that your responses contribute meaningfully to Construction Industry analysis. The purpose of Q4 and Q5 are explained below:

About Q4 - ...breakdown of income from trade services, building and construction...
What businesses report in response to this question enables ABS to draw conclusions about the following.
  1. Income received by businesses as head contractors or construction projects managers, as opposed to that earned in the capacity of building subcontractors. (The sum of the 2 Income items, [Subcontracting] and [Contracting...as head contractor/project manager] should represent the total income received by the business from the provision of trade, building and construction services.)
  2. What sort of building and construction projects (e.g. houses, heavy industry) are generating contract and subcontract income for businesses providing trade, building and construction services. To avoid the burden of extracting from business accounts monetary values for the different types of work itemised in parts (a) to (j) of this question, we have asked businesses to provide estimated percentage breakdowns.

About Q5 - ...value of work done for...
This question provides further analysis of Contracting (head contractor/project manager) income only. Part (a) of the question informs us as to which sector of the economy (household sector, public sector or private and not-for-profit sectors) are driving the demand for building and construction services. Part (b) indicates in which industries public sector and private/not-for-profit sectors are undertaking construction projects.
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What is the difference between Sales of goods produced and Sales of goods not produced?

Sales of goods produced (Q6a) 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 of activity generating income from sales of goods produced include:
  • manufacturing;
  • agricultural crop raising;
  • sale of building or demolition waste or by-product, e.g. used bricks, soil, owned by the business;
  • property sales where the business builds (or has built for it) dwellings or other constructions on land which it owns


Sales of goods not produced (Q6b) are those goods which 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, income from the sale of parts or tools purchased ready-made.
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Where to report income from various sources/activities

Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses.

Buying and selling land: This covers the situation in which the business acquires real estate (vacant land or land with existing structures) for the purpose of developing it for resale.
  • Any payment made for the acquisition of the real estate in the financial period 2011-12 should be reported as Purchases of finished goods for resale (Q23c).
  • Payment received from the sale of developed property should be reported as Sales of goods produced (Q6).

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 [Q23], Other operating expenses[Q28]).

Government construction projects: If the business was contracted to undertake construction work for Federal, State and/or Local Government, contracting income received from government(s) should be included in Q4.

Asset sales: The proceeds from the sale of certain assets should be reported in 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.

Progress payments billed on long term contracts: Where a business has entered into a long term contract to supply goods or services, and recognises expenses and progress payments in its accounts, the progress payments should be reported as income from services (in Q4, if trade, construction or building services; in Q7, if non-construction services), or as sales of goods (Q6), depending on the nature of the contract.

Rent, leasing and hiring income: This concept requires a distinction to be made between income derived from hire (of equipment, for example), with operator ("wet" hire) and hire without operator ("dry" hire).
  • Where the business derives income from hiring out equipment without operator ("dry" hire), that income should be reported as Rent, leasing and hiring income (Q8);
  • Where the business derives income from hiring out equipment with operator ("wet" hire), the income should be reported as Income from (trade, etc) services (Q4) or Income from non-construction services (Q7), depending on the nature and use of the equipment.
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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 Labour Costs question part (e) Payments to employment agencies for staff (Q14e). 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 (Q14e). 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 (Q28).

Only include Employer contributions paid into superannuation in Q14a. This does not include personal superannuation contributions for business owners not drawing a wage.

Payroll tax
(Q14d) is levied by State/Territory governments on businesses with large payrolls (usually greater than $0.5 million). It does not refer to income tax withholding for employees.

Wages and salaries including provisions for employee entitlements (Q14f) - gross (i.e. before tax) wages and salaries should be reported.
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How should I report Purchases?

Purchases of materials specifically for construction, trade and building such as cement, bricks, etc. should be reported in Purchases of construction, trade and building materials (Q23a).

Purchases of any other materials for use or consumption in the production of goods or services, or for repairs and maintenance of equipment should be included in Purchases of other materials, components, containers, packaging materials, electricity, fuels and water (Q23b). Examples of what should be reported in Q23b include:
  • petroleum and diesel fuel purchased for use in own vehicles and equipment;
  • payments for water consumption;
  • electricity bills for powering office, plant, etc;
  • office supplies/consumables;
  • parts used for repairs and maintenance.

Any payment made for the acquisition of the real estate in the financial period 2011-12 should be reported as Purchases of finished goods for resale (Q23c).
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How should I report payments to contractors and other businesses for services?

There are 3 specific questions relating to payments to contractors and other businesses for services.
  1. Payments to building subcontractors or to other businesses for construction work (e.g. plumbers, carpenters, contracted builder's labourers) should be included in Payments to other businesses for trade services, building and construction, (Q15).
  2. Payments to businesses such as architects, surveyors for construction-related services, as well as fees paid to real estate agents or for building licences and approvals, should all be reported in Other construction related fees and services (Q16).
  3. Payments made to other businesses for the movement of goods and materials should be reported in Payments to contractors and other businesses for freight, cartage, delivery and transport services (Q24).
Otherwise, all payments to other businesses for services not related to construction or transport work should be reported in Other operating expenses (Q28).

The following examples show how some commonly incurred expenses should be reported.
  • Payment to (sub)contractor for site clearing - include in Payments to other businesses for trade services, building and construction (Q15).
  • Payment to another business for building-site security - include in Other construction related fees and services (Q16).
  • Postage costs - include in Outward freight, cartage, delivery and transport expenses (Q24a).
  • Payment made to a courier for pick-up of goods and delivery to your office - include in Other freight, cartage, delivery and transport expenses (Q24b).
  • Payment to a supplier of separately invoiced delivery charges - include in Purchases (Q23) (i.e. the supplier's delivery fee is taken to be part of the cost of buying the goods).
  • Payment for conveyancing services - include in Other operating expenses (Q28).

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Where do I report my specific expense item?

Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses.

Consumables: Consumables such as stationery, staff amenity supplies, cleaning materials etc. should be reported as Purchases of other materials, components, containers, packaging materials, electricity, fuels and water...

Discounts/Rebates Given: Discounts or rebates given by the 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 applies (e.g. income from trade services or sales of goods).

Equipment hire: Reporting of this type of expense depends on whether the hire is "wet" or "dry" (i.e. with or without operator). A simple illustration of the distinction is:
  • if the business has paid for the hire of earthmoving equipment to be operated by its own employees ("dry hire"),the expense should be included in Rent, leasing and hiring expenses (Q18a); but
  • if the business has paid another business for contracted earthmoving services, i.e. equipment with operator ("wet hire"), the expense should be included in Payments to other businesses for trade services, building and construction work (Q15).

Finance lease payments: When an asset (e.g. utility vehicle) 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 (Q34) 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 (Q20).

Motor vehicle insurance premiums:
  • Compulsory third party insurance premiums, payable as part of the vehicle registration process should be included in Other operating expenses (Q28).
  • Optional third party insurance premiums, payable at the discretion of the business, should be included in Insurance premiums (Q19).

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INVENTORIES

How should I report inventories?


Inventories (Q33) are divided into three sections; Raw materials, Work-in-progress and Finished goods.

Raw materials
(Q33a) consist of goods that a business holds with the intention of being used to produce other goods or in rendering services. For example, timber (for construction).

Work-in-progress
(Q33b) consists of goods that still require work to reach the condition they are to be sold in, such as partially assembled machinery. The value of work-in-progress inventories should be reported net of progress payments billed.

Finished goods
(Q3c) consist of goods that are to be sold in their current condition, including goods for resale.
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CAPITAL EXPENDITURE AND DISPOSAL OF ASSETS

How should I report capital expenditure?
What is capitalised work done by own employees?
How should I report (Total) disposal of assets?


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 (land, buildings etc). 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 (Q34).

If the business hires contractors to carry out capital work then these contractor payments should be included in the cost of the capital works.
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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. Examples include:
  • employees carry out work to build a structure, such as an outbuilding
  • employees carry out work to develop an in-house software 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 (Q34). This information should also be reported under the Capitalised wages and salaries (Q35b) and/or Capitalised purchases of materials (Q35b).
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How should I report (Total) disposal of assets?

When an asset is sold, the sale value should be included in Disposal of selected assets (Q36). Any profit or loss from the sale of assets should be reported as a positive or negative value in Other income (Q12).

Note: The sale of property purchased for development should be reported in Sale of Goods
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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)
  • Are the reported numbers a headcount of persons working for the business? (Should not be FTE.)
  • Have you reported only those who worked for the business in the last pay period ending in June 2012? (i.e. Regardless of your reporting period; not including casual/seasonal employees who did not work during that pay period.)
  • Does Total number of persons (Q3g) equal the sum of Working proprietors and partners and Employees by main role (Q3a-f)?
  • Working proprietors and partners (Q3a) should only be reported for an unincorporated business, not if the business is incorporated (e.g. Pty Ltd).
  • Regardless of the number of different roles performed by any single proprietor, partner or employee, that person is only counted once.
  • If the business had offices/locations with staff in more than one state or territory, does the total for Australia (Q38) equal both the sum of components and Total number of persons in Q3(g)?

Financial information
  • Are all reported financial items reported in $'000s (thousands)? For example, total income of $123,456 should be reported as 123.
  • In Q4, does the sum of subcontracting and contracting income represent all trade, building and construction service income received by the business in the financial period?
  • In Q4, do the percentage estimates of the subcontracting income by type of work and contracting income by type of work each sum (down, not across) to 100%?
  • In Q5a, does the sum of income contracting work for (i) Householders (ii) Governments and (iii) Other businesses equal contracting income reported in Q4?
  • In Q5b, do the percentages of contract income from Governments and Other businesses by industry sum to 100%
  • Do total income (Q13) and total expenses (Q29) equal the sum of their components?
  • Have sales and purchases been reported net of GST?
  • Have the nature and amount of the main components of items been provided in Q7, Q12, Q28 and Q34h?
  • Have the values of both opening and closing inventories both been reported in Q33, where applicable?
  • If capitalised work done by own employees is reported in Q35c, the value must be less than or equal to the sum of Capital expenditure items reported in Q34.
  • If the business had offices/locations with staff in more than one state or territory, do the totals for Australia (Q38) equal both the sum of components and the amounts specified at the foot of each column?

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