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Survey Participant Information - Economic Activity Survey - AIC12MFGS 1 2 or 3
 

ECONOMIC ACTIVITY SURVEY - AIC12MFGS 1, 2 or 3

Income Items
Checklist


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?
Breakdown of the sales of goods produced (Q4)?
Attention Printing and Recording Businesses
Where to report income from various sources/activities?

What is the difference between Sales of goods produced and Sales of goods not produced?

Sales of goods produced
(Q3a) 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:

  • combining chemicals to manufacture paint;
  • using wood to manufacture furniture ;
  • selling waste or by-product (e.g. sawdust from timber processing);
  • retail bakery operation;
  • selling fabric woven by the business ;
  • brewing beer.

For Sales of goods produced to be reported in Q3a, the business must have owned the input to production (i.e. raw materials, components, parts used) and, therefore, the product for sale. If the goods were assembled or manufactured on a contract or commission basis (i.e. without ownership of the inputs), payment received should be included in Income from services (Q5). Further information can be found under What should be reported as income from services?

Sales of goods not produced (Q3b) 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, income from the sale in Australia of cars imported from a related overseas manufacturer would be included in sales of goods not produced.
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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 service has been provided on a commission basis - other than sales or agency commission - income from that source should be reported in Q5a. Otherwise, sales and agency commission income and non-commission income from the provision of any service should be reported in Other services (Q5b).

Where the business receives payment for manufacturing or assembly work performed on behalf of another business on a commission 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, as should income from activity incidental to production or sales, including:
  • delivery charges separately invoiced to customers;
  • packaging services;
  • freight forwarding;
  • installation;
  • repairs and maintenance service. (Please note that, if a business providing repairs and maintenance services, invoices customers for parts and service separately, income from both parts and service is included in Income from services (Q5).)

Other examples of Income from services include:
  • sales commission (report in Income from Other services [Q5b]);
  • payment received for reproduction of recorded media on behalf of another business;
  • laboratory testing services;
  • consulting fees;
  • franchising fees received.
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Breakdown of the sales of goods produced (Q4)

This question asks that the business report the income generated through sales of specified goods produced by the business or for it on commission. (Further information can be found under What is the difference between Sales of goods produced and Sales of goods not produced?)

Please note
If any of the listed goods were not produced by the business in the financial period, please leave the corresponding value blank.

If your business produced goods other than those printed on the form, please report:
  • the total sales income from all non-listed goods produced in box 9, Other goods produced;
  • for each of the 3 largest items of 'other goods', the nature of the goods produced and sold and amount of sales income.

Do not report in Q4:
  • sales of goods not produced (i.e. goods bought in and resold without processing);
  • income received from manufacturing on a commission, contract or fee-for service basis (i.e. where your business did not own the inputs to production and the goods sold);
  • income from services.
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ATTENTION PRINTING and RECORDING BUSINESSES

If your business derives income from:
  • printing or reproduction of printed material (e.g. digital printing, screen printing, photocopying service);
  • reproduction of recorded media (e.g. prerecorded CDs, DVDs); or
  • or printing support services (e.g. book repair or binding),
that income should be reported as Income from services (Q5). A breakdown of that income is also required in Q4, even though the question wording refers to income reported in Q3a. Further information can be found under Breakdown of the sales of goods produced (Q4)
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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.

Computer Software Sales: The treatment of income from computer software sales differs depending on the situation.
  • If the business sells non-customised software it has created, this income should be reported as Sales of goods produced (Q3a).
  • Where the business provides a customised software solution, income should be reported as Income from services (Q5).
  • Onselling software created by another business is reported as Sales of goods not produced (Q3b).

Discounts/Rebates received: Discount or rebates received by a business from its suppliers should not be reported as income.

Discounts/Rebates given: Discount or rebates given by a business to its customers should be netted off the income item to which the discount/rebate applied, e.g. Sales of goods (Q3) or Income from services (Q5).

Export sales (f.o.b): Where goods are produced or purchased in Australia for sale overseas, income from Sales of goods (Q3) 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) Please remember to estimate the percentage of Sales of goods produced (exported or intended for export) outside Australia, in Q3ai.

Food and beverages:
  • Food and beverages manufactured and sold to the consumer on the same premises (e.g. retail bakery) are considered Sales of goods produced (Q3a).
  • Food and beverages sold in original packaging, for example bottled water or confectionery, are considered Sales of goods not produced (Q3b).
  • If the food and beverages sold by the business are transformed through preparation and/or table service, sales should be reported as Income from services (Q5). This treatment covers restaurant food and drink sales, takeaway meals in containers, and catering services.

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 sales of goods (Q3) or income from services (Q5), depending on the nature of the contract.

Sponsorship Income: 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 Income from services (Q5), unlike donations, which are reported as Other income.

Asset sales: Do not report proceeds from the sale of assets.

Asset revaluation/impairment: should not be reported.
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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.

Financial information
  • Are all reported financial items reported in $'000s( thousands)? For example, if business income for the year were $123,456, it should be reported as 123.
  • Have sales and service income been reported net of GST?
  • Have you reported the percentage of Sales of goods produced (exported or intended for export) outside Australia, in Q3ai?
  • Have you provided a breakdown of sales of goods produced in Q4?
  • (Printing and recording businesses only) Have you reported a breakdown of income from printing, printing services and recorded media reproduction in Q4?
  • Have the nature and amount of the 3 main components of 'other services' items been reported in Q5b?

Other information
  • Have you answered 'yes' to the use of this online help facility (Q7)?
  • Have you provided an estimate of the time taken to complete this form (Q8)? (Please note that we use the time taken information to help us to design effective survey forms while minimising the burden on our respondents.)
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