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Survey Participant Information - Economic Activity Survey - Agriculture
 

ECONOMIC ACTIVITY SURVEY - AGRICULTURE


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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 in June 2013. 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 2013 even if this is not the last pay period in your financial reporting year.

Working proprietors and partners (Q3a)
If you are the owner-operator or partner of an unincorporated business, include yourself (and other partners) in Q3a (working proprietors and partners). Owners/directors of Pty Ltd companies should not be counted as working proprietors, but should be included in Q3b (Salaried directors) or Q3c (Other employees).

Other employees (Q3c)
This is a headcount of all persons who worked for the business and were paid through the payroll in the last pay period in June 2013.

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/workforce, should be included in Other employees (Q3c) only if they were paid through the payroll in the last pay period of June 2013 and PAYG tax was deducted for them.
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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:
  • fruit and/or vegetables grown by the business;
  • animals raised for meat, skin, wool or fur;
  • grain crops raised by the business;
  • raw milk from cattle owned by the business;
  • turf grown by the business;
  • plants raised from seed in a nursery.

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?.
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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 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:
  • agistment;
  • crop dusting;
  • farm management;
  • irrigation services;
  • shearing;
  • the work of a self-employed farm hand.

Other examples of Income from services include:
  • delivery charges separately invoiced to customers;
  • sales commission;
  • 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].)

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.
  • Where the business derives income from hiring out equipment without operator ("dry" hire), that income should be reported as Rent, leasing and hiring income (Q6).
  • Where the business derives income from hiring out equipment with operator ("wet" hire), the income should be reported as Income from services (Q5).

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.

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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.
  • If an animal was purchased for long-term use (e.g. as breeding stock, milking stock or as a working animal), it is considered to be an asset of the business, in the same sense as plant or equipment used to assist in the production of goods for sale. Therefore, if that animal is subsequently sold, the profit (capital gain) or loss on that sale should be reported as a positive or negative value in Other income (Q10).
  • If an animal was purchased with a view to raising it until it can be sold in a different condition, or if the progeny of breeding stock is raised until it can be sold as a more mature animal, the amount received from the sale of the animal should be included in Sales of goods produced (Q4a).
  • If an animal was purchased with a view to immediate onselling, income from that source should be included in Sales of goods not produced (Q4b).

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 in the survey, 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)


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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 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.

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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:
  • where a business buys fertiliser to assist in the growing of a commercial crop, the cost of the fertiliser should be included in Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17a); but
  • where a business buys fertiliser and supplies it to growers (without processing it), the cost of the fertiliser should be included in Purchases of finished goods for resale (Q17b).

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):
  1. electricity to power plant and machinery;
  2. fuel for transport and farm vehicles;
  3. plants and seeds for cultivation;
  4. fodder for livestock;
  5. parts for repairs and maintenance of vehicles, plant or machinery.
Information on Animal Purchases can be found under Where do I report my specific expense item?

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 survey, 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.
  1. Postage costs - include in Outward freight, cartage, delivery and transport expenses (Q18a).
  2. Payments made to owner-drivers to transport goods sold by your business to customers - include in Outward freight, cartage, delivery and transport expenses (Q18a).
  3. Payment made to a courier for pick-up of goods and delivery to your place of business - include in Other freight, cartage, delivery and transport expenses (Q18b).
  4. Payment of separately invoiced delivery charges to a supplier of goods - include in Other freight, cartage, delivery and transport expenses (Q18b)
  5. Payments for veterinary services - report as Other operating expenses (Q22).
  6. Payment to self-employed farm hand for labour - report as Other operating expenses (Q22).
  7. Payment to another business for agistment services - report as Other operating expenses (Q22).
  8. Payment to another business for repairs and maintenance to vehicles, machinery, plant or equipment - include in Other operating expenses (Q22).

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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:

Animal purchases: Reporting the cost of acquiring animals varies, depending largely on the purpose for which the animal has been acquired.
  1. If an animal was purchased for long-term use (e.g. as breeding stock, milking stock or as a working animal), it is considered to be an asset of the business, in the same sense as plant or equipment used to assist in the production of goods for sale. Therefore, the amount paid to acquire an animal as an asset of the business should be included in Capital expenditure including capitalised work done by own employees (other plant and equipment) (Q28h).
  2. The purchase price of livestock to be matured before being sold should be included in Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17a).
  3. If an animal was purchased with a view to immediate onselling, the purchase price of that animal should be included in Purchases of finished goods for resale (Q17b).

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).

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 survey. The interest component only should be included in Interest expenses (Q14).

Motor vehicle insurance premiums:
  • Optional third party insurance premiums, payable at the discretion of the business, should be included in Insurance premiums (Q13).
  • Compulsory third party insurance premiums, payable as part of the vehicle registration process should be included in Other operating expenses (Q22).
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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:
  • feed for livestock owned by the business
  • grain and seed for sowing
  • fertilisers
  • fuels

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:
  1. for repeated production of goods or services, e.g. fruit trees, working animals, breeding stock, milk or wool production; or
  2. to be sold

If the business owns animals or plants acquired for the purpose of being sold, their value as Inventories (stocks) should be reported as follows:
  • livestock being matured, plants and crops under cultivation (i.e. requiring more work before they are ready for sale) should be reported as Work-in-progress less progress payments billed (Q27b);
  • livestock, harvested plants and crops ready for sale in their current condition (i.e. not requiring further work) should be reported as Finished goods (including inventories for resale) (Q27c).

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 of the business.
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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 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.

The following are examples of how some common types of acquisitions should be reported under Capital expenditure including capitalised work done by own employees (Q29). (The value reported should be the purchase price of the asset acquired.)

1. (Registered) cars, trucks and motorcycles - in Road Vehicles (Q29a).
2. Aeroplanes and boats - in Other transport vehicles and equipment: (Q29b).
3. Tractors, threshers, refrigeration equipment and pumps - in Industrial machinery and equipment (Q29c).
4. Audio visual equipment, electric lighting, transformers and generators - in Electronic equipment and electrical machinery (Q29f).
5. Sheds, fencing, breeding stock and working animals - in Other plant and equipment (Q29h).
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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. 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.
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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 survey 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 2013? (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 (Q3d) equal the sum of Working proprietors and partners (Q3a), Salaried directors (Q3b) and Other employees (Q3c)?
  • Working proprietors and partners (Q3a) should only be reported for an unincorporated business, not if the business is incorporated (e.g. Pty Ltd).
  • If the business had offices/locations with staff in more than one state or territory, does the total for Australia (Q32) equal both the sum of components and Total number of persons in Q3(d)?

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.
  • Do total income (Q11) and total expenses (Q23) 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 'other...' items been provided in Q10, Q22, Q28h?
  • If income from sales of goods produced by the business has been reported, have purchases been reported correctly, i.e. as Purchases of materials, components, containers and packaging materials, electricity, fuels and water (Q17a)?
  • If income from sales of goods not produced by the business has been reported, have purchases been reported correctly, i.e. as Purchases of finished goods for resale (Q17b)?
  • Have the values of both opening and closing inventories (Q27) been reported, where applicable?
  • Have livestock and plants been reported in the appropriate inventory type - Work-in-progress less progress payments billed (Q27b) or Finished goods (including inventories for resale) (Q27c)?
  • If capitalised work done by own employees (Q29c) is reported, the value must be less than or equal to the sum of Capital expenditure items reported in Q28.

Other information
  • Have you provided an estimate of the time taken to complete this survey? (Please note that we use the time taken information to help us to design effective surveys while minimising the burden on our providers.)
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