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Survey Participant Information - Economic Activity Survey - Retail and Wholesale
 

ECONOMIC ACTIVITY SURVEY - RETAIL AND WHOLESALE


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Employment
Income Items
Expense Items
Inventories
Capital Expenditure and Disposal of Assets
Multi-state operations
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 2014. 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 2014 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). Non salaried directors are excluded and should not be counted in Employment.

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 2014 excluding salaried directors for incorporated businesses or working proprietors and partners for unincorporated businesses.

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 Other employees (Q3c) only if they were paid through the payroll in the last pay period of June 2014 and Pay As You Go (PAYG) tax was deducted for them.
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INCOME ITEMS

What are Sales of goods bought in and resold (Q4a)?
What are Sales of goods produced (or produced for it on commission)(Q4b)?
What should be reported as income from services?
Where to report income from various sources/activities?

It should be noted that both sales of goods and services which are considered exports need to be reported at this section (Q4 and 5) however freight charges and excise duties associated with these should be excluded.


What are Sales of goods bought in and resold?

Sales of goods bought in and resold
(Q4a) 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. Sales of goods should be reported net of discounts and/or rebates given to customers. Examples include:
  • Distribution or retailing of imported goods manufactured overseas, (e.g. the sale in Australia of cars imported from a related overseas manufacturer)
  • Sales of bulk grain
  • Bottle shop sales of alcohol
  • Fuel for resale

What are sales of goods produced?

Sales of goods produced (Q4b) 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:
  • Bakery operation that manufactures baked goods on the premises
  • Combining chemicals to manufacture paint
  • Using wood to manufacture furniture
  • Selling flowers or other crops grown by the business
  • Assembling parts
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What should be reported as income from services?

Generally, payment received for the provision of any services, regardless of whether or not they are a manufactured by this business regardless of whether they are primary or secondary activity of the business, should be reported as Income from services (Q5). These should include:
  • Commission income received from the sales of goods on behalf of clients
  • Commission income from sales of EPAY products (e.g. phonecards, gift cards, lotto tickets etc.)
  • Other contract, sub-contract and commission income
  • Repair and service income and fees


Income from activity incidental to production or sales, such as the following, should also be included in Income from services:
  • Delivery charges separately invoiced to customers, delivery charges (including shipping and handling) not separately invoiced or itemised to customers should be included in Sales of goods (Q4).
  • Management fees/charges from related and unrelated businesses/organisations
  • Income from installation charges
  • Income from consulting services
  • Subscription and membership fees
  • Sponsorship income
  • Management fees/charges from related and unrelated businesses
  • Advertising income


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.

Rent, leasing and hiring income is conceptually a service income, but income from this source should be reported in Q6 (Rent, leasing and hiring income).
Distinction: "Wet" and "dry" hire
Some equipment, e.g. machinery, equipment 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 (Royalties income). It includes payments received for the use of intellectual property owned by the business, (e.g. patents and copyright), and payments received for the right to extract natural resources.

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 (Q4b).
  • 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 bought in and resold by this business/organisation (Q4a).

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]).

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)

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 (Q4b).
  • Food and beverages sold in original packaging, for example bottled water or confectionery, are considered Sales of goods bought in and resold (Q4a).
  • If the food sold by the business is transformed through preparation and/or table service, sales should be reported as Income from services (Q5). This treatment covers restaurant food sales, takeaway meals in containers, and catering services.
  • If liquor and other beverages are sold for consumption on premises (i.e. bar, cafe or restaurant sales), then these sales should be reported as Income from services (Q5). If they have been sold for consumption off premises (e.g. bottle shop sales), then these sales should be reported as Sales of goods bought in and resold (Q4b).

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 (Q4) or Income from services (Q5), depending on the nature of the contract.

Asset sales: The profit or loss from the sale of 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.




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EXPENSE ITEMS

How should I report Labour costs?
How should I report Purchases?
How should I report expenditure on electricity, fuels and water?
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 (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) do not include 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 for the year). It does not refer to income tax withholding for employees.

Wages and salaries including provisions for employee entitlements (Q12f). Report gross (i.e. before tax) wages and salaries. Capitalised wages and salaries (i.e. wages and salaries for work relating to the creation of capital assets) should not be included at Q12f but instead at Capitalised wages and salaries and purchase of materials for capital work (Q30a)
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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 (including office consumables), or for repairs and maintenance of equipment, its cost should be reported as Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17b).

If the same commodity is purchased simply to be on-sold in the same form (without transformation), its cost should be reported as Purchases of finished goods for resale (Q17a). For example:
  • where a business buys packaging materials for its use, the cost of the packaging materials should be included in Purchases of materials, components, containers, packaging materials, electricity, fuels and water (Q17b); but
  • where a business buys packaging materials for sale (without processing) to other business or to the public, the cost of the packaging materials should be included in Purchases of finished goods for resale (Q17a).

Note: 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 , as well as transport, handling and other costs directly attributable to the acquisition of the good ).

Capitalised purchases of materials i.e. purchases made to create capital assets, Should NOT be reported at Q17. Instead these capitalised purchases of materials should be reported at Capitalised expenditure including capitalised work done by own employees (Q28) or Capitalised wages and salaries and purchase of materials for capital work (Q29).



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How should I report expenditure on electricity, fuels and water?

Reporting of expenditure on electricity, fuels and water depends on how the electricity, fuels and water are used by the business, as shown in the following examples.
  1. Petroleum and diesel fuel purchased for retail sale - report as Purchases of finished goods for resale (Q17).
  2. Petroleum and diesel fuel purchased for use in own vehicles and equipment - report as Purchases of materials, components, containers and packaging materials, electricity, fuels and water (Q17b).
  3. Water rates paid - include in Purchases of materials, components, containers and packaging materials, electricity, fuels and water (Q17b).
  4. Electricity bills for powering office, plant, etc - include in Purchases of materials, components, containers and packaging materials, electricity, fuels and water (Q17b).
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How should I report payments to contractors and other businesses for services?

There is a specific question for Payments made 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. Payments made to contracted and owner-drivers to transport goods sold by your business to customers - include in Outward freight, cartage, delivery and transport expenses (Q18a).
  2. Postage costs - include in Payments made to contractors and other businesses for freight, cartage, delivery and transport services (Q18)
  3. Payment of separately invoiced delivery charges for inward movement of goods - include in Other freight, cart, delivery and transport expenses (Q18b).
  4. Payment for rent for your business premises - include in Other operating expenses (Q22)
  5. Payment of commission to another business for selling goods owned by your business - report as Other operating expenses (Q22).
  6. Payment to another business for training your employees - include in Other operating expenses (Q22).
  7. Travel and accommodation expenses for your employees - 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:

Consumables: Consumables such as stationery, staff amenity supplies, cleaning materials etc. should be reported as Purchases of materials, components, containers and packaging materials (Q17b).

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).

Equipment hire: Regardless of whether the equipment was hired with or without operator (i.e. "wet/dry hire"), the expenses should be reported as Other operating expenses (Q22).

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. 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 (where it is separately itemised in Q14); otherwise in Other operating expenses (Q22).

Motor vehicle insurance premiums:
  • Optional third party insurance premiums, payable at the discretion of the business, should be included in Insurance premiums (where it is separately itemised in Q13); otherwise in Other operating expenses (Q22).
  • Compulsory third party insurance premiums, payable as part of the vehicle registration process should be included in Other operating expenses (Q22).

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.

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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, paper supplies for use in printing newspapers (good produced) or raw food to make a meal (provide a service).

Work-in-progress
(Q27b) 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
(Q27c) consist of goods that are to be sold in their current condition, including goods for resale.

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. It can be considered the amount spent to purchase or upgrade productive assets like buildings or machinery to increase the businesses capacity or efficiency. 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).

The following are examples of how some common types of acquisitions should be reported under Capital expenditure including capitalised work done by own employees (Q28). (The value reported should be the purchase price of the asset acquired.)
  1. Cars, trucks and buses - in Road Vehicles (Q28a).
  2. Aeroplanes, trains and ships - in Other transport vehicles and equipment: (Q28b).
  3. Fork lifts, assembly line machines, presses and cranes - in Industrial machinery and equipment (Q28c).
  4. Audio visual equipment, electric lighting or signs, transformers and generators - in Electronic equipment and electrical machinery (Q28f).
  5. Tractors, photographic equipment, medical diagnostic equipment, fencing, breeding stock - in Other plant and equipment (Q28h).
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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 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 should be 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 as Capitalised wages and salaries (Q29a) and Purchases of materials for capital work (Q29b). That is to say that Capitalised work done by own employees (Q29) is a subset of Capital expenditure including capitalised work done by own employees (Q28).

Capitalised wages and salaries and purchases of materials reported at Q30 must only be those that relate to capital works. If they are wages and salaries or purchases relating to the daily operations of the business, they should be reported as an expense item in other relevant parts of the survey.
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MULTI-STATE OPERATIONS

How do I report income from sales of goods and services by state (Q32)
Income from sales of goods and services should align with amounts in Questions 4, 5, 6 and 9. It should be reported against the state or territory where the sale was made or the service was provided. For export sales, report against the state or territory from which the sale was made.
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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 submitting 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 2014? (i.e. Regardless of your reporting period; not including casual/seasonal employees who did not work during that pay period.)
  • 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 Total number of persons in Q3d?

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 on the survey.
  • Have the nature and amount of the main components of 'Other...' items been provided in Q10 (Other Income), Q22 (Other operating expenses) and Q28h (Capital expenditure - Other plant and equipment)?
  • 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 (Q17b)?
  • 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 (Q17a)?
  • Have the values of both opening and closing inventories (Q27) been reported, where applicable?
  • If Capitalised work done by own employees is reported in Q29c, the value must be less than or equal to the sum of Capital expenditure items reported in Q28.

Other information
  • Have you provided comments on any unusual movements regarding the information you have supplied. By taking the opportunity to do this you will enhance the value of the data you supply as well as minimising the chance of ABS staff being required to call you directly for clarification.
  • Have you provided an estimate of the time taken to complete this form? (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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