GLOSSARY
ABSBR
The Australian Bureau of Statistics Business Register. This contains a list of all businesses in Australia, sourced from the Australian Taxation Office. Most entities are represented by an Australian Business Number. This is suitable for ABS statistical needs when the business is simple in structure, however more significant and diverse businesses are profiled directly by the ABS.
Business
A business is generally considered to be a person, partnership, or corporation engaged in business or commerce.
Capital work done for own use
Capitalised work done by the employees or proprietors of a business in manufacturing, constructing, installing or repairing assets, in mineral and petroleum exploration activities, and the in-house development of computer software, for use by the business or for rental or lease. This work is valued at the capitalised costs of the materials and the wages and salaries involved.
Closing inventories
The value of all inventories of finished goods (including inventories for resale), work-in-progress (less progress payments billed), raw materials, fuels and containers at the end of the reporting period.
Depreciation and amortisation
Depreciation/amortisation allowed on tangible and intangible assets. Includes, for lessees only, depreciation/amortisation in respect of finance leases.
Employer contributions into superannuation
Includes all employer contributions to superannuation funds (including the employer productivity contribution) and provisions for employer contributions to superannuation funds. Also includes expenses relating to employer funded defined benefit schemes. Employee contributions and salary sacrifice contributions are excluded.
Industry division
The structure of ANZSIC comprises four levels, ranging from industry division (broadest level) to industry class (finest level). The main purpose of the industry division level is to provide a limited number of categories which give a broad overall picture of the economy. There are 19 divisions within ANZSIC, each identified by an alphabetical letter, that is, 'A' for Agriculture, forestry and fishing, 'B' for Mining, 'C' for Manufacturing, etc.
Industry subdivision
This is the broadest level category within each industry division of ANZSIC and is identified by a two-digit code, e.g. Industry Subdivision 14 for Wood product manufacturing. Industry subdivisions are built up from industry groups which, in turn, are built up from industry classes.
Industry value added (IVA)
IVA represents the value added by an industry to the intermediate inputs used by the industry. IVA is the measure of the contribution by businesses, in the selected industry, to gross domestic product.
The derivation of IVA for individual businesses depends on whether they are classified as market or non-market producers. Non-market producers are those institutions which provide goods or services either free or at prices that are not economically significant. In other words, their prices are not significantly influenced by the amounts that producers are willing to supply, nor the amounts that users are willing to pay to purchase the goods or services being provided. Conversely, market producers provide goods and services at prices that are economically significant.
For market producers, the derivation of IVA is as follows:
Sales and service income
plus Funding from federal, state and/or local government for operational costs
plus Capital work done for own use
plus Closing inventories
less Opening inventories
less Purchases of goods and materials
less Other intermediate expenses
equals IVA
However, it should be noted that IVA is a measure of economic activity and is not equivalent to operating profit before tax (OPBT). Wage and salary expenses and most other labour costs are not taken into account in the calculation for market producers, and neither are interest expenses, depreciation or a number of lesser expenses. On the income side, OPBT includes total income, whereas IVA only includes sales and service income and government funding for operational costs.
As a principle, the output of non-market production is valued at cost, including intermediate input expenses. As shown in the above derivation, purchases and other intermediate input expenses are deducted from output in order to arrive at IVA.
Accordingly, the derivation of IVA for non-market producers can be described as follows:
Selected labour costs
plus Depreciation and amortisation
equals IVA
Estimates of industry value added are obtained by summing the contributions of businesses classified to that industry, both market and (if any) non-market producers. Market producers predominate in most industries.
Industry value added is related to, but different from, the national accounting variable gross value added. For national accounts purposes, gross value added is calculated by adjusting IVA to include General government units and also to account for some other effects.
Off-June reporting
In annual surveys, businesses are asked to report their operations for the standard financial year. In Australia, this is July 1st to June 30th, however the standard financial year differs between countries. Off-June reporting occurs when a business is unable to report the standard financial year, and instead supplies information for a different, 'off-June' year. Many off-June reporters are companies which are based overseas, while some Australian businesses are off-June reporters for other reasons. For example, most schools report for a calendar year (1st January to 31 December) in order to align with the school year.
Opening inventories
The value of all inventories of finished goods (including inventories for resale), work-in-progress (less progress payments billed), raw materials, fuels and containers at the beginning of the reporting period.
Other expenses
In the QBIS collection, refers to all expenses other than selected labour costs (see the entry for Total expenses), interest, depreciation and amortisation, capital repayments, costs associated with the transfer of real estate, dividends, donations, export freight charges, extraordinary losses, foreign exchange losses, goods and service tax (GST), excise and duties payable to governments, income tax and other direct taxes, losses on asset sales, and unrealised gains/losses from revaluations of assets. The major items that are included are intermediate input expenses (defined in the entry for Total expenses).
Payroll tax
A tax levied by state and territory governments on the amount of wages and salaries paid by a business. Excludes pay-as-you-go withholding tax.
Purchases of goods and materials
Purchases (of materials, components, containers, packaging materials for manufacture or construction, purchases of finished goods for resale and delivery charges separately invoiced or itemised by suppliers) plus capitalised purchases (goods drawn from inventories for use as fixed tangible assets in capital work done by the employees or proprietors of a business for use by the business or for rental or lease).
Reference period
For each collection year, businesses are asked to report data for the year ended 30 June. However, if a business has a different financial year, it is asked to report for a 12 month period which ends between 1 October of the previous year and 30 September of the current year. This period is then used as a substitute for the financial year ended 30 June. For example, for the 2010-11 collection, a business may have reported data for the year ended 31 December 2010.
Sales and service income
Includes:
Sales of goods
- whether or not produced by the business (including goods produced for the business on a commission basis). Includes export sales, sales or transfers to related businesses or to overseas branches of the business, progress payments relating to long term contracts if they are billed in the period, delivery charges not separately invoiced to customers, sales of goods produced by the business from crude materials purchased, and income from 'specific' rates (e.g. water, sewerage, irrigation and drainage rates). Excludes excise and duties received on behalf of the government (e.g. the petroleum production excise duty), sales of assets, natural resource royalties income, interest income, and delivery charges separately invoiced to customers. Exports are valued free on board, i.e. export freight charges are excluded.
Income from services
- includes income from consulting services, repair, maintenance and service income and fees, contract, subcontract and commission income, management fees/charges from related and unrelated businesses, installation charges, delivery charges separately invoiced to customers and royalties from intellectual property (e.g. patents and copyrights) and natural resource royalties income. Excludes interest income, and delivery charges not separately invoiced to customers.
Rent, leasing and hiring income
- derived from the ownership of land, dwellings, buildings and other structures, motor vehicles, plant, machinery and other equipment. Excludes royalties from mineral leases, income from finance leases and payments received under hire purchase arrangements.
These are valued net of discounts given and exclusive of goods and services tax (GST). Extraordinary items are also excluded.
The above definitions are equivalent for both EAS and QBIS, with the exception that natural resource royalties income is not included as part of sales and service income for the QBIS collection.
Total expenses
The sum of all expense components.
Total income
Comprises sales and service income, interest income, funding from government for operational costs and other income.
Total selected industries
Total selected industries comprises data for all ANZSIC divisions, excluding ANZSIC Division A -
Agriculture, forestry and fishing, Division K -
Financial and insurance services and Division O - Public administrative and safety. For a detailed discussion of the scope and coverage of the estimates, see Chapter 2 - Scope and Population. Units classified to the
General government or
Rest of the world institutional sectors are excluded from the scope of estimates for most industries that comprise Total selected industries. This limits coverage to private sector entities and government-owned or controlled Public non-financial corporations.
Wages and salaries
The gross wages and salaries (including capitalised wages and salaries) of all employees of the business. The item includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and annual and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included, as are salary sacrificed earnings and remuneration of employees in the form of share based payments and stock options.
Payments related to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer are excluded. The drawings of working proprietors and partners are also excluded.
Workers' compensation premiums/costs
Workers' compensation is a compulsory insurance cover to be taken out by all employers, except for self-insured workers, according to legislative schemes to cover employees suffering injury or disease in the course of or arising out of employment.
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