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Glossary of Terms

Term
Definition
Business receipts and other income
(i) For information and communications industry :
Business receipts and other income
= receipts from services rendered + receipts from rental of machinery and equipment + value of sales of goods + interest income + rental income from letting/subletting land and buildings + royalty receipts from patents, trademarks, copyrights, and franchises + dividends + gain/loss from trading of financial assets + income from other sources;

(ii) For banking industry :
Business receipts and other income (for domestic banking units)
= commissions and fees received in respect of credit, bills transactions and loans (excluding syndicated loans) + charges received in respect of current account operations, executor and trustee services, guarantees, portfolio management, custody and remittance services + charges received in respect of investment banking services + commissions and fees received in respect of syndication of loans + commissions and fees received in respect of financial assets dealing and broking + administrative fees received from parent and affiliated companies + receipts from other banking and financial services rendered + rental income from letting/subletting land and buildings + net interest receipts (viz. interest received less interest paid) + profit or loss from foreign exchange dealing + profit or loss from trading in securities + dividends received + income from other sources;

(iii) For financing (except banking) industry :
Business receipts and other income
= receipts from services rendered + receipts from rental of machinery and equipment + interest income + rental income from letting/subletting land and buildings + dividends + gain/loss from trading of financial assets + income from other sources;

(iv) For insurance industry - insurance underwriting :
Business receipts and other income
= total premiums received + total reinsurance commissions received in respect of direct insurance and inward reinsurance + net income from investment + receipts from services rendered + income from other sources;

(v) For insurance industry - activities auxiliary to insurance and pension funding :
Business receipts and other income
= receipts from services rendered + rental income from letting/subletting land and buildings + income from other sources;

(vi) For professional, scientific and technical activities; and administrative and support service activities (except travel agency, reservation service and related activities) :
Business receipts and other income
= receipts from services rendered + receipts from rental of machinery and equipment + value of sales of goods + interest income + rental income from letting/subletting land and buildings + dividends + gain/loss from trading of financial assets + government subvention + royalty receipts from patents, trademarks, copyrights, and franchises + income from other sources;

(vii) For travel agency, reservation service and related activities :
Business receipts and other income
= receipts from services rendered + receipts from rental of machinery and equipment + value of sales of goods + interest income + rental income from letting/subletting land and buildings + revenue from services related to outbound travel, inbound travel, domestic travel and other travel services + revenue from airline, vessel, train and bus tickets sold + freight revenue + income from other sources
Changes in stocks
For the Industry Section of information and communications, professional and business services :
Changes in stocks
= book value of stocks at end of reporting period – book value of stocks at beginning of reporting period
Compensation of employees
Compensation of employees
= wages and salaries (including share-based payments) + payments in kind and employer's social security expenditure (including contributions to Mandatory Provident Fund schemes, messing, medical expenses and premiums for employees' compensation insurance)
Establishment
An establishment is defined as an economic unit (i.e. a unit engaged in the production of goods or services) which engages, under a single ownership or control, in one or predominantly one kind of economic activity at a single physical location. Where separate figures relating to different activities or different locations under the same management are not available, a combined return is accepted and in this case, the reporting unit is treated as an establishment.
Gross surplus
(i) For information and communications, professional and business services sectors : Gross surplus = business receipts and other income – compensation of employees – operating expenses – total value of purchases of goods for sale + changes in stocks of goods for sale; (ii) For financing (except banking) : Gross surplus = business receipts and other income – compensation of employees – operating expenses
Local office
A local office is an office that only takes charge of the business in Hong Kong (but nowhere else) on behalf of its parent company located outside Hong Kong.
Regional headquarters
A regional headquarters is an office that has managerial control over offices in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong.
Regional office
A regional office is an office that coordinates offices and/or operations in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong.
Number of persons engaged
Number of persons engaged
= number of working proprietors, active partners and unpaid family workers + number of employees
Operating expenses
(i) For information and communications, financing (except banking), professional and business services sectors : Operating expenses = rent, rates and government rent for land and buildings + property/building management fees + interest expenses, bill interest and loan interest + charges paid to banks, deposit-taking companies and other financial institutions + transport and travelling expenses + newspaper and magazines, and telecommunications expenses + postal and courier service expenses + administration charges paid to related companies + advertisement and business promotion expenses + accounting, audit and legal fees + other professional and business services fees + expenses in maintaining representative offices outside Hong Kong + entertainment expenses + repairs and maintenance + materials and supplies used in business + fuels, water, electricity + commissions and brokerage fees + rentals for hiring machinery, equipment and vehicles + royalty payments for the use of patents, trademarks, copyrights and franchises (paid to government and bodies other than government) + payments to local independent artists + payments to artists from places outside Hong Kong + cost of contract work + staff training expenses + expenditure on purchases of computer hardware and peripheral equipment for own use + expenditure on purchases of pre-packaged/customised computer programs, software and databases for own use + expenditure on repairs and maintenance of IT equipment + expenses on other IT related services + other operating expenses; (ii) For insurance industry : Operating expenses = rent, rates and government rent for land and buildings + property/building management fees + interest expenses, bill interest and loan interest + charges paid to banks, deposit-taking companies and other financial institutions + transport and travelling expenses + newspaper and magazines, and telecommunications expenses + postal and courier service expenses + administration charges paid to related companies + advertisement and business promotion expenses + accounting, audit and legal fees + other professional and business services fees + repairs and maintenance + materials and supplies used in business + fuels, water, electricity + claims-handling expenses (for insurance underwriting only) + staff training expenses + expenditure on purchases of computer hardware and peripheral equipment for own use + expenditure on purchases of pre-packaged/customised computer programs, software and databases for own use + expenditure on repairs and maintenance of IT equipment + expenses on other IT related services + other operating expenses
Value added
(i) For information and communications Industry :
Value added
= business receipts and other income (excluding interest income, dividends, gain/loss from trading of financial assets and income from other sources) – total value of purchases of goods for sale (adjusted for changes in stocks of goods for sale) – operating expenses (excluding interest payments);

(ii) For financing (except banking) industry :
(a) Value added (except investment and holding companies, financial leasing, and credit granting (except financial leasing))
= business receipts and other income (excluding interest income, dividends, gain/loss from trading of financial assets and income from other sources) – operating expenses (excluding interest payments); and

(b) Value added (financial leasing and credit granting (except financial leasing))
= business receipts and other income (excluding dividends, gain/loss from trading of financial assets and income from other sources) – operating expenses;

(iii) For professional, scientific and technical activities; and administrative and support service activities (except travel agency, reservation service and related activities) :
Value added
= business receipts and other income (excluding interest income, dividends, gain/loss from trading of financial assets, government subvention and income from other sources) – total value of purchases of goods for sale (adjusted for changes in stocks of goods for sale) – operating expenses (excluding interest payments);

(iv) For travel agency, reservation service and related activities :
Value added
= business receipts and other income (excluding interest income and income from other sources) – total value of purchases of goods for sale (adjusted for changes in stocks of goods for sale) – operating expenses (excluding interest payments)