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Example – NFP case study

Use this case study when completing the Company tax return 2024 for your not-for-profit organisation.

Published 11 December 2024

Guidance for NFP organisations

This example uses information provided in Case study 2: Celadon Club in Mutuality and taxable income for not-for-profits. Refer to Case study 2 for background information to help you understand this example, such as the club's financial statements and the calculation of its taxable income.

The Celadon Club has determined its taxable income for the year ended 30 June and is ready to complete the Company tax return 2024.

For guidance in completing its tax return, the club uses:

The following are extracts of the labels on the club’s completed return.

Relevant period

The club leaves this item blank, as the dates will default as 1 July 2023 to 30 June 2024.

Item 2 Description of main business activity

The club’s main activity is providing licensed facilities to its members and the general public. It enters ‘Licensed club’ in the Description of main business activity’ item and ‘45301’ at B Industry code.

Item 3 Status of company

The club is resident in Australia and is a NFP company. It selects C1 and D3.

The club is a small business entity and a base rate entity. It also selects F1 and F2.

The club does not select any other boxes as none of them apply.

Item 6 Calculation of total profit or loss

Item 6 amounts are from the following calculations. The club uses the revenue and expense items from its financial statements (refer to Case study 2).

T Total profit or loss equals the club’s net profit in its financial statements.

Income

Label

Revenue item

$

C

Bar sales

827,695

C

Bingo and raffle income

23,496

C

Club luncheons – ticket sales

22,500

C

Poker machine revenue

1,598,247

 C

Total at C

2,471,938

F

Interest received

54,322

G

Function room hire

6,000

G

Lease income – restaurant

10,000

G

Total at G

16,000

R

Total of other revenue amounts

137,840

S

Total Income

2,680,100

Note: C Other sales of goods and services includes gross sales of trading stock and gross earnings from services. After filling in relevant specific labels, any remaining gross revenue (such as membership subscriptions) is included at R Other gross income.

Expenses

Label

Expense item

$

A

Bar expenses – cost of goods sold

392,576

A

Bingo expenses

4,533

A

Club luncheons – catering

13,500

A

Club luncheons – entertainment

3,000

A

Raffle expenses

24,851

A

Central monitoring service charges

26,183

A

Total at A

464,643

D

Superannuation

66,499

X

Bar – decline in value

13,592

X

Decline in value (depreciating assets)

121,498

X

Gaming – decline in value

262,481

X

Total at X

397,571

Z

Bar – maintenance and supplies

29,764

Z

Gaming – repairs and maintenance

36,438

Z

Repairs and maintenance

86,563

Z

Total at Z

152,765

S

Total of other expense amounts

1,320,429

Q

Total expenses

2,401,907

Note: X Depreciation expenses includes depreciation amounts for accounting purposes because the club is not using the simplified depreciation rules. After filling in relevant specific labels, any remaining expenditure (such as subscription expenses) is included at S All other expenses.

Item 7 Reconciliation to taxable income or loss

Item 7 amounts are from the following calculations. The club uses Worksheet 2 in the Instructions to complete the company tax return 2024 for W Non-deductible expenses and Q Other income not included in assessable income.

T Taxable income or loss equals the club's taxable income in Case study 2.

Label

Classification item

$

W

Depreciation expenses – X item 6

397,571

W

Expenses incurred in deriving non-assessable non-exempt income:

  • member's magazine $8,000
  • membership cards $2,000
  • subscription expenses $9,226

19,226

W

Other non-deductible expenses less non-deductible decline in value expenses (see Note a)

1,352,186

W

Total at W

1,768,983

F

Deduction for decline in value of depreciating assets (see Note b)

111,479

Q

Other income amounts in the accounts that are not assessable income:

  • member subscriptions

51,800

Q

Other non-assessable revenue (see Note c)

1,780,616

Q

Total at Q

1,832,416

Note: The following figures are taken from 'Step 3: Separate the apportionable items' in Case study 2:

  • a Total non-deductible expenses less total non-deductible decline in value (depreciating assets)
    • = $1,638,278 – ($9,781 + $87,430 + $188,881)
      = $1,352,186
  • b Total deductible decline in value (depreciating assets)
    • = $3,811 + $34,068 + $73,600
      = $111,479
  • c Total non-assessable revenue = $1,780,616.

Item 15 Licensed clubs only

As the Celadon Club is a licensed club, it calculates the percentage of its non-member income as follows:

  • = (total non-member income ÷ total income) × 100
  • = ($847,684 ÷ $2,680,100) × 100 = 31.6288%.

Note: Total non-member income = Assessable income from 'Step 4: Calculate the taxable income' in Case study 2.

The club rounds the percentage to whole figures and writes 32% at A.

The percentage of non-member income entered at this item differs from the club's non-member percentages calculated in Case study 2. This is because:

  • the club used more than one method of apportionment – that is, both a simple method and the Waratahs formula
  • the club's total income includes non-member income such as bank interest.

For further information, see Mutuality and taxable income for not-for-profits.

QC103573