• ### Simple methods

In many situations, it is easy to separate the apportionable items into member and non-member revenue. However, you may need to apportion expenses where you cannot identify the expenses as relating to either member or non-member.

Example 1: Single event – non-member tickets percentage

The Cerise Society holds monthly social events throughout the year. It sells tickets to the events to both members and non-members.

In the 2015–16 income year, the society recorded ticket sales of \$20,000. This represented 1,000 tickets at \$20 a ticket – 600 tickets were sold to members and 400 tickets were sold to non-members. The total cost of running the events was \$15,000.

The society separates its revenue and expenses for the events as follows. First, it determines the percentage that relates to non-members.

= number of non-member tickets sold
total number of tickets sold

=  400
1,000

= 40%

The society then applies this percentage to the events sales and costs to arrive at the assessable income and deductible expenses components.

Assessable income component
= \$20,000 x  40% = \$8,000

Deductible expenses component
= \$15,000 x  40% = \$6,000

These amounts are then added to any other assessable income or deductible expenses.

Example 2: Non-member revenue percentage

The Cerulean Association derives revenue from members and from investments (rent and interest). Investment income is the only non-member income it derives.

In the 2015–16 year, the association's membership revenue totalled \$360,000 and its investment income totalled \$40,000.

The association also had expenses of \$30,000 (consisting of office supplies, rent, telephone and electricity expenses) which did not relate specifically to its membership revenue or its investment income.

To determine the deductible component of these expenses the association first determines its non-member percentage:

= investment income
total revenue

=  40,000
400,000

= 10%

The association then applies this percentage to the expenses to arrive at the deductible expenses component.

Deductible expenses component
= \$30,000 x  10% = \$3,000

This amount is then added to any other deductible expenses.

End of example