Capital Expenditures (Questions 2.15 and 2.16)

36.  Do "domestic capital expenditures for R&D operations" refer to only those acquisitions to be used in the performance of domestic R&D or any capital expenditure incurred by the domestic operations of my company regardless of location?

"Domestic capital expenditures for R&D operations" refer to those capital expenditures for assets to be used in the performance of domestic R&D.

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37.  Should R&D assets acquired through merger and acquisition activities be included in "capital expenditures" reported on Question 2.15?

No. R&D assets acquired through merger and acquisition activities would not be included in your report. The domestic capital expenditures of the subsidiary acquired would be reported as part of their company report, if applicable.

For example,

• If your company purchased a building for domestic R&D purposes from Ajax Corp. it would be reported as part of Questions 2.15 and 2.16, line a.
• If you acquired Ajax Corp. (including the R&D building) you would not report the acquisition as part of your company’s capital expenditures for the period.

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38.  Should land be included in 'capital expenditures'?

Yes. Report expenditures for the acquisition or improvement of land that was for R&D operations in Question 2.15 and in Question 2.16, line d (All other capital expenditures for R&D operations).

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