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Noncapitalized expenditures include expenses made during the year for ICT equipment including computer software not charged to asset accounts for which depreciation or amortization accounts are ordinarily maintained. Noncapitalized expenditures include purchases, operating leases and rental payments for ICT equipment, purchases and payroll for developing computer software, and software licensing and service/maintenance agreements. Such expenses fall below a firm's capitalization threshold or are not subject to capitalization (e.g. operating leases and rental payments), and are immediately written off and charged to expense accounts as incurred.
Capitalized expenditures include all expenditures during the year for ICT equipment including computer software chargeable to asset accounts for which depreciation or amortization accounts are ordinarily maintained. For projects lasting more than one year, this definition includes gross additions of ICT equipment to construction-in-progress accounts even if the equipment was not in use and not yet depreciated. For capital leases, the company using the asset (lessee) is asked to include the cost or present value of the leased equipment in the year in which the lease was entered.
Purchases include acquisitions and upgrades of equipment.
OPERATING LEASES AND RENTAL PAYMENTS
Operating leases and rental payments refer to payments made in exchange for use of equipment with no transfer of ownership. In multi-year agreements, only expenses for the current year are included.
COMPUTER AND PERIPHERAL EQUIPMENT
Computer and peripheral equipment include mainframes, personal computers, laptops, workstations, terminals, computer servers, printers, plotters, monitors, storage devices, personal digital assistants (PDAs), automatic teller machines (ATMs), point of sale terminals, etc.
INFORMATION AND COMMUNICATION TECHNOLOGY EQUIPMENT
Information and Communication Technology equipment include central office switching equipment, telephones and telephone apparatus, facsimile equipment, bridges, routers, gateways, portable transmitting and receiving antennas, communication satellites, cable television equipment, global positioning system (GPS) equipment, radio and television studio broadcasting equipment, fire detection and alarm systems, intercom systems, etc.
ELECTROMEDICAL AND ELECTROTHERAPEUTIC APPARATUS
Electromedical and electrotherapeutic apparatus include magnetic resonance imaging equipment, electrocardiographs, medical ultrasound equipment, electromedical endoscopic equipment, defibrillators, etc.
COMPUTER SOFTWARE EXPENDITURES
Computer software expenditures include purchases and payroll for developing software, and software licensing and service/maintenance agreements.
PURCHASES AND PAYROLL FOR DEVELOPING SOFTWARE
Purchases and payroll for developing software refers to acquisitions and/or upgrades for computer software. Computer software purchases (prepackaged, vendor-customized, and internally-developed) and payroll consist of costs of materials and services directly related to the development or acquisition of software, payroll and payroll-related costs for employees directly associated with software development, and interest cost incurred while developing the software. Purchased computer services are included only if they relate to vendor-customized software or adaptation to existing software.
Capitalized computer software is defined by the criteria in Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.
SOFTWARE LICENSING AND SERVICE/MAINTENANCE AGREEMENTS
Software licensing and service/maintenance agreements refer to expenses for software acquired under operating leases, site and seat licenses, and software service/maintenance agreements.