- 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- 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.
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.
Computer Software Expenditures- Computer software expenditures include purchases and payroll for developing
software, and software licensing and service/maintenance agreements.
Electromedical and Electrotherapeutic Apparatus- Electromedical and electrotherapeutic apparatus include magnetic resonance
imaging equipment, electrocardiographs, medical ultrasound equipment, electromedical
endoscopic equipment, defibrillators, 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.
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.
Purchases- Purchases include acquisitions and upgrades of equipment.
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
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