U.S. businesses spent $250.7 billion on information and communication technology equipment and computer software in 2006, an increase of 6.3 percent from 2005, according to a recent report from the U.S. Census Bureau.
The report, Information and Communication Technology Survey, presents annual data on noncapitalized and capitalized business spending for information and communication technology equipment and computer software. It serves as a supplement to the broader Annual Capital Expenditures Survey report.
Noncapitalized expenditures are expenses for assets that have a useful life of more than one year and are written off in the same year in which they are made. Capitalized expenditures are expenditures for assets that have a useful life of more than one year and are usually depreciated.
Of the total spending in 2006 on information and communication technology equipment and computer software, sometimes referred to as e-business infrastructure, noncapitalized spending accounted for $90.8 billion (36.2 percent), and capitalized spending accounted for $159.9 billion (63.8 percent). Noncapitalized spending in 2006 was unchanged from 2005, while capitalized spending increased 10.9 percent.
Rapid technological advances in e-business equipment, such as computers, telephones, fax machines and electromedical apparatus, have resulted in these assets being replaced much more quickly than other types of equipment. Many companies write off the full cost of these assets during the year of purchase rather than depreciating the cost over two or more years.
In the three categories of noncapitalized spending on e-business infrastructure, purchases of equipment accounted for $18.6 billion; operating leases and rental payments, $18.2 billion; and computer software expenditures, $54 billion.
Two categories accounted for total capitalized spending on e-business infrastructure in 2006: purchases of equipment, $100.6 billion, an increase of 6.8 percent from 2005; and purchases and payroll for developing software, $59.3 billion, an 18.4 percent increase over 2005.
Data in the report are subject to sampling variability as well as nonsampling errors. Sources of nonsampling error include errors of response, nonreporting and coverage. More details concerning survey design, methodology and data limitations are provided in the full report, which is available online at <www.census.gov/econ/ict/>.