General guidelines for reporting inter-company transactions in this survey:
Reporting for “worldwide activities”- The reporting unit is your company, including all domestic and foreign subsidiaries that are more than 50% owned by your company for financial reporting purposes. All transactions between subdivisions within this reporting unit should be eliminated as inter-company transactions. For reporting purposes, your foreign parent (if you are foreign owned) and any foreign affiliates your company does not own by more than 50% should not be treated as part of ‘your company’ in your report. Transactions with these units should be treated the same as with any unrelated third parties such as business partners, customers, or suppliers you do not own.
Reporting
for “domestic operations”-
In this survey “domestic operations” refers to your
company’s operations located in the 50 United States and D.C.
When reporting for your domestic operations, include transactions
with foreign subsidiaries. For example, Question 6 asks how much of
your company’s total sales and revenues were from your
company’s domestic operations. All revenue from the domestic
operations, including sales to subsidiaries or affiliated companies
overseas, should be reported in this question.
1 Was your company a majority-owned subsidiary of a foreign company in 2014?
Question 1 ask about whether or not the company is foreign-owned, If your answer is “No”, skip to question 3. If your answer is “Yes”, continue with question 1 by entering the name of the company.REPORTING INSTRUCTIONS FOR FOREIGN-OWN COMPANIES:If your company is foreigh-owned, the reporting unit for this survey is your U.S.-based company, including all its majority-owned subsidiaries and divisions regardless of location. For reporting purposes, your foreign owner and any other foreign affiliates your company does not own should be treated the same as any other customer or business partner you do not own.
If you pay your foreign owner for R&D services, those costs should be included in your response to Question 11.
If your foreign owner pays or reimburses your company for R&D services, the costs for this R&D should be included in your response to Question 16, line a.
Question 2 asks about the majority of the ownership of the voting interest of the company receiving the survey. Special reporting instructions apply to companies that have been acquired by another company. If your answer is “No” skip to question 3. If your answer is “Yes” continue with question 2 by entering the name of the parent company, the EIN of the owner, and the date the company ceased operations).
REPORTING INSTRUCTIONS FOR U.S.-OWNED COMPANIES:
If your company was purchased between April 1, 2014 and December 31, 2014, report only for the period January 1, 2014 to the date of purchase. If your company was purchased before April 1, 2014, complete Question 1-6 and return this form to the Census Bureau – you are not required to complete the rest of this survey unless your owner instructs you to complete this survey.
If your company is owned by a foreign company, check “Yes” and follow these instructions: If your company is foreign-owned, the reporting unit for the survey is your U.S.-based company, including all its majority-owned subsidiaries and divisions regardless of location. For reporting purposes, your foreign owner and any other foreign affiliates your company does not own should be treated the same as any other customer or business partner you do not own.
If you pay your foreign owner for R&D services, those costs should be included in your responses as “costs for purchased R&D services.”
If your foreign owner pays or reimburses your company for R&D services, the costs for this R&D should be included in your responses as “costs funded, paid for, or reimbursed by others.”
Report your survey data using U.S. generally accepted accounting principles (U.S. GAAP) as recognized by the Financial Accounting Standard Board (FASB). If your company follows International Financial Reporting Standards (IFRS), we request that you make adjustments in order to conform to U.S. GAAP.
If your company is owned by a U.S. based company, check “No” and enter the owner’s EIN. If your company was purchased before April 1, 2014, stop here and return the survey to the Census Bureau. If your company was purchased between April 1, 2014 and December 31, 2014, report only for the period January 1, 2014 to the date of purchase.
Example 1: Company A was acquired by Company P (a US company) on Feb. 1, 2014.
Because Company A was acquired by a US company prior to April 1, 2014, Company A is not required to complete this survey. Company A will stop here and return the form to the Census Bureau.
Example 2: Company B is acquired by Company P (a US company) on July 1, 2014. Because Company B was acquired by a US company on or after April 1, 2014, Company A is instructed to complete the survey, reporting data for the period January 1, 2014 through July 1, 2014.
Why April 1?
The Census Bureau has determined that for this survey the benefit of collecting data from a company for a period less than one quarter of a year does not outweigh the burden placed on the company to report the data.
Why is this important?
Companies are asked this question for three reasons: to eliminate double counting in cases where both parties in a business acquisition receive the survey; to guide foreign-owned companies to special instructions; and to reduce the burden on companies who would otherwise be reporting data for a period less than one quarter of the year.
Scenario 1: Your company ceased operations before April 1, 2014. Complete questions 1 through 3 and return the survey to the Census Bureau.
Scenario 2: Your company ceased operations between April 1, 2014 and December 31, 2014. You should complete the survey as instructed and report for the period from January 1, 2014 to the date your company ceased operations.
Why April 1?
The Census Bureau has determined that for this survey the benefit of collecting data from a company for a period less than one quarter of a year does not outweigh the burden placed on the company to report the data.
Why is this important?
Data from companies that have ceased operations during 2014 are needed in order to accurately measure the total activity of companies operating in the United States during 2014.
3? Please provide the name and phone number of the person completing this survey.
The survey coordinator is the person who is in charge of managing your company’s responses to this survey and submitting the survey to the U.S. Census Bureau. The survey coordinator will need to collaborate with employees from other divisions/departments within your company such as the product development, R&D, human resources, finance and legal departments.
Why is this important?
This information gives the Census Bureau a single point of contact at each company surveyed in case questions arise about survey responses. The point of contact for this survey may differ from that for other Census Bureau surveys.
4 Please describe your company’s primary business activity during 2014.
This information is needed in order to tabulate more accurate and useful industry-level data.
5 What was the amount of your company’s worldwide sales and revenues during 2014?
Your company’s worldwide sales and revenue would include sales by your foreign operations and subsidiaries, as well as, revenues from domestic operations. If your company is owned by a foreign parent, report sales to your parent and those affiliates not owned by your company.
Include sales and operating revenues for discontinued operations.
Exclude non-operating income such as dividends and interest as well as excise, sales, and other revenue-based taxes.
Question 6 asks for the company’s sales and revenues generated by domestic operations regardless of where the customers are located. “Domestic sales” does not mean sales to customers located in the United States. If your company is owned by a foreign parent, then sales to your parent and those affiliates not owned by your company are included.
Include sales and operating revenues to foreign customers, including foreign subsidiaries.
Example: US Manufacturing Corporation sells parts to customers around the world. However, because all its operations are located inside the United States, it reports 100% of its sales in this question.
A product innovation is the mark introduction of a new or significantly improved good or service with respect to its capabilities, user friendliness, components, or sub-systems.
Product innovations (new or improved) must be new to your company, but they do not need to be new to your market.
Product innovations could have been originally developed by your company or by other companies.
7 During the three years 2012 to 2014, did your company introduce:
Question 7 asks whether the company introduced any new or significantly improved goods or services, which are divided into separate sub-questions:
New or significantly improved goods (Exclude the simple resale of new goods purchased from other companies and changes of a solely aesthetic nature)?
New or significantly improved services?
8 Using the definitions above, please give the percentage of your total sales in 2014 from:
Question 8 asks how much of the company’s total worldwide sales in 2014 are attributable to different types of product innovations. Specifically, it asks what percent of the company’s total worldwide sales in 2014 that were from:
New or significantly improved goods and services introduced during 2012 to 2014 that were new to your market
New or significantly improved goods and services introduced during 2012 to 2014 that were new only to your company
Goods and services that were unchanged or only marginally modified during 2012 to 2014 (include the resale of new goods or services purchased from other companies)
Total sales in 2014
A process innovation is the implementation of a new or significantly improved production process, distribution method, or support activity for your goods or services.
Process innovations must be new to your company, but they do not need to be new to your market.
The innovation could have been originally developed by your company or by other companies.
Exclude purely organizational innovations..
During the three years 2012 to 2014, did your company introduce:
New or significantly improved methods of manufacturing or producing goods or services?
New or significantly improved logistics, delivery or distribution methods for your inputs, goods, or services?
New or significantly improved supporting activities for your processes, such as maintenance systems or operations for purchasing, accounting, or computing?
R&D paid for by your company
10 What was the total worldwide R&D expense for your company in 2014?
Question 10requests total worldwide R&D expense. The reporting unit is your company, including all domestic and foreign subsidiaries that are more 50% owned by your company for financial reporting purposes. All transactions between subdivisions within this reporting unit should be eliminated as inter-company transactions. Total worldwide R&D expense also includes payments by your company for R&D services performed by (i) unrelated third parties, (ii) affiliates for which your company has less than a 50% ownership stake and/or (iii) your foreign parent, if your company is foreign owned.
Scenario 1: Your company is publicly traded. Report worldwide R&D expense as reported on SEC Form 10-K as defined in FASB ASC Topic 730, Research and Development (FASB Statement No. 2, “Accounting for Research and Development Costs.”)
Scenario 2: Your company is foreign-owned. Report the R&D expense figure of the U.S.-located company and domestic and foreign subsidiaries that are more than 50% owned by your U.S.-located company, if any. Do not include expenses by your foreign parent or by any foreign affiliate your U.S.-located company does not own. For reporting purposes, these entities should be treated the same as any unrelated third party such as a customer or supplier you do not own.
Scenario 3: Your company is privately owned. You should follow the same procedures as public companies when reporting R&D expense and follow the guidance in FASB ASC Topic 730, Research and Development (FASB Statement No. 2, “Accounting for Research and Development Costs.”). Privately held companies that cannot report on this basis should note reporting principles and difficulties in the space for "Remarks" at the end of the survey.
The following are examples of activities that typically would be excluded from research
and development in accordance with FASB Statement No. 2, “Activities Constituting Research and Development” (http://www.fasb.org/pdf/fas2.pdf) :
Engineering follow-through in an early phase of commercial production.
Quality control during commercial production including routine testing of products.
Trouble-shooting in connection with break-downs during commercial production.
Routine, on-going efforts to refine, enrich, or otherwise improve upon the qualities of an
existing product.
Adaptation of an existing capability to a particular requirement or customer's need as part of a continuing commercial activity.
Seasonal or other periodic design changes to existing products.
Routine design of tools, jigs, molds, and dies.
Activity, including design and construction engineering, related to the construction,
relocation, rearrangement, or start-up of facilities or equipment other than (1) pilot plants
(see paragraph 9(h)) and (2) facilities or equipment whose sole use is for a particular
research and development project (see paragraph 11(a)).
Legal work in connection with patent applications or litigation, and the sale or licensing of patents.
Exclude from worldwide R&D expense:
Costs for R&D that was paid for by a 3rd party such as R&D performed under contract.
For medical products companies, exclude costs for phase IV clinical trials since these trials take place after products have achieved technical and market feasibility.
Research and development activity in software:
Does R&D include development of software and Internet applications?
Yes, as long as the research and development activities include an element of uncertainty, are intended to close knowledge gaps, and meet scientific and technological needs.
Report in this survey all software R&D as defined here regardless of the eventual user (internal or external).
R&D activity in software includes:
Software development or improvement activities that expand scientific or technological knowledge
Construction of new theories and algorithms in the field of computer science
R&D activity in software EXCLUDES:
Software development that does not depend on a scientific or technological advance, such as:
supporting or adapting existing systems
adding functionality to existing application programs, and
routine debugging of existing systems and software
Creation of new software based on known methods and applications
Conversion or translation of existing software and software languages
Adaptation of a product to a specific client, unless knowledge that significantly improved the base program was added in that process
For further guidance on accounting for software development costs see FASB Statement No. 86 (Accounting for the Costs of Computer Software to Be Sold, Leased); and FASB Interpretation No. 6 (Applicability of FASB Statement No. 2 to Computer Software).
11 Is the amount entered in Question 10greater than zero?
Question 11 instructs the company to skip to Question 15 if its response to Question 10 is zero.
Although most companies share a general framework for R&D, we request that certain items be excluded for the sake of consistency. Certain costs and expenses are to be reported in Question 12 reflecting your company’s R&D activities that was paid for by others.
Question 12 asks whether the company’s R&D expense figure reported in Question 10 included costs for five specific categories:
Collaborative research and development that was reimbursed by business partners, such as through cost-sharing agreements
These agreements are very common in the biotechnology and pharmaceutical industries, but less so in other industries.
R&D paid for by government or private foundation grants
Examples include Small Business Innovation and Research (SBIR) grants, Department of Energy demonstration grants, and Gates Foundation research grants.
Technical services not an integral part of an R&D project (such as product support provided by R&D employees)
This category most often applies to software and service companies where R&D staff also provide technical support and/or services to customers
Bid and proposal costs
This category represents the costs a company incurs applying to win a contract. Some government contractors group these costs with their R&D spending.
Expense your company claimed resulting from the acquisition of another company with unfinished R&D projects (In-process R&D).
Why is this important?
Not all companies treat the five cost categories listed in this question consistently with respect to their inclusion or exclusion from R&D expense figures. This question allows the survey to measure and correct for these inconsistencies.
13 If you answered “Yes” to any of the costs in Question 12?, what was the amount of these costs that was included in your response to Question 11??
Question 13 asks the company to estimate the amount of its R&D expense figure reported in Question 10 that was from the categories listed in Question 10.
Why is this important?
The five cost categories listed in Question 12 are not treated consistently by all companies with respect to their inclusion or exclusion from R&D expense figures. This question allows the survey to measure and correct for these inconsistencies.
See also: Question 10, Question 12
14 Subtract Question 14 from Question 10 and enter the result here. This is the total R&D paid for by your company in 2014.
Question 14 asks the company to subtract the amount reported in Question 13 from the amount reported in Question 10. This survey refers to this amount as “total R&D paid for by your company”.
Why is this important?
The five cost categories listed in Question 12 are not treated consistently by all companies with respect to their inclusion or exclusion from R&D expense figures. This question allows the survey to measure and correct for these inconsistencies.
See also: Question 10, Question 13
R&D paid for by others
15What were your company’s total worldwide costs (both direct and indirect) in 2014 for the following that were funded, paid for, or reimbursed by others not owned by your company?
Costs should be considered “funded, paid for, or reimbursed by others” if the company has been or expects to be paid for the costs by a customer, business partner, or grant-making organization.
Note: Foreign-owned companies should reports costs that are funded, paid for, or reimbursed by their foreign owner in this question.
Exclude payments in excess of the actual cost of the work performed (such as profits or fees).
Costs that were reported in Question 13 should not be double counted in this question.
If your company administers a federally-funded research and development center (FFRDC) for an agency of the federal government, all such R&D costs should be excluded for reporting to this survey. For a complete list of FFRDCs, see http://www.nsf.gov/statistics/ffrdclist/.
The categories in this question, listed below, define what the survey terms, “R&D paid for by others”:
R&D that was reimbursed by your company’s foreign parent (if you are owned by a foreign parent)
Collaborative R&D that was reimbursed by business partners, such as through cost-sharing agreements
These agreements are very common in the biotechnology and pharmaceutical industries, but less so in other industries.
R&D paid for by government or private foundation grants
Examples include Small Business Innovation and Research (SBIR) grants, Department of Energy demonstration grants, and Gates Foundation research grants.
Defense RDT&E goods or services (including DOD 6.1 through 6.7 funding), provided as a prime or as a sub, to the government and/or government contractors
This category most often applies to defense contractors and subcontractors performing tasks such as designing, building, and testing prototypes of new military weapon systems and developing custom software for defense applications.
Include all defense R&D funded by the Department of Defense (DOD), the Department of Energy’s weapons programs, the Department of Homeland Security, and other Federal agencies.
R&D funds from DOD include all funds for research, development, test, and evaluation (RDT&E) activities (6.1 through 6.7 budget appropriations).
Include defense R&D performed as a prime contractor and/or as a subcontractor.
Medical nonclinical R&D services provided to others not owned by your company
Nonclinical (also known as preclinical) research and development involves research on potential medical products that does not involve human subjects. This R&D consists of both in vitro studies as well as studies using animal subjects.
Medical clinical trial Phase I-III services provided to others not owned by your company (include pass-through costs)
This category involves the testing of potential medical products in human subjects. Phase I – III clinical trials must be successfully passed in order for a product to be approved for use in the general population.
Exclude costs for Phase IV clinical trials because these trials take place after a product has been approved for sale.
Nondefense custom software development and/or computer systems designed for others not owned by your company
See definitions in “Research and development activity in software” under guidance for Question 2-1.
This category includes the development of new or significantly improved software, both as an end product and for use embedded in other products.
Exclude: Software development that does not depend on a scientific or technological advance such as adding functionality to existing application programs, debugging systems, and adapting existing software.
Software development for defense-related applications should be reported in line d.
Prototype development, production, and testing for customer’s products prior to their introduction to the market (excluding defense-related prototyping reported in line d)
Exclude quality control testing and other testing services for products already on the market.
All other R&D, not included above, provided to the Federal Government or to others not owned by your company
16What was the total number of worldwide employees working at your company for the pay period that included March 12, 2014?
Question 16 asks the company to report its total number of employees (both R&D and non-R&D employees) for all locations, both foreign and domestic. In order to collect consistent data from all companies, the employment figure reported should be for the pay period that included March 12, 2014. If this is not possible, companies should report employment for the date closest to March 12, 2014 possible.
Leased and temporary employees and consultants should be excluded from this question because this survey does not consider them employees of the reporting company.
Include full- and part-time employees.
Exclude leased or temporary employees and consultants.
17 How many of the employees reported in Question 16 were employees of your company’s domestic operations and foreign operations?
Question 17 asks the company to report, of the employees reported in Question 16, the number of employees employed by domestic operations and the number of employees that were employed by operations outside of the United States.
Counts of (1) Domestic operations, (2) Foreign operations, and (3) Total employees should be recorded.
Note: The total should equal Question 16.
18 How many employees reported in Question 17 were R&D employees and how many were all other employees?
Question 17 asks the company to report how many of its employees were R&D employees.
R&D employees include employees who work on R&D or who provide direct support to R&D such as researchers, R&D managers, technicians, clerical staff, and others assigned to R&D groups.
R&D employees exclude employees who provide indirect support to R&D, such as corporate personnel, security guards, and cafeteria workers.
Counts of (1) Domestic operations, (2) Foreign operations, and (3) Total employees should be recorded for:
R&D employees
All other employees
Total employees
Note: The total employees line should equal the total for Question 17.
20 Of the domestic R&D employees reported in Question 18, line a, what was the number of full-time equivalent (FTE) R&D employees working at your company for the pay period that included March 12, 2014?
Question 20 asks the company to report the number of full-time equivalent employees engaged in R&D using the same reference period as the earlier employee questions. The headcount of full-time equivalent R&D employees should be adjusted to account for employees who work part time as well as those employees who split their time between R&D and other activities. The purpose of this question is to accurately measure the amount of effort employees are devoting to R&D in the business sector.
25 Approximately how long did it take to complete this survey?
Question 25 asks you to estimate the time in hours and minutes that it took to complete this survey. This helps us understand the amount of burden the survey averages for companies.
| File Type | application/msword |
| File Title | Question 1-1 |
| Author | heili001 |
| Last Modified By | Jeannette D Greene-Bess |
| File Modified | 2015-04-16 |
| File Created | 2015-04-16 |