Integrated Business Statistics Program (IBSP)
This guide is designed to assist you as you complete the Annual Capital Expenditures Survey - Preliminary Estimate and Intentions.
If you need more information, please call the Statistics Canada Help Line at the number below.
Help Line: 1-833-977-8287 (1-833-97STATS)
Table of contents
Dollar amounts
- All dollar amounts reported should be rounded to thousands of Canadian dollars (e.g., $6,555,444.00 should be rounded to $6,555);
- Exclude sales tax;
- Your best estimates are acceptable when precise figures are not available;
- If there are no capital expenditures, please enter '0'.
Definitions
What are Capital Expenditures?
Capital Expenditures are the gross expenditures on fixed assets for use in the operations of your organization or for lease or rent to others. Gross expenditures are expenditures before deducting proceeds from disposals, and credits (capital grants, donations, government assistance and investment tax credits).
Include:
- Cost of all new buildings, engineering, machinery and equipment which normally have a life of more than one year and are charged to fixed asset accounts
- Modifications, acquisitions and major renovations
- Capital costs such as feasibility studies, architectural, legal, installation and engineering fees
- Subsidies and grants received and used in additions to fixed assets and construction-in-progress during the period
- Capitalized interest charges on loans with which capital projects are financed
- Work done by own labour force
- Additions to capital work in progress (construction-in-progress) accounts.
Exclude:
- transfers from capital work in progress (construction-in-progress) to fixed assets accounts
- assets associated with the acquisition of companies
- property developed for sale and machinery or equipment acquired for sale (inventory).
How to Treat Leases
Include:
- assets acquired as a lessee through either a capital or financial lease;
- assets acquired for lease to others as an operating lease.
Exclude:
- operating leases acquired as a lessee and capitalized to right-of-use assets in accordance with IFRS 16 (International Financial Reporting Standards)
- assets acquired for lease to others, either as a capital or financial lease.
Industry characteristics
Report the value of the projects expected to be put in place during the year. Include the gross expenditures (including subsidies) on fixed assets for use in the operations of your organization or for lease or rent to others. Include all capital costs such as feasibility studies, architectural, legal, installation and engineering fees as well as work done by your own labour force. Include all additions to work in progress.
New Assets, Renovation, Retrofit, includes both existing assets being upgraded and acquisitions of new assets.
Purchase of Used Canadian Assets
Definition: Used fixed assets may be defined as existing buildings, structures or machinery and equipment which have been previously used by another organization in Canada that you have acquired during the time period being reported on this questionnaire.
Explanation: The objective of our survey is to measure gross annual new acquisitions to fixed assets separately from the acquisition of gross annual used fixed assets in the Canadian economy as a whole.
Hence, the acquisition of a used fixed Canadian asset should be reported separately since such acquisitions would not change the aggregates of our domestic inventory of fixed assets, it would simply mean a transfer of assets within Canada from one organization to another.
Imports of used assets, on the other hand, should be included with the new assets (Column 1) because they are newly acquired for the Canadian economy.
Work in Progress
Work in progress represents accumulated costs since the start of capital projects which are intended to be capitalized upon completion.
Land
Capital expenditures for land should include all costs associated with the purchase of the land that are not amortized or depreciated.
Residential Construction
Report the value of residential structures including the housing portion of multi-purpose projects and of townsites.
Exclude:
- buildings that have accommodation units without self-contained or exclusive use of bathroom and kitchen facilities (e.g., some student and senior citizen residences)
- the non-residential portion of multi-purpose projects and of townsites
- associated expenditures on services
The exclusions should be included in the appropriate construction (e.g., non-residential) asset.
Non-Residential Building Construction (excluding land purchase and residential construction)
Building construction represents any permanent structure with walls and a roof affording protection and shelter from and for a social and/or physical environment for people and/or materials.
For example, building construction represents expenditures on aircraft hangars, factories, hospitals, hotels, office buildings, railway stations, schools and shopping centres.
Report the total cost incurred during the year of building construction (contract and by own employees) whether for your own use or rent to others.
Include also:
- the cost of demolition of buildings, land servicing and of site-preparation
- leasehold and land improvements
- all preconstruction planning and design costs such as engineer and consulting fees and any materials supplied to construction contractors for installation, etc.
- townsite facilities, such as streets, sewers, stores, schools.
Non-residential engineering construction
Engineering construction encompasses the direct or indirect conveyance of people, machinery, materials, gases, and/or electrical impulses. It also includes free standing structures which contain or restrain such objects either as part of such conveyance or separately and independently.
In addition, the cost associated with significantly altering any terrain in the preparation for specialized use of that terrain will fall under engineering construction.
Report the total cost incurred during the year of engineering construction (contract and by own employees) whether for your own use or rent to others. Include also:
- the cost of demolition of buildings, land servicing and of site-preparation
- leasehold and land improvements
- all preconstruction planning and design costs such as engineer and consulting fees and any materials supplied to construction contractors for installation, etc.
- oil or gas pipelines, including pipe and installation costs
- communication engineering, including transmission support structures, cables and lines, etc.
- electric power engineering, including wind and solar plants, nuclear production plants, power distribution networks, etc.
Machinery and Equipment
Report total cost incurred during the year of all new machinery, whether for your own use or for lease or rent to others. Any capitalized tooling should also be included. Include progress payments paid out before delivery in the year in which such payments are made. Receipts from the sale of your own fixed assets or allowance for scrap or trade-in should not be deducted from your total capital expenditures. Any balance owing or holdbacks should be reported in the year the cost is incurred.
Include:
- automobiles, trucks, professional and scientific equipment, office and store furniture and appliances
- computers (hardware and software), broadcasting, telecommunication and other information and communication technology equipment
- motors, generators, transformers
- any capitalized tooling expenses
- progress payments paid out before delivery in the year in which such payments are made
- any balance owing or holdbacks should be reported in the year the cost is incurred
- leasehold improvements.
Software
Capital expenditures for software should include all costs associated with the purchase or development of software.
Include:
- Pre-packaged software
- Custom software developed in-house/own account
- Custom software design and development, contracted out
Research and Development
Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.
For an activity to be an R&D activity, it must satisfy five core criteria:
- To be aimed at new findings (novel);
- To be based on original, not obvious, concepts and hypothesis (creative);
- To be uncertain about the final outcome (uncertainty);
- To be planned and budgeted (systematic);
- To lead to results to could be possibly reproduced (transferable/ or reproducible).
The term R&D covers three types of activity: basic research, applied research and experimental development. Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view. Applied research is original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific, practical aim or objective. Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.