Proposed Changes For The 2009 Be-10 Benchmark Survey

PROPOSED CHANGES FOR THE 2009 BE-10 BENCHMARK SURVEY
OF U.S. DIRECT INVESTMENT ABROAD

The proposed changes to the benchmark survey include 1) changes in survey form design and
reporting criteria to simplify the survey forms and improve response rates, and 2) modifications,
deletions and additions of specific items on the survey forms. While some items have been
combined, items that are most useful to data users will continue to be collected separately. Some
items Bureau of Economic Analysis (BEA) is proposing to no longer collect have been difficult
for companies to report and the quality of the reported data has proven to be unreliable. Other
items noted for deletion include items now collected on BEA’s surveys of international services.
The changes are discussed below.
1. Changes in survey form design and reporting criteria
A. To simplify reporting on the 2009 BE-10 benchmark survey, BEA is proposing to
discontinue the use of separate forms for banks. For 2009, bank and nonbank U.S.
Reporters would file Form BE-10A. A U.S. Reporter that is not a bank, but owns a
majority interest in a U.S. bank, would fully consolidate its banking activities; that is,
it would report all domestic operations on a fully consolidated basis. The 2004
benchmark survey Form BE-10A BANK would be discontinued. Similarly, Form
BE-10B BANK, report for foreign affiliates that are banks, would be discontinued.
All foreign affiliates, regardless of industry, would be filed on one of the foreign
affiliate forms listed below:
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ƒ

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Form BE-10B—report for majority-owned foreign affiliates with total
assets, sales or gross operating revenues, or net income greater than $80
million, positive or negative—affiliates with assets, sales, or net income
greater than $300 million, positive or negative, would file additional
items;
Form BE-10C—report for (a) majority-owned foreign affiliates with total
assets, sales or gross operating revenues, or net income greater than $25
million, positive or negative, but for which no one of these items is
greater than $80 million, positive or negative, and (b) minority-owned
foreign affiliates with total assets, sales or gross operating revenues, or
net income greater than $25 million, positive or negative; or
Form BE-10D—schedule for foreign affiliates with total assets, sales or
gross operating revenues, and net income less than or equal to $25
million, positive or negative.

B. Changes to the report forms are discussed in more detail below:
ƒ Form BE-10A exemption level for reporting only selected items would
increase from $150 million to $300 million. In addition to certain
identification items, U.S. Reporters with total assets, sales or gross
operating revenues, or net income less than or equal to $300 million,

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positive or negative, would report only the following items on the BE10A report: total assets, total liabilities, sales or gross operating revenues,
net income (loss), and exports and imports. Of the roughly 3,500 U.S.
Reporters that are expected to report Form BE-10A in the benchmark
survey, BEA estimates 1,500 will be below and 2,000 will be above the
$300 million level. U.S. Reporters that are banks are generally large and
would file a complete BE-10A report.
ƒ

Form BE-10B would replace 2004 benchmark survey Forms BE-10B(LF)
and BE-10B(SF) for reporting large majority-owned foreign affiliates.
BEA proposes a threshold of $80 million for reporting on the BE-10B
form. A complete Form BE-10B would be required to be filed for
majority-owned foreign affiliates with total assets, sales or gross
operating revenues, or net income greater than $300 million, positive or
negative. For majority-owned foreign affiliates with assets, sales, and net
income between $80 million and $300 million, fewer items would be
required to be reported. Of the roughly 12,800 majority-owned foreign
affiliates that are expected to be reported on a BE-10B form in the
benchmark survey, BEA estimates that 6,800 will be below and 6,000
will be above the $300 million level.

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Form BE-10C would replace 2004 benchmark survey Form BE-10B Mini
for reporting small majority- and minority-owned foreign affiliates and
Form BE-10B(SF) for reporting large minority-owned foreign affiliates.
BEA proposes a threshold of $25 million for reporting on the BE-10C
form. About 1,700 minority-owned foreign affiliates with total assets,
sales or gross operating revenues, or net income greater than $25 million,
positive or negative, and about 8,000 majority-owned foreign affiliates
with total assets, sales or gross operating revenues, or net income greater
than $25 million, positive or negative, but for which no one of these items
is greater than $80 million, positive or negative, are expected to be
reported on Form BE-10C.

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Form BE-10D would replace the 2004 BE-10A Supplement A schedule
for reporting the smallest majority- and minority-owned foreign affiliates.
About 22,000 minority-owned and majority-owned foreign affiliates with
total assets, sales or gross operating revenues, and net income less than or
equal to $25 million, positive or negative, are expected to be reported on
Form BE-10D. A U.S. Reporter would submit one or more pages of the
form depending on the number of affiliates that are required to be filed on
Form BE-10D.

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C. Comparison of 2004 and 2009 reporting thresholds by form (thresholds are based on
value of assets, sales, and net income, positive and negative).
Form for
2004
BE-10A

BE-10A BANK
BE-10B (LF)
BE-10B (SF)

Reporting threshold
2004
U.S. Reporters
Non-bank
(abbreviated form for
reporters under $150 million)
U.S. Reporters
Bank
$150 million
majority-owned affiliates
$25 million
minority-owned and
majority-owned affiliates

Form for
2009

Reporting threshold
2009

BE-10A

U.S. Reporters
(abbreviated form for
reporters under $300
million)

bank affiliates

BE-10B/C/D

BE-10B BANK
BE-10B Mini

BE-10A
Supplement A

$10 million
minority-owned and
majority-owned affiliates
under $10 million
minority-owned and
majority-owned affiliates

BE-10B

BE-10C

BE-10D
(schedule)

$80 million
majority-owned
affiliates
(additional items for
affiliates over $300
million)
select form according to
size of affiliate
$25 million
minority-owned and
majority-owned affiliates
under $25 million
minority-owned and
majority-owned affiliates

2. Changes in data collected
A. Modifications
1) Balance sheet items (Affiliate) - other current receivables, allowance for
doubtful accounts, other current assets, equity investments in other foreign
affiliates using cost method, other equity investments, other noncurrent assets,
current liabilities and long-term debt, other noncurrent liabilities will no
longer be collected as separate items 1
ƒ Cash; current trade accounts and trade receivables; inventories; land;
property, plant, and equipment; accumulated depreciation; equity
investment in other foreign affiliates; other assets; total assets; current
trade accounts and trade payables; other liabilities; and total liabilities
will continue to be collected

1

The original proposal sent to selected data users and respondents for comment indicated that BEA would no longer
collect cash, current trade accounts and trade receivables, and trade accounts and trade payables. In response to
comments BEA received, it will continue to collect these items.

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2) Balance sheet items (U.S. Reporter) - other current assets, noncurrent
receivables, other noncurrent assets, other current liabilities and long-term
debt, other noncurrent liabilities will no longer be collected as separate items 2
ƒ Cash; current receivables; inventories; net property, plant, and equipment;
equity investment in unconsolidated U.S. enterprises; equity investments
in foreign affiliates; other assets; total assets; trade accounts and trade
notes payable; other liabilities; and total liabilities will continue to be
collected
3) U.S. exports of “capital equipment and other goods charged to fixed asset
accounts” will be combined with the “other” export line (Affiliate)
ƒ U.S. exports of “goods intended for further processing, assembly, or
manufacture” and “goods for resale without further processing, assembly,
or manufacture” will continue to be collected
4) Derivatives will no longer be included in the debt balances between the U.S.
Reporter and their foreign affiliates (Affiliate)
ƒ An instruction will be added to direct reporters to exclude derivatives
when reporting intercompany debt balances to avoid duplication of data
collected on the Treasury International Capital Form D. Derivatives have
been excluded from the quarterly BE-577 companion survey.
5) Liabilities owed to and receivables due from the U.S. Reporter according to
the books of the U.S. Reporter (Affiliate) - timing differences between the
data according to the books of the U.S. Reporter and the data according to the
books of foreign affiliate are no longer significant
ƒ Liabilities owed to and receivables due from the U.S. Reporter according
to the books of the foreign affiliate will continue to be collected
6) The breakdown of total employee compensation between wages and salaries
and employee benefit plans (U.S. Reporter, Affiliate) - total compensation is
generally the item used to compare wage data by country. Definitions of the
components of wages and salaries and employee benefit plans are not uniform
across countries and are often not uniform for all industries within a country.
ƒ Total compensation will continue to be collected
B. Deletions
1) Wholesale and retail trade items: cost of goods purchased for resale and
inventory of goods purchased for resale (U.S. Reporter, Affiliate)
2) The breakdown of number of employees and employee compensation by
occupational classification (U.S. Reporter, Affiliate)
3) Number of equity shares and price per share (Affiliate)
4) Number of employees who are U.S. citizens (Affiliate)
5) Subsidies received (Affiliate)
2

The original proposal sent to selected data users and respondents for comment indicated that BEA would no longer
collect cash, current receivables and current trade accounts and trade payables. In response to comments BEA
received, it will continue to collect these items.

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6) Composition of external finances (Affiliate) - a review of direct investment
literature revealed little use of these data collected on past benchmark surveys.
Payables and receivables of foreign affiliates with persons other than the U.S.
Reporter are frequently reported by more than one affiliate in the foreign
ownership chain and therefore cannot be used to analyze the source of foreign
affiliate financing.
ƒ Foreign affiliate payables and receivables with the U.S. Reporter will
continue to be collected on the benchmark survey in Part III, Investment
and Transactions Between the U.S. Reporter and the Foreign Affiliate.
The following items - 7), 8), and 9) are now collected on BEA’s surveys of
international services
7) Receipts [payments] by U.S. Reporter from [to] foreign affiliate for:
- Royalties, license fees, and other fees for the use of intangible property
(Affiliate)
- Charges for use of tangible property (including film and television tape
rentals) (Affiliate)
- Allocated expenses and sales of services (total and by type of service)
(Affiliate)
8) Receipts from and payments to U.S. persons other than the U.S. Reporter for
royalties, license fees, and other fees for the use, sale, or purchase of
intangible property (Affiliate)
ƒ Royalties, license fees, and other fees received from or paid to other
foreign affiliates of the U.S. Reporter or other foreign persons will
continue to be collected
9) Receipts from and payments to foreign persons other than the U.S. Reporter’s
foreign affiliates for royalties, license fees, and other fees for the use, sale, or
purchase of intangible property (U.S. Reporter)
.
C. Additions
1) Ireland and Belgium will be added to the preprinted country listings since
there is a significant number of forms received for affiliates in these countries
(Affiliate)
2) A question will be added asking if the foreign affiliate has equity in its U.S.
parent company (reverse investment). An item will be added to collect voting
percent and dollar amount of the investment. (Affiliate)
3) A question will be added to determine if the U.S. Reporter is a bank. Note: a
"bank" is a business entity engaged in deposit banking or closely related
functions, including commercial banks, Edge Act corporations, foreign
branches and agencies of U.S. banks whether or not they accept deposits
abroad, savings and loans, bank holding companies, and financial holding
companies under the Gramm-Leach-Bliley Act.” (U.S. Reporter)

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D. Other changes
1) The reporter’s primary basis of inventory valuation will no longer be
collected (NIWD no longer uses these data) (U.S. Reporter)
2) A question will be added asking for permission to communicate with the
reporter by fax (U.S. Reporter)
3) The instruction for ‘certain gains (losses)’ will be expanded to include
“Change in accounting estimate of provision for expected stock option
forfeitures under the inception method as defined by FAS 123(R) (Sharebased Payment)” (U.S. Reporter, Affiliate)
4) The instructions will be changed to reference the ‘Guide to Industry
Classifications for International Surveys, 2007’
5) The instruction for partnerships in the Instruction booklet will be expanded to
read as follows:
Partnerships – Most partnerships are either general or limited partnerships.
The determination of percentage of voting interest in a general or limited
partnership is based on who controls the partnership. The percentage of
voting interest is NOT based on the percentage of ownership in the
partnerships’ equity.
A general partnership usually consists of at least two general partners who
together control the partnership. Unless a clause to the contrary is contained
in the partnership agreement a general partnership is presumed to be
controlled equally by each of the general partners.
A limited partnership usually consists of at least one general partner and
one or more limited partners. The general partner usually controls a limited
partnership, and therefore, has 100 percent voting interest in the limited
partnership. The limited partner(s) has a financial interest but does not
usually have any voting rights (control) in a limited partnership. Therefore,
unless a clause to the contrary is contained in the partnership agreement,
limited partners are presumed to have zero voting interest in a partnership.