Description of table F.229 - Direct Investment

U.S. direct investment abroad is a category of cross-border investment where a U.S. resident has control of or a significant degree of influence on the management of a company abroad. The U.S. resident is considered to have control if he or she owns more than 50 percent of the voting power in the direct investment enterprise. Owning between 10 and 50 percent is considered a significant degree of influence. U.S. investment in a foreign company of less than 10 percent is considered portfolio investment and is counted as a U.S. purchase of foreign corporate equities (shown on tables F.213 and L.213). Equity, reinvested earnings and intercompany accounts detail for U.S. direct investment abroad is also shown. Direct investment debt positions between affiliated enterprises is considered intercompany lending.

Foreign direct investment in the United States is a category of cross-border investment where a foreign resident has control of or a significant degree of influence on the management of a U.S. company. The 10 percent threshold that distinguishes direct investment from portfolio investment for U.S. direct investment abroad also applies to foreign direct investment in the United States. Equity, reinvested earnings and intercompany accounts detail for foreign direct investment in the United States is also shown. Direct investment debt positions between affiliated enterprises is considered intercompany lending.

Direct investment data are shown on a directional basis. The memo section of the direct investment tables presents the data on an asset/liablity basis, an alternative way of presentation featured by the BEA.

Total direct investment levels and flows are reported at current cost. Market-value and historical-cost valuations for levels data are shown in the memo section of table L.229. Sectoral direct investment detail is reported at historical cost, except the nonfinancial corporate business sector which includes the current-cost adjustment.

A forthcoming FEDS Note will have more information about these tables.



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