The 30-70 Rule. If you own less than 30% of an entity then you must expense cash infusions to that entity. If you own more than 70% of an entity then you must consolidate the financial statements of that entity into your corporate results (i.e., cash infusions again show up as an expense). In between these percentages you treat cash infusions into the external entity just like an investment in the NYSE or NASDAQ. It's an asset (a debit) and not an expense (a debit). Cash infusions are merely reflected as a credit to the cash column and a debit to the investment column. R&D expenditures in an entity that falls within the 30-70 range do not impact the Profit & Loss statement, and mostly do not affect the rating of the balance sheet. Note: percentages are illustrative and other elements of managerial control over the investment can affect whether or not it is expensed or treated as an investment.