Grants to perform services abroad must be reported in the year that they are accrued if they are from U.S. Government nonmilitary agencies, such as the Agency for International Development and the United States Information Agency, or that are part of an aid or technical cooperation program of the Government with foreign persons. However, do not report services provided to the U.S. Department of Defense or any of its agencies, such as the Army Corp of Engineers.
If you are providing a service other than construction, engineering, or mining on behalf of U.S. Government non-military agency, please report on schedule A of the form the full amount of the contract you accrued on your books for the quarter as a receipt from the country for whom you are providing the service. Then on schedule B of the form please report your foreign payments for services as a payment to the country where those expenses were incurred. For example, if you leased computer equipment in India used in conjunction with the educational and training services you provided there, then report those expenses as a purchase of operational leasing services from India.