Capital Expenditure (CAPEX or Capital spending)

In its wide definition, CAPEX are expenses aimed at generating some benefits for the future. Value for money of this kind of spending is expressed either through acquiring property, equipments or industrial premises (fixed/ physical assets), or through adding value to a fixed asset that a business already owns. In accounting CAPEX are costs that are not subject of deduction during the year of their purchase. This kind of expenses are meant to be capitalized with time into larger portions revenue. Unlike business operational expenses, CAPEX are subjected to amortization and depreciation in the account booking of a company that has incurred for them.