An acronym for Capital Expenses, CapEx refers to business costs associated with acquiring, developing or upgrading physical assets such as hardware systems or intangible assets like patents and other intellectual property.
Capital expenditures stand in contrast to operating expenditures, or OpEx, which are the ongoing costs associated with the daily operations of business products, services and/or systems.
CapEx from an Accounting Perspective
From an accounting perspective, CapEx or capital expenditures refer to business costs allocated to creating future benefits, such as acquiring new fixed assets or upgrading existing ones.
The monetary benefits from CapEx costs are expected to extend beyond the current tax year, and as a result, CapEx costs typically need to be accounted for on income statements with depreciation (tangible assets) or amortization (intangible assets such as patents or other intellectual property) factored into the equation.
Stay up to date on the latest developments in Internet terminology with a free weekly newsletter from Webopedia. Join to subscribe now.
Webopedia's student apps roundup will help you to better organize your class schedule and stay on top of assignments and homework. Read More »List of Free Shorten URL Services
A URL shortener is a way to make a long Web address shorter. Try this list of free services. Read More »Top 10 Tech Terms of 2015
The most popular Webopedia definitions of 2015. Read More »
The Open System Interconnection (OSI) model defines a networking framework to implement protocols in seven layers. Use this handy guide to compare... Read More »Computer Architecture Study Guide
This Webopedia study guide describes the different parts of a computer system and their relations. Read More »What Are Network Topologies?
Network Topology refers to layout of a network. How different nodes in a network are connected to each other and how they communicate is... Read More »