An acronym for Operating Expenses, OpEx refers to the ongoing costs associated with the daily operations of business products, services and/or systems.
Operational expenditures stand in contrast to capital expenditures, or CapEx, which are the costs associated with acquiring, developing or upgrading physical assets such as hardware systems or intangible assets like patents and other intellectual property.
OpEx from an Accounting Perspective
From an accounting perspective, OpEx or operational expenditures refer to business costs needed to ensure the daily operations of the business, such as wages and other administrative costs, utilities and maintenance.
OpEx costs are fully deducted on income statements in a given accounting period, whereas CapEx costs need to be capitalized (depreciated or amortized) over the expected life of the asset.
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