Banking Term: Capital Expenditure
- Capital expenditure is a purchase of fixed assets (eg. Plant and equipment), expenditure on Trade Investment or acquisitions of other businesses and expenditure on current assets (eg. Stock).
- It differs from capital formation
- It is an amount spent to acquire or improve a long-term asset such as equipment or buildings.
- The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset.