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Banking Term: Capital Expenditure

Jun 4, 2015 14:30 IST

    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.

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