CAPEX & OPEX Expenditure Flashcards
1
Q
What is expenditure?
A
Represents a payment with either cash or credit to purchase goods or services
2
Q
What is capital expenditure?
A
- CAPEX (capital expenditure)
- CAPEX is spent to acquire or improve an asset such as equipment or buildings
3
Q
What is revenue expenditure?
A
- OPEX (revenue expenditure)
- Revenue expenses are costs in the day to day running of the business. E.g. servicing a machine, spare parts etc
4
Q
Why are CAPEX and OPEX budgets split out in business accounts?
A
They have different tax obligations
CAPEX can benefit from capital allowances
