Capital expenditure or CAPEX is an expenditure that incurred when company buys new or invest in already existing property, plant and equipment with a useful life extending beyond the taxable year.

In accounting, CAPEX is capitalized, which means that it is added to company’s Assets. Then this new asset value (capex cost) is depreciated over asset useful life period.

CAPEX could be found on company’s cash flow statement.

This type of expenditures is made by companies to maintain or increase the scale of their business.

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