Capital expenditure
Financial Accounting glossary · Assets: Cash, Receivables, Inventory, PP&E & Intangibles
Definition
Outlay to acquire or improve a long-lived asset, capitalized rather than expensed.
Capital expenditure in plain English
A capital expenditure (often "CapEx") is money spent to buy or upgrade something big that will help the business for years, like machinery, a building, or a delivery truck. Because you get value from it for a long time, accounting doesn't count the whole cost as an expense the moment you pay — instead you "capitalize" it (record it as an asset) and spread the cost out over the years you use it. Compare buying a pizza (gone today, expense today) versus buying an oven (used for years, so its cost is spread out) — the oven is a capital expenditure.
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