Monday, March 31, 2014

#MustHave - Knowledege - OpEx and Capex

Because I do not have business study or background, so I think this is a must for me to study about those items.. TT_TT"



Definition Capital expenditures are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing asset with a useful life that extends beyond the tax year.

OpEx (Operational expenditure) refers to expenses incurred in the course of ordinary business, such as sales, general and administrative expenses (and excluding cost of goods sold - or COGS, taxes, depreciation and interest).

Also known as

Capital Expenditure, Capital Expense

Operating Expense, Operating Expenditure, Revenue Expenditure

Accounting treatment

Cannot be fully deducted in the period when they were incurred. Tangible assets are depreciated and intangible assets are amortized over time.

Operating expenses are fully deducted in the accounting period during which they were incurred.

In throughput accounting

Money spent on inventory falls under capex.

The money spent turning inventory into throughput is opex.

In real estate

Costs incurred for buying the income producing property.

Costs associated with the operation and maintenance of an income producing property.


Buying machinery and other equipment, acquiring intellectual property assets like patents.

Wages, maintenance and repair of machinery, utilities, rent, SG&A expenses

*courtesy of

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