Capital expenditure - wikipedia Capital expenditure This article has multiple issues. Please help improve it or discuss these issues on the talk page. ( Learn how and when to remove these template messages ) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. ( September 2009 ) The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate. ( December 2010 ) `` Capex '' redirects here. For other uses, see Capex ( disambiguation ). Accounting Historical cost Constant purchasing power Management Tax Major types Auditing Cost Forensic Financial Fund Governmental Management Social Tax Key concepts Accounting period Accrual Constant purchasing power Economic entity Fair value Going concern Historical cost Matching principle Materiality Revenue recognition Unit of account Selected accounts Assets Cash Cost of goods sold Depreciation / Amortization Equity Expenses Goodwill Liabilities Profit Revenue Accounting standards Generally - accepted principles Generally - accepted auditing standards Convergence International Financial Reporting Standards International Standards on Auditing Management Accounting Principles Financial statements Annual report Balance sheet Cash - flow Equity Income Management discussion Notes to the financial statements Bookkeeping Bank reconciliation Debits and credits Double - entry system FIFO and LIFO Journal Ledger / General ledger T accounts Trial balance Auditing Financial Internal Firms Report People and organizations Accountants Accounting organizations Luca Pacioli Development History Research Positive accounting Sarbanes -- Oxley Act Business portal Capital expenditure or capital expense ( capex ) is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof. Contents 1 Usage 2 Accounting rules 3 See also 4 References Usage Capital expenditures are the funds used to acquire or upgrade a company 's fixed assets, such as expenditures towards property, plant, or equipment ( PP&E ). In the case when a capital expenditure constitutes a major financial decision for a company, the expenditure must be formalized at an annual shareholders meeting or a special meeting of the Board of Directors. In accounting, a capital expenditure is added to an asset account, thus increasing the asset 's basis ( the cost or value of an asset adjusted for tax purposes ). capex is commonly found on the cash flow statement under `` Investment in Plant, Property, and Equipment '' or something similar in the Investing subsection. Accounting rules For tax purposes, capex is a cost that can not be deducted in the year in which it is paid or incurred and must be capitalized. The general rule is that if the acquired property 's useful life is longer than the taxable year, then the cost must be capitalized. The capital expenditure costs are then amortized or depreciated over the life of the asset in question. Further to the above, capex creates or adds basis to the asset or property, which once adjusted, will determine tax liability in the event of sale or transfer. In the US, Internal Revenue Code § § 263 and 263A deal extensively with capitalization requirements and exceptions. Included in capital expenditures are amounts spent on : acquiring fixed, and in some cases, intangible assets repairing an existing asset so as to improve its useful life upgrading an existing asset if it results in a superior fixture preparing an asset to be used in business restoring property or adapting it to a new or different use starting or acquiring a new business An ongoing question for the accounting of any company is whether certain costs incurred should be capitalized or expensed. Costs which are expensed in a particular month simply appear on the financial statement as a cost incurred that month. Costs that are capitalized, however, are amortized or depreciated over multiple years. Capitalized expenditures show up on the balance sheet. Most ordinary business costs are either expensable or capitalizable, but some costs could be treated either way, according to the preference of the company. Capitalized interest if applicable is also spread out over the life of the asset. The counterpart of capital expenditure is operating expense or operational cost ( opex ). See also Operating expense ( operational expenditure, opex ) Total cost of ownership ( TCO ) Contract management software Capital cost Cash flow statement Income statement Balance sheet Expenses versus Capital Expenditures, tax terminology in the US. References Jump up ^ `` capital expenditure ( capex ) ''. BusinessDictionary. Retrieved 11 July 2017. Jump up ^ `` What is a Capital Expenditure ( CAPEX ) ? ''. My Accounting Course. Retrieved 11 July 2017. ^ Jump up to : Hayes, Adam ( 18 November 2003 ). `` Capital Expenditure ( capex ) ''. Investopedia. Retrieved 11 July 2017. Jump up ^ Donaldson, Samuel A. Federal Income Taxation Of Individuals : Cases, Problems and Materials ( 2nd ed. ). St. Paul : Thomson West, 2007. pg. 173 Retrieved from `` https://en.wikipedia.org/w/index.php?title=Capital_expenditure&oldid=814144293 '' Categories : Financial capital Accounting terminology Capital budgeting Fixed asset Hidden categories : Articles needing additional references from September 2009 All articles needing additional references Articles with limited geographic scope from December 2010 USA - centric Articles with multiple maintenance issues Talk Contents About Wikipedia Български Čeština Deutsch Español فارسی 한국어 Հայերեն Italiano עברית मराठी Nederlands Polski Português Русский Simple English Svenska Українська 中文 Edit links This page was last edited on 7 December 2017, at 03 : 20. About Wikipedia

Question: where does capex go on the balance sheet
Answer: cash flow statement under "Investment in Plant, Property, and Equipment" or something similar in the Investing subsection