Capital addition

A capital addition is any investment that improves upon an existing fixed asset or adds a new fixed asset. In essence, capital additions increase the fixed asset base of an organization. Capital additions that involve existing assets must either extend the useful life of an asset or increase its capacity; otherwise, these expenditures are really just maintenance expenditures that are charged to expense as incurred.

Related Courses

Capital Budgeting 
Fixed Asset Accounting 
How to Audit Fixed Assets