Examples of capital expenditures

A capital expenditure refers to the expenditure of funds for an asset that is expected to provide utility to a business for more than one reporting period. Examples of capital expenditures are as follows:

  • Buildings (including subsequent costs that extend the useful life of a building)

  • Computer equipment

  • Office equipment

  • Furniture and fixtures (including the cost of furniture that is aggregated and treated as a single unit, such as a group of desks)

  • Intangible assets (such as a purchased taxi license or a patent)

  • Land (including the cost of upgrading the land, such as the cost of an irrigation system or a parking lot)

  • Machinery (including the costs required to bring the equipment to its intended location and for its intended use)

  • Software

  • Vehicles

An expenditure is otherwise recorded as an expense if either of the following two rules apply:

  • The expenditure is for an amount less than the designated capitalization limit of a business. The capitalization limit is established to keep a company from wasting time tracking assets that have little value, such as computer keyboards.

  • The expenditure relates to an item that is expected to be fully consumed within the current reporting period.

Related Courses

Capital Budgeting 
Fixed Asset Accounting 
How to Audit Fixed Assets