|WikiProject Business||(Rated Stub-class, High-importance)|
Describing the verb this way helped me, "Capitalize: An account redefinition (on the balance sheet) where money is subtracted from 1 account (expense) and added to another (asset), thus redefining the worth of the asset (and naturally, the expense account as well)." Maggieboyle.wright (talk) 01:41, 1 March 2011 (UTC) To capitalize an expenditure means to record it as an asset. Although expenditures that have been recorded as expenses may be reclassified as assets (depending on the circumstances), the definition proposed above is incorrect because it is too narrow a definition. This definition has been promulgated by ITIL. Presumably, ITIL and this proposed definition are referring to the process by which internally developed software is recorded as an asset, whereby payroll and certain other expenses are reclassified.
A capital expenditure is simply an expenditure that is approved under a capital budget (as opposed to under an operating budget). Capital expenditures are a function of which type of budget authorizes the expenditure, not what the expenditure is for (i.e. an asset or an expense).
The existing explanation of capital expenditure is inaccurate. An expenditure (the EX in CAPEX) does not itself provided benefits of any description. Whatever it is that is purchased provides benefits. Thus, it does not make any sense to state that a capital expenditure provides benefits for multiple years. Furthermore, capital projects may involve expenditures that are capitalized (i.e. recorded as assets) or that are expensed (i.e. are shown at full cost on the income statement for the period). Maggieboyle.wright (talk) 01:41, 1 March 2011 (UTC)
Can anyone explain the difference between this article and Capital cost? I would have thought both are the same, but the latter might be a bit clearer (if going into detail less). Thanks for your thoughts! —Preceding unsigned comment added by 126.96.36.199 (talk) 18:33, 10 April 2010 (UTC)
The article states that the words expense and expenditure are synonymous. They are not. They have very different meanings. — Preceding unsigned comment added by Hdawson1943 (talk • contribs) 15:15, 28 February 2019 (UTC)
selling a spouse as noncapital?Edit
This is about improving another article, but needs expertise on capital expenditure.
Inflation adjustments are applied to monetary amounts for English sales of wives of centuries ago. The Inflation template does not apply to capital expenses. Since these sales are often or typically functionally divorces, rather than sales of stock to pimps for prostitution, these appear to be capital expenses or capital purchases. However, a counterargument is that the prices were artificially depressed by the selling husbands to signify to their communities that they were divorcing women whom they considered almost or actually worthless (some so-called sales were for free or a glass of ale). Unfortunately, we can't know whether that counterargument applied in every case for which an inflation-adjusted equivalent value is being given in the article. Further, one could countercounterargue that the low value was not artificially low but accurately reflected the economic value to the selling husband of the wife, since she might have been unwilling to help him but glad to help another man whom she had in mind, and that would correlate with the divorce happening. Is the expense that is attached to a wife sale (even when not due to prostitution or pimping) sometimes not a capital expense?
- This discussion has moved to the WikiProject Economics talk page topic/section Selling a Spouse as Noncapital?, so any responses should go there. Nick Levinson (talk) 17:04, 4 August 2012 (UTC)