capital expenditure (CapEx)

This is the funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technolog. These expenditures are capitalized on the balance sheet because they are considered an investment by a company in expanding its business. However, not all expenses are capitalized. If the benefit is less than a year, it must be expensed directly on the income statement. If the benefit is greater than one year, it must be capitalized as an asset on the balance sheet.