what is cap ex

Capital expenditure, or CapEx, refers to the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. CapEx is different from operating expenses (OpEx), which are shorter-term expenses used for the day-to-day operations of a business, such as employee salaries, rent, utilities, and property taxes. The difference between CapEx and OpEx may not be immediately obvious for some expenses; for instance, repaving the parking lot may be thought of as inherent to the operation of a shopping mall. 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 dictate that a capital expenditure is added to an asset account, thus increasing the assets basis (the cost or value of an asset adjusted for tax purposes) .