Capital expenditures are monies used by a company or organization to acquire, improve, or maintain long-term assets in order to improve the company or organization's efficiency and capacity. Long-term assets are typically physical, fixed, and non-consumable assets that have a useful life of more than one accounting period, such as property, equipment, or infrastructure.
Purchases of new equipment, machinery, land, plant, buildings, or warehouses, furniture and fixtures, business vehicles, software, or intangible assets such as a patent or license are examples of capital expenditures.
In government accounting and/or public finance, the money spent by the government on the development of machinery, equipment, buildings, medical centers, education, and so on is also referred to as capital expenditure. It also includes the costs of procuring fixed assets such as land, as well as government investments that will yield profits or dividends in the long term.
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