Capital Expenditure

Capital expenditure consist of those expenditures, the benefit of which is carried over to several accounting periods. In other words the benefit of which is not consumed within one accounting period. It is non-recurring in nature.

Characteristics
In other words, it refers to the expenditure, which may be

i. purchase of a fixed asset.

ii. not acquired for sale.

iii. it is non-recurring in nature.

iv. incurred to increase the operational efficiency of the business concern.

Examples

i. Expenses incurred in the acquisition of Land, Building, Machinery, Furniture, Car, Goodwill, Copyright, Trade Mark, Patent Right, etc.

ii. Expenses incurred for increasing the seating accommodation in a cinema hall.

iii. Expenses incurred for installation of fixed assets like wages paid for installing a plant.

iv. Expenses incurred for remodelling and reconditioning an existing asset like remodeling a building.