Capital expenditure is money spent on items that will last longer than one year, such as computers, furniture, office equipment, cars, land, and buildings.
In accounting terms, capital expenditure is treated differently from operating expenditure. In a budget, the cost of capital expenditure is spread over the expected life of the asset. Allocating the whole cost of a capital item to one year’s accounts would give a distorted view of profit and loss, so a depreciation charge for that item is recorded each year instead.
