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The difference between Capex and Opex is:

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Question added by Mohamed Reda , Accounting Supervisor , carriage saudi Limited @ Delivery Hero Company
Date Posted: 2015/05/07
FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

 

 

differences 

 

1- Definition

 

 

-Capex

 Capital expenditures are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing asset with a useful life that extends beyond the tax year.

 

-Opex

OpEx (Operational expenditure) refers to expenses incurred in the course of ordinary business, such as sales, general and administrative expenses (and excluding cost of goods sold - or COGS, taxes, depreciation and interest

 

2-known as

 

-Capex 

Capital Expenditure, Capital Expense

 

-Opex

 

Operating Expense, Operating Expenditure, Revenue Expenditure

 

3- Accounting treatment

 

-Capex

Cannot be fully deducted in the period when they were incurred. Tangible assets are depreciated and intangible assets are amortized over time

 

-Opex

Operating expenses are fully deducted in the accounting period during which they were incurred

 

4-In throughput accounting

 

-Capex

Money spent on inventory falls under capex.

-Opex

The money spent turning inventory into throughput is opex

 

5-In real estate

 

-Capex

Costs incurred for buying the income producing property

 

-Opex

Costs associated with the operation and maintenance of an income producing property

 

 

6-Examples

 

 

-Capex

Buying machinery and other equipment, acquiring intellectual property assets like patents

 

-Opex

Wages, maintenance and repair of machinery, utilities, rent, SG&A expenses

 

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