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capital expenditureexpenditure on the acquisition or improvement of FIXED ASSETS that is subsequently written off against profits over several ACCOUNTING PERIODS. Contrast with REVENUE EXPENDITURE. See INVESTMENT, CAPITAL BUDGETING.
capital expendituresee INVESTMENT.
Money spent on capital improvements,being those that change the nature of property, extend its useful life, or otherwise improve it beyond the natural improvement to be expected with routine repairs and maintenance.This is an important concept because capital expenditures must be added to the basis and depreciated slowly over time,while noncapital expenditures for repairs may be deducted entirely in the current year on one's taxes.