it results in a superior fixture preparing an asset to be used in business restoring property or adapting it to a new or different use starting or acquiring a new business An ongoing question for the accounting of any company is whether certain costs incurred should be capitalized or expensed. Costs which are expensed in a particular month simply appear on the financial statement as a cost incurred that month. Costs that are capitalized, however, are amortized or depreciated over multiple years. Capitalized expenditures show up on the balance sheet. Most ordinary business costs are either expensable or capitalizable, but some costs could be treated either way, according to the preference of the company. Capitalized interest if applicable is also spread out over the life of the asset. Sometimes an organization needs to apply for a line of credit to build another asset, it can capitalize the related interest cost. Accounting Rules spreads out a couple of stipulations for capitalizing interest cost. Organizations can possibly capitalize the interest given that they are building the asset themselves; they can't capitalize interest on an advance to buy the asset or pay another person to develop it. Organizations can just perceive interest cost as they acquire costs to develop the asset. The counterpart of capital expenditure is operating expense or operational cost (opex). See also Operating expense (operational expenditure, opex) Total cost of ownership (TCO) Contract management software Capital cost Cash flow statement Income statement Balance sheet Expenses versus capital expenditures References Financial capital Accounting terminology Capital budgeting Fixed asset