A Capital Expense is any expenditure made by a business to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. These expenses are typically substantial and offer a long-term benefit.
Capital formation refers to the creation or expansion of capital through savings, which are then invested in buildings, machinery, equipment, and other assets that produce goods and services, thereby contributing to economic growth.
A Capital Investment Budget outlines the funds allocated for significant investments in a company's long-term assets, such as property, plants, and equipment. These investments are typically intended to enhance a company's operational capacity, efficiency, and overall profitability.
Machines or major tools necessary to complete a given task. Equipment must be capitalized and written off over the appropriate depreciable life.
Fixed Capital refers to the amount of an organization's capital that is invested in its fixed assets, such as buildings, machinery, and equipment, which are essential for ongoing operations and production.
Furniture, fixtures, and equipment (FF&E) are movable assets essential to the operation of a business, often found in hospitality industries such as hotels and motels. These items typically wear out faster than other properties, necessitating detailed management of their condition, cost, and replacement frequency.
Plant assets, also known as fixed assets, are composed of land, buildings, machinery, furniture, fixtures, and other equipment permanently employed in business operations. In some contexts, the term 'plant' may refer specifically to buildings or land and buildings.
Producer goods, also known as intermediate or capital goods, are newer machinery and equipment bought for business use. These are durable goods used in business production to assist in the production of consumer goods and services.
