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Financial statements
Capex versus opex
Capital expenditure buys an asset that lasts more than a year and is depreciated; operating expenditure is consumed in the period and expensed immediately.
Owned by: AnalystTest band: Analyst
In practice
Capitalising a cost flatters this year's profit and shows up as depreciation for years. Watch what gets capitalised — software development especially.
The kind of thing the test asks
- Which is most clearly capex?
More in financial statements
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