Capital Expenditure Legal Meaning and Definition

Here is a simplified definition of the legal term Capital Expenditure.

Capital Expenditure (n)

Capital Expenditure, often shortened to CapEx, refers to the money spent by a business or organization for acquiring or improving long-term assets, such as equipment, buildings, or land. This expenditure is considered an investment that is expected to generate benefits for the business over a long period of time. For example, if a business used its funds to construct a road to the factory premises, it would be considered a Capital Expenditure because this road will be beneficial to the business for many years.