ACCOUNTING GLOSSARY
CapEx
Capital Expenditure
Money spent to acquire or improve long-lived assets.
What does CapEx mean?
Money spent to acquire or improve long-lived assets. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
CapEx in context
Replacing a building's roof for $180,000 is commonly treated as CapEx.
Why it matters in financing
CapEx can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.