Compare CAPEX and OPEX.

The major differences between CAPEX and OPEX are as follows −

CAPEX

• Benefits organization more than one year.

• Also called as capital expenditure, capital expense.

• One-time purchase.

• Long term tenure.

• They are depreciated or amortized over the time.

• Listed as property or equipment.

• Earns profits slowly/gradually.

• Lending institutions act as source of finance.

• CAPEX comes in balance sheet.

• Examples − buying of fixed assets, expansion of buildings, purchasing vehicles etc.

OPEX

• Ongoing expenses to run day to day operations.

• Also called as operating expenses, operating expenditure, revenue expenditure.

• Pay as you go.

• Relatively shorter term tenure.

• Fully deducted in the accounting period in which they were incurred.

• Listed as operating cost.

• Earned profits for shorter time.

• Personal saving act as source of finance.

• OPEX comes in income statement.

• Examples − license fees, legal fees, insurance fees, salary and wages etc.