Compare CAPEX and OPEX.

Banking & FinanceManagementCompanies/Organisations

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.

raja
Published on 24-Jul-2020 07:31:04
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