Preparing a Capital Budget


IN ADDITION TO preparing operating budgets for your department or unit, you may need to prepare capital budgets. Let’s now examine this type of budget more carefully and consider strategies for preparing one.

What is a capital budget?

A capital budget is a schedule that shows planned investments in property, equipment, improvements, and other capital assets over a period of time. These outlays are different from ordinary day-to-day expenses in that they can be capitalized under accepted accounting practices. Instead of having to record the entire expense as a deduction from income in one accounting period, you can spread ...

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