Managing capital expenditure
Does it hurt?
Capital spending can be tangible or intangible. It can be on machines that you can touch and feel, or items of intellectual property such as software development and registering patents – stuff that is much harder to physically hurt yourself with.
What’s not capital
Under certain circumstances – especially if software is your business – you can treat software development as capital spending. Mostly, you cannot capitalize spending on research, start-ups, training and advertising, internally generated goodwill, brands, mastheads, publishing titles, customer lists and similar items.
Unlike most current expenditure, capital outlays are expected to produce benefits (and perhaps incur costs) in the future. ...
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