Car Collector Chronicles - THE FORUM

Aughte · Senior Member

Capex vs Opex: Understanding the Key Differences with Examples

Coomen · Member

Capex is the cost of acquiring or improving a company's core assets, such as buildings, equipment, land, and vehicles. These investments are intended to be used for a long period of time, usually more than one year, and are intended to generate income in the future. Examples of capex & opex include the purchase of new production equipment, the construction of an office building, or the purchase of business process automation software. These costs are usually capitalized, that is, they are reflected in the company's balance sheet as assets and amortized over their useful lives.

Aughte · Senior Member

Opex, in contrast, represents the ongoing operating costs necessary to maintain a company's day-to-day operations. This includes expenses such as employee salaries, rent, utilities, marketing and advertising costs, as well as the cost of raw materials. Opex is an expense that is usually written off in the period in which it was incurred and is reflected in the company's income statement.