Capital Expenditure Accounting is a method of accounting that focuses on expenses related to the acquisition or improvement of long-term assets such as buildings, equipment, and land. This type of accounting works in tandem with depreciation accounting, which spread out the cost of an asset over its useful life.
By tracking capital expenditure properly, businesses can ensure they are making smart investments with their resources and accurately budgeting for future expenditures. In addition, it allows companies to make more informed decisions by evaluating the financial impact of alternative investments. Through careful analysis of capital expenditure totals and trends, businesses can protect themselves from potential risks and maximize their returns over time.