Get CAPITAL AND OPERATING

For O&M spend: the customer will bear the cost of the entire investment in the current year. For capital spend: the utility will borrow money to pay for the capital investment and will repay that money over the lifetime of the asset.

A capital expenditure, or , is money invested by a company to acquire or upgrade fixed, physical or nonconsumable assets. is primarily a one-time investment in nonconsumable assets used to maintain existing levels of operation within a company and to foster its future growth.

Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are typically referred to as ongoing operating expenses, which are short-term expenses that are used in running the daily business operations.

For example, the purchase of a photocopier would be but the purchase of toner and paper are OpEx. and OpEx are treated differently from an income tax standpoint and businesses prefer one to the other based on various reasons. There's a clear distinction between the two–they can't be used interchangeably.

Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are typically referred to as ongoing operating expenses, which are short-term expenses that are used in running the daily business operations.

Understanding the difference between capital and expense is critical for businesses to effectively manage their finances. Capital expenditures are investments in long-term assets that provide value to a company over time, while operating expenses are costs incurred in maintaining day-to-day operations.

Capital expenses include long-term investments like buying a building, investing in machinery, or filing patents. Operating expenses include daily expenses like the cost of rent, office supplies, and staff wages that are part of running ongoing operations.

For example, the purchase of a photocopier would be but the purchase of toner and paper are OpEx. and OpEx are treated differently from an income tax standpoint and businesses prefer one to the other based on various reasons. There's a clear distinction between the two–they can't be used interchangeably.