<Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> <P> Capital expenditure or capital expense (capex) is the money a company spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land . It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset, such as repairing the roof . </P> <P> Capital expenditures are the funds used to acquire or upgrade a company's fixed assets, such as expenditures towards property, plant, or equipment (PP&E). In the case when a capital expenditure constitutes a major financial decision for a company, the expenditure must be formalized at an annual shareholders meeting or a special meeting of the Board of Directors . In accounting, a capital expenditure is added to an asset account, thus increasing the asset's basis (the cost or value of an asset adjusted for tax purposes). capex is commonly found on the cash flow statement under "Investment in Plant, Property, and Equipment" or something similar in the Investing subsection . </P> <P> For tax purposes, capex is a cost that cannot be deducted in the year in which it is paid or incurred and must be capitalized . The general rule is that if the acquired property's useful life is longer than the taxable year, then the cost must be capitalized . The capital expenditure costs are then amortized or depreciated over the life of the asset in question . Further to the above, capex creates or adds basis to the asset or property, which once adjusted, will determine tax liability in the event of sale or transfer . In the US, Internal Revenue Code § § 263 and 263A deal extensively with capitalization requirements and exceptions . </P>

Where does capex go on the balance sheet