Definition

Capital Expenditure refers to funds spent on long-term business assets such as equipment, buildings, and technology that provide benefit over multiple years.

Key Points

• Recorded as an asset on the balance sheet
• Deducted over time through depreciation
• Cannot be fully deducted immediately for UAE Corporate Tax
• Treated differently from operating expenses

Example

A company buys production equipment for AED 200,000. It is recorded as Capital Expenditure and depreciated over its useful life.