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Capital Expenditure

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.

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