CAPEX

CFA Level I FRA
#1

Hello All,

Can you please help me in understanding the definition of CAPEX? I read in Financial Accounting chapter that CAPEX doesn’t include income from selling PP&E. However, in Credit Analysis chapter, it’s said that I believe CAPEX = income from PP&X - expenses on PPE.

Can someone please help?

Best regards

#2

CAPEX includes:

  • amounts spent to purchase PP&E
  • amounts received from selling PP&E
#3

Thank you S2000magician!

#4

You’re welcome.

#5

CAPEX means the capital expenditure incurred to PP&E with in one financial year . The sale from PP&E is deducted .