Air conditioners | Appliances |
Buildings | Computers |
Cybersecurity infrastructure | Data centers |
Data storage devices | Distribution centers |
Elevators | Energy infrastructure |
Equipment | Escalators |
Factories | Fixtures |
Furniture | Industrial Robots |
Laboratories | Land |
Machinery | Mobile devices |
Nanotechnology | Networking infrastructure |
Offices | Point of sale systems |
Refrigeration units | Retail locations |
Safety equipment | Satellites |
Scientific instruments | Security systems |
Ships | Software |
Storage units | Technology |
Tools | Transportation infrastructure |
Vehicles | Ventilation systems |
Waste disposal equipment | Workbenches |
Land & Buildings
The purchase of land and buildings for your business.Construction
Any costs that go into constructing a building or structure is a capital investment.Landscaping
Productive changes to land such as an irrigation system for a farm.Improvements
Maintenance is expensed. Significant improvements to capital that significantly extend its lifespan are capital investments.Furniture & Fixtures
Anything that goes into the interior of a building such as a couch or painting that is part of the decor.Infrastructure
Infrastructure such as networking equipment for a data center.Machines
Machines such as an industrial robot.Computing
Computing equipment and devices.Vehicles
Vehicles used in your business.Software Development
Software development can often be capitalized for software that is successfully operationalized. A failed project is expensed. As such, a project needs to be finalized before it can be capitalized.Software
Software you buy from other firms is typically considered a capital investment. Recurring as-you-go license fees are expensed.Acquisitions
Acquiring another company that adds value to your business.Branding
A brand purchased from another company is a capital investment. Developing your own brand is typically viewed as an expense.Intellectual Property
Intellectual property purchased from another company such as a patent. Your own research and development is typically viewed as an expense with some exceptions.Summary
Capital investments are purchases that have long term value for a business. This can include everything from buildings to tools and can include intangible investments such as software development.
Overview
Capital investment is the allocation of financial resources toward the acquisition, improvement or maintenance of long-term assets.
Notes
(1) This publication is about the concept of a capital investment. Accounting rules for capitalizing spending are beyond the scope of this publication. This requires the advice of a Registered Professional Accountant with knowledge of the tax treatment of spending in your jurisdictions. (2) Many types of intangible capital are not considered a capital investment according to current accounting practices. For example, investments in your knowledge might be considered human capital but this isn't viewed as a capital investment. Likewise, structural capital, social capital and innovation capital can be impossible to capitalize. This is a common criticism of current accounting practices as investments in physical things are often treated as capital investments where investment in intangible capital are often considered expenses.| Overview: Capital Investment | ||
Type | ||
Definition | Spending that has long term value to a business. | |
Related Concepts | ||
