What exactly is the net capital expenditure and how can it be calculated? Could you please explain how I can find the net capital expenditure?
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First of all, capital expenditure include all the expenses that can be capitalized under IFRS or/and GAAP. For example, research and development can be capitalized under specific circumstances Similarly, when a company buys a fixed asset and adds an extension to this asset (the extension will bring additional economic benefit), the both the fixed asset and the extension can be capitalized.
However, all these fixed assets need to be depreciated. The net capital expenditure is the capital expenditure less the depreciation for the year and shows whether the firm increases or decreases it’s asset base.
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