Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are called capital expenditures.

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Capital expenditures are investments made in fixed assets that are expected to increase the asset's useful life, improve its efficiency or capacity, or provide other economic benefits beyond the current period. These expenditures are capitalized and depreciated or amortized over the asset's useful life. Expenditures that only maintain or repair an asset's existing condition are typically considered operating expenditures.

Expenditures That Increase Operating Efficiency or Capacity for the Remaining