Capital expenditure includes expenditure on outright purchases, on all capital items acquired under hire purchase or conditional sale agreements, and on assets procured under finance leases, if they are not to be leased on under further finance leases. It includes expenditure on intangible items such as goodwill, patents, trade marks, mineral rights and computer software (see below).
It does not include the value of assets acquired in taking over an existing business or disposed of in selling part of a business as a going concern, or rentals payable on goods acquired through operating lease, hire or rental from other lessors or hirers.
No deductions are made for depreciation, amortisation, obsolescence or provision for bad or doubtful debts. Transactions in a currency other than sterling are translated into sterling at the closing middle-market spot rate on the day on which the transaction was done, or on the final day of the quarter.
For more comprehensive definitions about what reporters classify as capital expenditure, please view the Form CX definitions
'New building work' includes expenditure on the construction of new buildings, the extension, alteration or improvement of existing buildings and the cost of any newly-constructed buildings purchased.
'Land and existing buildings' covers the capital cost of freeholds purchased and of premiums payable for leaseholds acquired. It includes associated costs such as architects’ and surveyors’ fees, legal charges, stamp duties and agents’ commission.
'Ships, vehicles and aircraft' covers expenditure on motor vehicles, aircraft, railway rolling stock, yachts and other pleasure craft.
'Plant and machinery' includes expenditure on plant, machinery, and all other capital equipment such as office machinery, computers, TV receivers, furniture and mechanical handling equipment.
Within the 'Plant and machinery' category, 'Computer hardware' includes expenditure on microcomputers, printers, terminals and optical and magnetic readers, including operating systems and software bundled with micro-computers purchased. 'Computer software' encompasses software licence payments and all capitalised items of computer software consultancy and supply, including the purchase or development of large databases. Expenditure on 'In-house software development' includes the costs, including staff costs, of developing software with a useful life of at least one year.
Finance leases are defined according to the standard accounting practices used by banks. A finance lease is defined as one in which an asset is leased for a single fixed contractual period during which all, or nearly all, of its cost is recoverable by the lessor (even though the asset may subsequently continue in operation for an unspecified further period), or any other lease which is treated as a finance lease by the relevant accounting standards.