CAPEXPLAN

How to Plan out Your Real Estate Capital Expenses over the Years – Part II

Published on Friday, 6 December 2013 14:15:28    Written by Marc
How to Plan out Your Real Estate Capital Expenses over the Years – Part II
  1. Know what the amortization periods should be for each capital expense you make and keep in mind your horizon. If you own the building, you normally amortize the capital expense for a defined period or for the normal lifespan of the item. For example, if you own a building you might amortize a roof replacement for the normal life of the roof (say 15 years), but your company might have a policy that says its 10 years for roof. So knowing the periods you will use is important.

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How to Plan out Your Real Estate Capital Expenses over the Years - Part I

Published on Tuesday, 3 December 2013 09:10:04    Written by Marc
How to Plan out Your Real Estate Capital Expenses over the Years - Part I I have wanted to tackle this question for a while but never had a chance. Please keep in mind that I refer mainly to real estate capital expenditures here, as trying to plan capital expenditures of industrial equipment for operations would be practically impossible, unless one would try and do it for a single company at a time.

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The Effects of Speculation on the Value of Capital Expenditures

Published on Tuesday, 12 November 2013 09:17:07    Written by Marc
The Effects of Speculation on the Value of Capital Expenditures
It has already been 16 years; however, the day still rings fresh in many peoples’ minds. On July 2, 1997, a cascading effect caused by the sudden devaluation of a handful of currencies across Asia caused the debt-to-GDP ratios of those economies to balloon between 100% and 167%. The subsequent result was the doubling of corporate debt caused by companies heavily leveraging their assets using foreign denominated loans. Therefore, many projects that had capital allocated to them were shelved, stalled, or scrapped altogether.

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Capital Expenditure Viability Analysis for Small Businesses

Published on Monday, 4 November 2013 09:13:23    Written by Marc
Capital Expenditure Viability Analysis for Small Businesses
Most large businesses have processes in place to do a uniform cost and benefit analysis of proposed capital expenditures. This is often performed at the level of the initiating entity and then again at the approval level. Small businesses; however, often lack procedures and processes to deal with what they would consider major capital expenditures. Let us look at some of the factors that small businesses should take into consideration when determining the viability of a capital expenditure project.

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The Fine Line Between Normal and Capital Expenses

Published on Thursday, 31 October 2013 10:08:24    Written by Marc
The Fine Line Between Normal and Capital Expenses Ever had a situation where you were scratching your head wondering if the expense you were making was a normal expense or a capital expense? You are not alone. This is something that happens more often than you might think. Why is that? If each expense has its own set of rules and definition, there should never be a situation, in theory, where you would find yourself wondering if you need to capitalize and amortize something or if you can expense it right away. Unfortunately, it is not always so easy. In the past 20 some years, I must have had this conversation dozens of times with colleagues of mine.

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