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Capital Expenditures

A financial concept addressing the cost associated with big ticket items including technology equipment, vehicles,and real estate. Often money is raised through the sale of stock and/or borrowing money from a financial institution. This term ties to other terms such as ‘Debt Service’, ‘Interest on Debt’ and so on.

Replacement Reserves- Understanding the Fundamentals


Long term and short term housing rental businesses use a financial operations tool to maintain, repair and upgrade the physical facilities.  This tool is known as replacement reserves in the real estate industry.  In almost all cases it is a [...]

Gross Domestic Product (GDP)


Gross Domestic Product is defined as the total production for the country.  It is measured by including all the dollars spent to purchase products/services from all the various sellers of goods.  The largest purchaser of products/services is [...]

Capital Expenditures – IRS Definition


The Internal Revenue Service uses a complex definition to identify capital expenditures (assets).  A capital expenditure is not deductible as an expense in the tax year purchased; the taxpayer or entity must use depreciation, amortization or [...]

Internal Revenue Service (IRS) Definition of an Expense


The Internal Revenue Service defines a business expense as ‘ordinary’ and ‘necessary’.  Ordinary expenses are those costs typically incurred in your industry.  So a restaurant would not ordinarily purchase vaccines.  And a medical [...]