Expenditures

Expenditures are the amounts of money spent by individuals, businesses, or governments to acquire goods or services. They represent cash outflows or the transfer of value and are recorded in financial accounts as outlays. In accounting, the term can refer to any expenditure, but it is often distinguished from expenses, which are the portion of a cost charged against income in a period, whereas capital expenditures create or extend the life of an asset.

Expenditures are commonly categorized as operating expenditures (OPEX) and capital expenditures (CAPEX). Operating expenditures cover day-to-day costs such as wages, rent, utilities, and materials. Capital expenditures fund the purchase or construction of long-term assets like equipment, buildings, or software, and are typically capitalized and depreciated over their useful lives.

Budgeting and monitoring involve planning expected expenditures, recording actual outlays, and comparing them to approved budgets. Expenditure management aims to control costs, improve procurement efficiency, and reduce waste. In governmental and nonfinancial contexts, expenditures are often further classified by function (defense, health) and by object (salaries, goods).

Economically, expenditures influence aggregate demand. Personal or household expenditures (consumption) are a major component of GDP in many economies, while business investment and government spending also contribute to overall activity. The distinction between expenditure and investment is important: not all outlays yield durable assets, and some expenditures may be financed through debt.