Which items are in CAPEX and OPEX?

[work2love]

Hello.

I have questions about CAPEX and OPEX.

Especially ,for Gas Field, which items are in CAPEX and OPEX?

Much detail, much better !!!

If anybody has a sample, it will be great for me.

Help me~~~!

 

[zdas04]

The answer depends on the company, their aggressiveness, and often the phase of the moon. The accounting standards are reasonably clear, but they allow some wiggle room for games. Basically you capitalize anything that creates a new substantial asset. You expense incidental expenditures on existing assets.

A well cleanout is generally OpEx. A pay add is generally CapEx. Buying a new compressor for a well is CapEx unless it replaces a "similar" machine then it is OpEx. If you are renting a compressor and the rental company installs it as part of the monthly rental then the "capital installation costs" are supposed to be CapEx, but rarely are coded that way. Typically, maintenance activities are OpEx, but an overhaul that returns an engine to zero-hour condition is often CapEx.

There are exceptions all over the place. We used to get guidelines on what we could capitalize every year and it was amazing how often a specific item would move from one list to the other.

David

 

[786392]

Dear
If not mistaken,At certain bussiness set-ups Rev-ex(Revenue Expense) is used as an equivalent term to OP-Ex(Operating Expense)

Best Regards
Qalander(Chem)

 

[zdas04]

Never heard that one, but a lot of companies use Lease Operating Expense (LOE) instead of OpEx. There are always a lot of names for stuff, but in short there are things that you expense in the current year and things that you have to depreciate over a number of years. Where a particular class of invoice fits into that scheme can make a difference in a company's balance sheet.

David

 

[786392]

Thanks David;Most probably I stand updated now.

Best Regards
Qalander(Chem)