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CapEx und OpEx
In brief
CapEx (capital expenditure) is investment spending on long-lived assets that is capitalized and depreciated over its useful life. OpEx (operational expenditure) is ongoing operating spending that is booked directly as an expense. In IT, the choice between purchase, leasing, rental or cloud determines whether hardware appears more as CapEx or as OpEx, and therefore also what ultimately happens to the devices.
CapEx and OpEx in IT
| Feature | CapEx | OpEx |
|---|---|---|
| Example | Purchase of notebooks and servers | Rental, maintenance, cloud services, many service models |
| Accounting | Capitalization, depreciation over the useful life | Expense in the respective period |
| Ownership | With the company | Mostly with the provider |
| End of life | Company decides on sale or disposal | Return to the provider |
The boundary is not always clear-cut. Under international accounting standards (IFRS 16), many leases are nevertheless recognized on the lessee’s balance sheet. There are separate entries on the depreciation of IT hardware, for example on depreciation for IT.
What this means for decommissioned hardware
For purchased hardware, the residual value belongs to the company. A sale after use brings proceeds, even if the device has long been fully depreciated. With rental or service models such as Device as a Service the hardware goes back to the provider. Data erasure remains your responsibility in both cases or must be regulated contractually. How finance managers assess used IT is shown in our article What CFOs should know about used IT hardware.
Second IT buys decommissioned IT that you own at market-based prices and erases all data with certification. This entry does not replace tax advice.
Frequently asked questions about CapEx and OpEx
What is the difference between CapEx and OpEx?
CapEx are investments in long-lived assets that are depreciated over years. OpEx are ongoing costs that count as an expense immediately.
Is leasing always OpEx?
Not necessarily. Depending on the accounting framework and contract, a lease may appear on the balance sheet. Clarify the classification with your accounting department.
What happens to the proceeds from selling old devices?
It is recorded on disposal of the asset. For fully depreciated devices there is no remaining book value to offset it, so the proceeds then take effect in full as income.
What is better for IT hardware, CapEx or OpEx?
That depends on your goals. With a purchase (CapEx), the hardware belongs to you and you can sell it later. With rental and service models (OpEx), it goes back to the provider. Have the choice coordinated with your tax advisor and accounting department.
Are cloud services CapEx or OpEx?
As a rule OpEx. Cloud services cause ongoing costs that are booked directly as an expense in the respective period. There is no own hardware that is capitalized and depreciated. The exact classification depends on the contract.
Decommissioned purchased IT? Turn the residual value into cash.
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