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Operating Expense Capitialization

Inputs

Description

This is capitialization conversion for any expense. Use if firm has certain expenses, most likely operating, that need to be capitialized as they act as a cash-flow producing asset. Most commonly used are marketing expense which creates a brand awareness asset or Reasearch & Development which creates future cash flow from a new product, service, or business model.

How to use

1) Pick desired line item expense to capitialize
2) Select number of years desired to capitialize asset. (Asset expected life). Do this by adding and removing data inputs. Number of years is number of boxes.
3) Enter expense data for line item desired
4) Click submit

When you shouldn't use

Expense doesn't create future cash flow for the firm; Line item is already capitialized

Outputs