From the course: Certified Information Security Manager (CISM) Cert Prep (2022): 1 Information Security Governance
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Capital vs. operational expenses
From the course: Certified Information Security Manager (CISM) Cert Prep (2022): 1 Information Security Governance
Capital vs. operational expenses
- [Instructor] There are two different types of expenses in the world of business budgeting, capital expenses and operational expenses. If you've ever heard anyone using the phrase different flavors of money, this is probably what they were talking about. Money that falls into the capital expense budget typically can't be used for operational expenses and vice versa. Therefore, it's really important to understand each type of money and how it may be used. Capital expenses are costs that an organization incurs as part of building out and maintaining its fixed assets. For example, if you buy or renovate a building, that's a fixed asset, and the costs associated with that asset are capital expenses. Other examples of capital expenses include purchasing expensive computing equipment, buying vehicles, and buying new multifunction printers. Operational expenses are the cost of running the business on a day to day basis that…
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