My attic and Investing Journey

Hi Ishmohit (@Worldlywiseinvestors), There are two hidden types of Capex I think can be added to the list:

1. Some companies report technology improvements or work on IT enhancements, etc. as operating expenditure (opex). But these are actually their capex. These expenses show up on P&L and hence affect profitability in the short run. But they enhance “capabilities”, in order to reduce cost or increase revenue in future. Hence the saying, for new generation of companies, opex is capex.
2. The second type is the converse of this. Some unscrupulous companies capitalize certain project expenses that should actually be opex. This may temporarily bump up immediate quarterly numbers, but impose needless depreciation burden over the subsequent years.

Based on your experience, how do we identify these hidden types of capex.