Capital expenditures are for things that are expected to last a long time, like buildings and vehicles, so I guess the accounting rules around them are meant to allow the costs to be realized over a similarly long time. The idea is probably that companies would be less likely to invest in capital if it meant taking a big hit all at once. But I’m not an accountant.
Why can they spend money now, but make it so on paper it’s as if they spent it next quarter?
Capital expenditures are for things that are expected to last a long time, like buildings and vehicles, so I guess the accounting rules around them are meant to allow the costs to be realized over a similarly long time. The idea is probably that companies would be less likely to invest in capital if it meant taking a big hit all at once. But I’m not an accountant.