# Capex vs Opex

*Accounting & Reporting — Finicade finance glossary*

Capex buys assets that last beyond a year and is spread across the income statement through depreciation; opex hits profit immediately. Where the line falls is a judgement with real consequences: capitalising costs that should be expensed inflates current profit and is a recurring feature of accounting scandals, WorldCom being the largest. Cash flow is unaffected by the choice, which is why cash-based analysis is harder to game.

**Also known as:** capital expenditure, operating expenditure, capitalisation

**Related terms:** [Depreciation](https://finicade.com/glossary/depreciation), [Free Cash Flow](https://finicade.com/glossary/free-cash-flow), [Operating Income (EBIT)](https://finicade.com/glossary/operating-income), [Non-GAAP Earnings](https://finicade.com/glossary/non-gaap-earnings), [Section 179 Deduction](https://finicade.com/glossary/section-179-deduction)

Source: https://finicade.com/glossary/capex-vs-opex