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Financing Capital Outlay

This document discusses capital outlay, which it defines as money spent to maintain, upgrade, acquire, or repair capital assets. [1] It provides examples of capital outlay projects in the context of the Philippines Department of Education (DEPED), such as construction of buildings and additions, retrofitting for energy conservation, and initial equipment. [2] It then outlines two types of capital outlay: purchasing new assets and extending the life of existing assets. [3] The document emphasizes the importance of capital outlay for maintaining property/equipment, investing in growth, and allowing school districts to complete more facilities work than their annual budgets allow.

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Raian Duran
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257 views

Financing Capital Outlay

This document discusses capital outlay, which it defines as money spent to maintain, upgrade, acquire, or repair capital assets. [1] It provides examples of capital outlay projects in the context of the Philippines Department of Education (DEPED), such as construction of buildings and additions, retrofitting for energy conservation, and initial equipment. [2] It then outlines two types of capital outlay: purchasing new assets and extending the life of existing assets. [3] The document emphasizes the importance of capital outlay for maintaining property/equipment, investing in growth, and allowing school districts to complete more facilities work than their annual budgets allow.

Uploaded by

Raian Duran
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Module 11

FINANCING CAPITAL
OUTLAY
CLAIRE P. TABELLA
Discussant

ROME MORALISTA
Professor
What is Capital Outlay?

-- it is defined as money that's spent to maintain, upgrade, acquire, or


repair capital assets. It is sometimes called capital expenditures. These are
considered investments in the company, so the accounting of them is different
than what it is for operational expenses.

-- it is an outlay charged to a long-term asset account. Capital outlay


includes expenditures that result in the acquisition of fixed assets, existing
buildings, improvements to sites, construction of buildings, construction of
additions to buildings, retrofitting of existing buildings for energy conservation,
and initial and additional equipment and furnishings for educational facilities.
In DEPED…
Capital Outlay - refers to the provisions of the General Appropriations Act,
particularly those pertaining to the budget of the [DECS] DEPED for elementary
and secondary education for (i) the acquisition and improvement of sites; (ii)
the construction, replacement, rehabilitation and repair of buildings,
classrooms, libraries, workshops, toilets AND SANITATION FACILITIES and other
structures; and (iii) [furniture, fixtures, and equipment such as, but not limited
to, desks, chairs, laboratory and workshop implements, computers, books,]
OTHER PROPERTY, PLANT AND EQUIPMENT IN ACCORDANCE WITH THE
CURRENT GOVERNMENT ACCOUNTING STANDARDS PRESCRIBED BY 'THE
COMMISSION ON AUDIT, SUCH AS FURNITURE, FIXTURES, EQUIPMENT,
COMPUTERS, and the other basic and essential tools for learning whose
beneficial use shall exceed one (1) year; [and]
Capital Outlay funds, in the context of the
government…

are those used to build, improve, or equip physical property that will
be used by the public. Roads, broadband fiber, museums, playgrounds, schools,
irrigation ditches, hospitals, lands, and furniture can all be capital outlay.
2 Types of Capital Outlay
1. Purchase of New Assets

When the company spends the money to purchase the new assets that appear in
the balance sheet of the company, such as machinery, plant, land, buildings,
equipment, etc., then it will be treated as the capital outlay of the company. The
company spends the money on purchasing the new assets as it would enable the
increase in the future growth of the company.

2. Extending the Life of Its Existing Assets

When a company invests money in the existing assets of its business, it leads
to an increase in the life of the assets and production capacity. Such expenses
are counted under the capital outlay of the company.
Importance of Capital Outlay
* Capital expenditure (CapEx) is a payment for goods or services recorded—or
capitalized—on the balance sheet instead of expensed on the income statement.

* CapEx spending is important for companies to maintain existing property and


equipment, and invest in new technology and other assets for growth.

…….in education, capital outlay/projects are a way for school districts to


complete a larger amount of facilities work sooner than otherwise possible
within the scope of the annual school budget.
Examples of Capital Outlay

1. Site Improvements
2. Building Constructions
3. Retrofitting Current Buildings
4. Equipment for Educational Facilities
5. Additional Facilities
6. Acquisition of Lands
7. Machinery
8. Other necessities that are aren’t normally expended.
Thank
You!!!

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