CAPEX stands for "Capital Expenditure." It refers to the money a company spends to acquire, upgrade, or maintain physical assets such as buildings, machinery, equipment, vehicles, or technology infrastructure. Capital expenditures are typically made with the expectation that they will provide benefits to the company over an extended period, often several years.

Key points about CAPEX include:

• Long-term Investments: CAPEX represents investments in assets that are expected to generate value for the company over an extended period, as opposed to day-to-day operational expenses (OPEX).
• Depreciation: Many CAPEX items are subject to depreciation, which means their value is allocated over their useful life for accounting and tax purposes. This helps companies match the cost of the asset with the revenue it generates.
  • Examples: Common examples of CAPEX include building a new manufacturing facility, purchasing heavy machinery, upgrading computer servers, acquiring vehicles for a delivery fleet, or expanding a company's physical infrastructure.
• Strategic Decision: Decisions related to CAPEX are often strategic in nature, as they can significantly impact a company's future growth, productivity, and competitive position.
• Budgeting: Companies carefully plan and budget for CAPEX expenditures to ensure they have the necessary funds available for these long-term investments.
• Financial Analysis: Analysts and investors often scrutinize a company's CAPEX spending to assess its growth prospects and financial health. High CAPEX can indicate aggressive expansion plans, while low CAPEX may suggest a more conservative approach.
• Regulatory and Accounting Considerations: CAPEX spending can have tax implications and may need to comply with accounting standards, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).

In this way, it's important to perform several analysis for CAPEX data to provide long-term value and benefits to the company.

CAPEX Calculation: CAPEX = PeC + FA Supplier + Lease debts 

• PeC (Prise En Charge): This represents the actual costs (received costs). They are systematically recorded and allocated to the appropriate project, often through the Project Systems (PS) module. This allows organizations to track and monitor project expenditures in real-time, compare them to budgeted amounts, and assess the financial health and progress of the project. Properly capturing and managing actual costs is crucial for accurate financial reporting, cost control, and decision-making throughout the lifecycle of the CAPEX project it ensures that the project stays on budget and that financial resources are allocated efficiently to achieve the project's objectives.
• FAS (Fixed Asset Suppliers): refers to a vendor or supplier that provides the organization with tangible assets, such as machinery, equipment, vehicles, or other capital goods that are intended to become part of the company's fixed asset inventory. SAP is used to manage the procurement process, record the receipt of assets, verify invoices, and ultimately account for the fixed assets as part of the organization's capital expenditure project. Properly managing the relationship with fixed asset suppliers is crucial to ensure that the organization acquires and maintains the necessary assets efficiently and cost-effectively.
• Lease Contracts: An agreement between entities which as significant role when organizations want to acquire assets through leasing arrangements. Involve the careful management of leased assets, accounting for lease liabilities and right-of-use assets, and ensuring compliance with lease accounting standards. Proper handling of lease contracts is crucial for accurate financial reporting and effective management of capital expenditures, especially when leasing is chosen as an alternative to outright asset purchase. In here, they are under the IFRS16 which has a significant impact on how organizations account for lease contracts, both for lessees (those who lease assets) and lessors (those who provide assets on lease).

In here we will have the information from the investments projects (PecP and FAS) and lease contracts.

Note: The vendor values (FAS and Lease Supplier) they are excluded from WC to be in this scope for the CAPEX analysis.

The CAPEX Application was built for different reasons but the main reason it was because exist some issues with the Project Costs solution and the CAPEX solution allow the users to justify and correct sometimes the figures that we have for the investment projects making a link on what we have in Project Cost, in FI and in BFC data. The Project Costs application we don't have any link to the BFC data so this CAPEX application facilitate this reconcilation between BFC CAPEX vs BW PeC and Cash data. 

In this section we will approach:

• Source of Data;
• SAP BW High Level View;
• CAPEX Structure;
• FAS values: Specific logic
• Lease IFRS16 solution

BFC vs FI comparisons should be done only in Conso. View; balances are supposed to be equal  

In the Lease contract we have the different fields which provide information about the values to be posted and planned. Keep in mind this information appears in some specific reports based on the REFX data (for example planned data).

Repayment: It's calculated dynamically it's not store in any place in SAP. So in BW we don't get this information and we have a logic in BW to have the same behaviour as we have in SAP when we run the transaction. It's not 100% accurate but the business are aware of this so we can have some discrepancies. 

All contracts are assigned to an asset.