ABSTRACT
Capital purchase decisions are made on high-cost items such as business takeovers, purchases of land and buildings, machinery and motor vehicles. These are non-current assets and will have a life of more than one year. They will usually require specific authorisation from a senior manager dependent on the level of cost. The decision whether or not to proceed with the capital investment decision will usually be determined by the complex nature, requiring both financial projections and non-financial benefits and costs, together with the internal political requirements of the company. Revenue purchase decisions tend to relate to the income statement, in the sense that they might be purchases of consumables, services or office supplies, they tend to be lower unit costs, and they are all consumed in the short term. They are subject to buying policies within the organisation, and the buying decision is straight forward.
