ABSTRACT
In HE, as in most sectors, a distinction must be drawn between funds for capital expenditure and funds for revenue expenditure. Capital expenditure is defined by HEFCE in its Financial Memorandum (FM) as ‘expenditure used to create or purchase a new fixed asset, replace an existing fixed asset, or refurbish or remodel an existing fixed asset’. A fixed asset could be a building, a piece of equipment, a vehicle and so on. Capital expenditure can, therefore, be clearly distinguished from revenue expenditure, such as costs of staff, costs of heating and maintaining buildings and so on, which is incurred in operating an institution on a day-to-day basis.
