Patent Cost in Financial Projections

The cost of purchasing a patent can be capitalized as a long term asset in the balance sheet and amortized over its useful life. Research and development costs incurred in developing a product which is later patented are normally not capitalized and are treated as an expense in the income statement.

Last modified September 18th, 2019 by Michael Brown
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Estimate Capital Expenditure

Capital expenditure is amounts spent of long term assets during the accounting period.

Long term assets are assets which have a long life and are for use within the business and not held for resale, they include for example land, buildings, equipment, and plant and machinery, needed to get the new business up and running, ready to start producing and selling goods and services.

Capital expenditures are included in the financial projection as a negative amount in the cash flow statement, as money flows out of the business to pay for them.

Last modified September 27th, 2019 by Michael Brown
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