The difference between opex and capex may not be immediately obvious for some expenses; for instance, repaving the parking lot may be thought of inherent to the operation of a shopping mall.
The dividing line for items like these is that the expense is considered capex if the financial benefit of the expenditure extends beyond the current fiscal year.
[citation needed] For tax purposes, capex is a cost that cannot be deducted in the year in which it is paid or incurred and must be capitalized.
Further to the above, capex creates or adds basis to the asset or property, which once adjusted, will determine tax liability in the event of sale or transfer.
Sometimes an organization needs to apply for a line of credit to build another asset, it can capitalize the related interest cost.