Which line is CapEx
Investing section, the line typically labelled "Purchases of property and equipment" or "Additions to property and equipment." Some filers split out "Capitalised software development" on a separate line; include it if you want a true cash-investment view.
Maintenance vs. growth
Three practitioner approaches: set maintenance equal to D&A; estimate from a flat-volume historical year; build bottom-up from PP&E disclosures. See Damodaran for the framework[Damodaran].
Capitalised software
ASC 350-40 capitalises internal-use software once a project enters the application-development phase. The cash outflow runs through investing as "Capitalised software development costs" or similar. Include it for firms where it is material (mid-cap SaaS, integrated banks).
Acquisitions are not CapEx
Cash paid to acquire businesses sits in investing under "Acquisitions, net of cash acquired," not in CapEx. Standard FCF ignores this line. For owner- earnings models, treat tuck-in acquisitions as growth CapEx if they replace organic R&D investment.
The AI-infrastructure surge
Microsoft, Meta, Amazon, and Google lifted CapEx to roughly 35-45% of OCF in FY24-25, almost entirely AI-data-centre. The historical maintenance-CapEx-equals- D&A heuristic breaks for this period; treat the incremental AI CapEx as growth and reserve historical D&A as the maintenance baseline.