Capital Expenditure (CapEx) Approval Checklist Template

Completed by the requester with the budget holder. The three scope questions decide which later phases and tasks appear.

• Name the requester, budget holder, finance reviewer and approvers — later tasks are assigned from these fields
• Describe the asset and the business need — what problem it solves, what happens if the request is refused, and the date it is needed
• Record the total project cost — purchase price, delivery, installation, internal labour, licences, training and a contingency, not just the first quote
• Answer the scope questions — is it in the approved capital budget, which approval tier does the total cost fall into, and does it involve IT systems, data, buildings or health and safety
• Check for related requests — purchases that form one project are approved as one, so an order is never split to stay under a limit
• Attach the quotes, estimates and specification received so far

Owned by the finance reviewer, before anyone builds a business case on the wrong accounting.

• Apply the recognition test and your capitalisation threshold — probable future economic benefits and a reliably measurable cost (IAS 16, FRS 102 Section 17, ASC 360), and a life of more than one year
• Separate costs that cannot be capitalised — training, general overheads, repairs and, under IFRS, most configuration of cloud software the company does not control
• Check whether it is really a lease — leased or rented equipment follows IFRS 16, ASC 842 or, from 2026, the new FRS 102 Section 20
• Flag borrowing costs on long builds — required under IAS 23 and ASC 835-20 for qualifying assets, a policy choice under FRS 102 Section 25
• Record the asset class, expected useful life and expected in-service date — the fixed asset register needs them in Phase 7
• Note the likely tax treatment for the tax team — de minimis, bonus depreciation and Section 179 in the US; capital allowances in the UK

Shown only when the request is not in the approved capital budget.

• Explain why the spend was not in the budget — a new need, a failure, a regulatory change or a missed item
• Identify the funding — deferral of another budgeted project, use of contingency or a genuine increase in the capital budget
• Show the effect on the full-year capital budget and the cash forecast — updated, not estimated in the request
• Check capital expenditure limits and covenants in the loan agreements — many facilities cap annual capex or restrict new borrowing
• CFO approval of the funding source — before the request continues to evaluation

• Calculate payback, NPV and IRR — using the company’s hurdle rate and the total project cost, and attach the workings
• Test the key assumptions — what happens to the return if volumes, savings or cost move by a realistic amount
• Compare the alternatives — do nothing, repair, lease instead of buy, or a smaller option
• Obtain quotes or run a tender above the procurement threshold — or record why a single supplier was justified
• Complete the technical reviews — IT security and data protection, facilities, health and safety and insurance, shown only when the scope question says the request involves them
• Finance review of the business case — numbers traced to quotes, the budget and the classification in Phase 2

Each approval task is assigned to a named person and holds the checklist until it is answered.

• Confirm the approval tier from the delegation of authority — on the total project cost including contingency, not the value of the first purchase order
• Budget holder approval — confirms the need and that the department will carry the running costs
• Finance director or controller approval — confirms the classification, funding and numbers
• CFO or CEO approval where the tier requires it — with any conditions recorded on the task
• Record a rejected or deferred request with the reasons — so a resubmission starts from the same file

Shown only when the total project cost is above the board or investment committee threshold.

• Prepare the board paper — need, options, financial case, risks, funding and the decision requested
• Take it to the investment committee first where one exists — and record its recommendation
• Attach the board resolution or minute extract — with the approved amount, scope and any conditions
• Confirm the approved amount and contingency with the requester — overruns beyond the agreed tolerance come back for approval

• Raise the purchase order quoting the approval reference — purchasing checks the PO against the approved amount and supplier
• Open a project or assets-under-construction code — so spend is tracked against the approval from the first invoice
• Send the asset details to the fixed asset register owner — class, useful life, location, custodian and tag number
• Confirm the depreciation start date when the asset is available for use — not the order or invoice date
• Report spend against the approved amount — and return any overrun beyond tolerance to Phase 5
• Hold the post-investment review six to twelve months after go-live — actual cost and benefits against the business case, and lessons for the next request