Capex Request Template (Authority for Expenditure)

Capex Request: [Project name]

Capital expenditure request (also called authority for expenditure, AFE, or capital appropriation request) asking for authority to commit funds to a capital project: request summary, need and alternatives, scope and cost breakdown, financial evaluation summary, capitalisation and accounting treatment, funding and phasing, procurement, risks, benefits tracking, the approval route under the delegation of authority, and post-approval control. Written as original practice guidance; accounting treatment is referenced by standard and paragraph number only (IAS 16, IAS 38, IAS 23, IAS 36 under IFRS; ASC 360 and ASC 350-40 under US GAAP). Obtain the standard for the normative text. Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax, legal or accounting advice.

Document control

Approvals

Revision history

Contents

1. Request summary
2. Business need and alternatives
3. Scope and cost breakdown
4. Financial evaluation summary
5. Capitalisation and accounting treatment
6. Funding, phasing and budget status
7. Procurement and contracting
8. Risks and dependencies
9. Benefits tracking and review plan
10. Approval route and authority
11. Post-approval control and close-out
12. Glossary and references

1. Request summary

2. Business need and alternatives

2.1 Need

State the need with evidence. Example: manual picking at Leipzig needs about 61,000 agency hours in Q4, the mispick rate is 0.45% of order lines against a 0.20% service target, and volume growth will exceed manual capacity during peak 2028. Evidence: FY2026 agency invoices, quality log, capacity model.

2.2 Alternatives considered

Full analysis: Investment Appraisal APR-2027-002, sections 2 and 10. Strategic context: Business Case [ID].

2.3 Category and urgency

Tick one: [ ] health, safety or legal compliance; [ ] replacement of failing asset; [x] efficiency or cost reduction (Example); [ ] growth or new capability; [ ] IT or digital. For emergency requests (immediate safety or business continuity), record who authorised the spend and when the retrospective approval will be presented.

3. Scope and cost breakdown

3.1 Scope

In scope: [list]. Out of scope: [list]. Example: in scope are the equipment, warehouse control software licence and configuration, installation, electrical works, floor reinforcement, fire-system modification and internal project management. Out of scope: racking replacement (separate request CXR-2027-005) and changes to the group warehouse management system.

3.2 Cost breakdown

Example check: 1,650 + 420 + 310 + 180 + 90 + 150 = 2,800; 2,800 + 40 + 35 = 2,875. Contingency ratio: 150 / (1,650 + 420 + 310 + 180) = 150 / 2,560 = 5.9%.

3.3 Cost estimate quality

3.4 Preparing a reliable estimate

Build the estimate from the bottom up, one work package at a time, and record the source of every figure next to it: a supplier quote with its reference and validity date, a contractor estimate, an internal rate card or a benchmark from a recent similar project. Approvers should be able to tell at a glance which parts of the cost are contractually fixed and which are still estimates, because the estimated parts are where overruns come from. In the example, 85% of the capex is under a fixed-price quote, while the building works (WP-04) are only an estimate; that is why the contingency is sized from the building and installation risks (RSK-001, RSK-002) rather than as a flat percentage.

Include every cost needed to bring the asset into use: delivery, installation, testing, site preparation, professional fees and directly attributable internal labour. Show one-off operating costs (training, process redesign, data migration, double running) in the same request even though they are expensed, so the approver sees the whole commitment. Leave out general overheads, costs of running the business while the project is under way, and financing costs unless the asset qualifies for borrowing cost capitalisation under group policy.

Size contingency from the risk register, not by habit. For each risk that the contingency is meant to cover, estimate the likely cost if it happens and its probability, and explain the total. Risks that the contingency does not cover (for example a dependency on another project, or a change in regulation) should be named in section 8, so the approver knows they sit outside the requested amount. Never use contingency to fund scope that was left out of the estimate deliberately to keep the request under an authority limit.

4. Financial evaluation summary

Reconciliation: the appraisal treats all capex as a year 0 outflow, which is slightly conservative compared with the payment schedule in section 6, where EUR 238k falls in Q1 2028.

5. Capitalisation and accounting treatment

5.1 Recognition and measurement references

IFRS is a trade mark of the IFRS Foundation. The references above are paragraph numbers only; read the standards for the requirements.

5.2 Judgements

Record each judgement, the facts and the conclusion in your own words. Example: the warehouse control software is licensed on premises and the equipment cannot operate without it, so it is capitalised as part of the equipment rather than as a separate intangible asset. If the software were a cloud service the entity does not control, the configuration and customisation costs would need a separate assessment; obtain the controller's written view and cite the group accounting manual. The warehouse is leased, so WP-04 building works are leasehold improvements depreciated over the shorter of their useful life and the remaining lease term, including reasonably certain extensions.

5.3 Asset classes and useful lives

Example annual depreciation at full spend: 2,800 / 8 = EUR 350k a year from 2028, matching the tax depreciation assumed in the appraisal; if book and tax lives differ, the difference creates deferred tax, which the controller records.

5.4 Local and statutory notes

Statutory accounts and tax returns may follow different rules from group IFRS reporting. Example: the German entity applies local commercial and tax depreciation rules for its statutory and tax accounts. Check with the tax lead whether the optional declining-balance tax allowance (up to 30% a year) for movable assets acquired before 2028-01-01, introduced by the German 2025 investment programme, applies to the equipment delivered in 2027; if elected, tax relief arrives earlier than in the appraisal's straight-line assumption (Investment Appraisal (finance/investment-appraisal) section 8.1 shows the effect). The Vietnamese subsidiary applies Circular 99/2025/TT-BTC (from 2026-01-01) for its statutory accounts. Record any differences here and check local law.

6. Funding, phasing and budget status

6.1 Payment schedule

Example check: 714 + 952 + 476 + 238 = 2,380 (30% + 40% + 20% + 10% of 2,380). FY2027: 714 + 952 + 476 + 180 + 90 = 2,412. FY2028: 238. Total excluding contingency 2,650; with contingency 2,800.

6.2 Funding and budget status

7. Procurement and contracting

8. Risks and dependencies

Dependencies: [other projects, approvals, permits]. Example: racking request CXR-2027-005; fire authority sign-off of the modified sprinkler layout.

9. Benefits tracking and review plan

Review plan: Example: light check 6 months after go-live (benefit run-rate, open defects); full Post-Investment Review (finance/post-investment-review) 18 months after go-live, presented to the body that approved this request.

10. Approval route and authority

10.1 Authority limits applied

Example: total authority EUR 2,875k exceeds the CEO limit, so the request goes to the board.

10.2 Approval flow

The controller checks completeness before any approver sees the request; incomplete requests go back to the sponsor, not up the chain.

10.3 Conditions of approval

10.4 Reviewer checklist before approval

The controller and the CFO review the request before it reaches the approver. Work through these questions and record the answers on the request file:

• Completeness of the amount. Does the total authority include capex, contingency, one-off operating costs and any later phase that the decision commits the organisation to? A request that omits a dependent phase understates the commitment and may fall under the wrong authority level.
• Consistency with the appraisal. Do the capex, timing and benefit figures match the approved version of the appraisal, with its ID and date? Any difference must be explained in section 4.
• Budget status. Is the request within an approved budget line, and if not, has the unbudgeted route in the delegation of authority been followed, with the offset or additional funding identified?
• Accounting treatment. Has the controller agreed what is capitalised, the components, useful lives and the date depreciation starts? Are training and process costs expensed?
• Contract protection. Are acceptance tests, retention, delay penalties, warranty and supplier financial standing addressed before the order is placed?
• Cash and funding. Has the payment schedule been given to treasury for the 13-week forecast and the liquidity plan, and does the spend affect any covenant or minimum liquidity test?
• Conditions. Are the proposed conditions specific, measurable and owned, with a date by which evidence will be produced?

Approvers should decline to sign a request that fails any of these checks and return it to the sponsor; approving with an open question shifts the risk to the approver.

11. Post-approval control and close-out

11.1 Monitoring

Report monthly: approved amount, committed (purchase orders), spent (invoices), forecast at completion, variance, contingency used and remaining, milestone status. Feed the totals into the capex register and the monthly management report.

11.2 Tolerances and supplementary requests

11.3 Close-out

On completion: confirm final cost and transfer from assets under construction to the fixed asset register by component; release unused contingency (it is not available for other projects without a new request); close purchase orders; record lessons; and confirm the post-investment review date. Close-out record: [date, final cost, variance, approver].

11.4 Common errors

• Splitting to stay under a limit. Dividing one project into several requests, or phasing a single commitment across budget years, so that each piece falls under a lower approval limit. Treat linked requests as one for authority purposes.
• Approving the estimate, not the commitment. Signing a request whose amount excludes items the project cannot proceed without, such as building works, software interfaces or commissioning, which then return as supplementary requests that look like overruns.
• Contingency as a slush fund. Spending unused contingency on scope that was never approved, or carrying it over to another project. Unused contingency is released at close-out.
• Late accounting decisions. Deciding after the spend whether software, building works or internal labour are capitalised, which leads to audit adjustments and to depreciation starting on the wrong date.
• No link to treasury. Changing the payment schedule without telling the treasurer, so the 13-week forecast and the funding plan miss a large outflow or show a retention payment in the wrong quarter.
• No owner for the benefits. Naming finance as the owner of operational benefits. The manager who runs the process must own the savings, or nobody will be accountable for delivering them.

12. Glossary and references

12.1 Glossary

12.2 References

Standard and licence note

Structure aligned with common corporate practice for capital expenditure authorisation; no standard prescribes the content of a capex request. IAS 16, IAS 38, IAS 23 and IAS 36 (IFRS Foundation) and FASB ASC topics 360, 350-40 and 835-20 are cited by name and paragraph or topic number only; no text from them is reproduced or paraphrased, and the user must read the standards for the requirements. IFRS is a trade mark of the IFRS Foundation; this template is not affiliated with or endorsed by it. Circular 99/2025/TT-BTC is a Vietnamese legal normative document cited by number. Corvid Commerce Group, the project and every figure are fictional. This template is original text written for this collection. Check the current official versions of cited standards and laws before use. Template licence: MIT.