Capital Versus Operating Incorporate applicable language into funding documents that distinguishes between normal operations & capital support Understand the significance in negotiating funds pursuant to the cable license agreement by and between all parties Accounting literature does not have strict definitions for either term although these terms are used frequently and have generally accepted meaning The difference between capital budgeting and operating budgets are terms used in managerial accounting –The primary focus of budgeting for normal operations is the current time period (12 months in your fiscal period) –Capital budgeting's primary focus is on the project or program with a far-reaching time span and frequently entails larger dollar amounts and time spans

Capital Budgeting Costs associated with having property, plant, and equipment include property taxes, insurance, and long-term lease rentals –the objective is usually to increase utilization of facilities as well as maintaining the plant –poor equipment utilization is costly and poor management of cash resources Capital support should extend beyond the purchase of property and equipment to expenditures associated with maintaining and safeguarding the property as well as any direct expenditures undertaken to increase the utilization of the property and equipment. –Expenditures such as real and personal property taxes, property insurance, repairs and maintenance, allocations of employee time incurred in the maintenance or safeguarding of property, software associated with tracking equipment, and storage costs would qualify as "capital support." –If entities were to design and construct facilities or equipment internally, then any direct time and expenses as well as overhead should be considered as capital support

Operating Budget Capital budgets are in stark contrast to operating budgets Intended to provide the financial resources to cash flow the day to day operations –program costs –salaries and wages –employee related costs –occupancy costs –supplies –staff development –professional fees –All other general and administrative costs