A capital subsidy is provided for the acquisition or improvement of long-term assets – a building, technology, a machine, a vehicle or software above a set value. A current subsidy covers operating expenditure, i.e. wages, energy, materials, services, rent or minor equipment. This division is not a formality: funds cannot be freely moved between the two categories, and purchasing an asset from a current subsidy is a classic ineligible operation. For municipalities and budgetary organisations, moreover, the classification determines which budget classification item the expenditure is accounted under. In practice this means the breakdown of the budget must be thought through already at the application stage – a later change requires an amendment to the contract and the provider's consent. For capital expenditure, it is also monitored whether the asset remains in its original purpose throughout the entire sustainability period.
See also: Eligible expenditure, Budget reallocations in a project, Project sustainability.
