If funds are approved for annual capital expenses, what is this typically referred to as?

The term that typically refers to funds approved for annual capital expenses is "replacement reserve." A replacement reserve is specifically set aside to cover the costs associated with replacing or maintaining fixed assets, such as equipment or property, when they reach the end of their usable life. This type of funding is crucial for ensuring that a business can sustain its operations by being prepared for future capital needs without large disruptions.

In contrast, capital surplus denotes funds that exceed the minimum requirements and can be used for various purposes, but it doesn't specifically relate to annual capital expenses. The operational budget, on the other hand, usually covers day-to-day expenses and operational costs, rather than capital expenditures. Fixed asset funding generally refers to the financing needed to acquire new fixed assets rather than the maintenance or replacement of existing ones, which is what the replacement reserve is focused on. Thus, replacement reserve is the correct terminology when discussing approved funds specifically for capital expenses that need to be anticipated annually.