What is capital expenditure?
It is an expenditure in order to upgread or capitalize the fixed asset .this can be expressed either by extending the future expected life or by capitalizing the fixed asset cost.
Recurrent or Revenue Expenditure are those expenditure the benefits of which are utilized by company in one single year and capital expenditure are those expenditure the benefits of which are utilized for morethan one fiscal year. Revenue expenditure Example: Inventory etc Capital Expenditure : plant, machinery, building etc.
What is the differentiate between capital expenditure and recurrent expenditure and what are some examples?
Then only they find the real profit or loss and financial position of the business Because the capital expenditure will take place to Balance sheet and revenue expenditure will go to profit and loss account. Capital expenditure also called asset of the business. These expenditure also called non-recurring nature expenses. Revenue expenditure also called recurring nature expenses.
Capital Expenditures is referred as amount of money needed to spend on capital items or fixed assets such as land, buildings, roads, equipment, etc. that are projected to generate income in the future. Capital expenditures to be budgeted include replacement, acquisition, or construction of plants and major equipment. Capital Expenditure Budget is plan prepared for individual capital expenditure projects.