Capital expenditure includes costs incurred on the acquisition of a fixed asset and any subsequent expenditure that increases the earning capacity of an existing fixed asset.
Where as, Revenue expenditure incurred on fixed assets include costs that are aimed at 'maintaining' rather than enhancing the earning capacity of the assets. These are costs that are incurred on a regular basis and the benefit from these costs is obtained over a relatively short period of time.
If it is finance lease then it is capital expenditure otherwise it s revenue expenditure
revenue expenditurerevenue expenditure
Now, if a capital expenditure is treated as a revenue expenditure, then the expenses would be overstated and also the Fixed assets would be overstated
Capital expenditure is spending from your savings (eg buying a house), Revenue expenditure is spending from your wages (eg buying a beer).
if you recored revenue expediture as capital expediture your profit will be decrease by that amount
Because it is important. Capital expenditure = non-deductible Revenue expenditure = deductible
revenue expenditure
Yes depreciation is a revenue expenditure as it incurs every year to generate revenue and capital expenditure is that expenditure which is incurred for one time to earn revenue for more than one fiscal year.
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.
capital expenditure.
Expenses are overstated and assets are overstated
Expenses are overstated and assets are overstated