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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.
What else can I help you with?
Is leasing a capital expenditure?
If it is finance lease then it is capital expenditure otherwise it s revenue expenditure
What will be paid water charges to the muncipal committee a capital expenditure or revenue expenditure?
revenue expenditurerevenue expenditure
If a capital expenditure is treated as a revenue expenditure then?
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
What differentiates capital expenditure from revenue expenditure?
Capital expenditure is spending from your savings (eg buying a house), Revenue expenditure is spending from your wages (eg buying a beer).
What would happen if you recorded a capital expenditure as a revenue expenditure?
if you recored revenue expediture as capital expediture your profit will be decrease by that amount
Why it is important to distinguish capital expenditures from revenue expenditures for tax purpose?
Because it is important. Capital expenditure = non-deductible Revenue expenditure = deductible
What are the item's of capital expenditure and recurrent expenditure?
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.
The cost of a new windshield wiper on a delivery truck would be classified as a capital expenditure or revenue expenditure or an infrequent expense?
revenue expenditure
Is depreciation 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.
Is the expense incurred in acquiring patent rights a revenue expenditure?
capital expenditure.
What happens when a capital expenditure is treated as a revenue expenditure?
Expenses are overstated and assets are overstated
What happens when a capital expenditure is treated as revenue expenditure?
Expenses are overstated and assets are overstated
