Depreciation of fixed asset is an example of ----------------- expenditure
a) Revenue
b) Deferred revenue
c) capital
d) none
plsss explain hww????
manoj
(student)
(5205 Points)
Replied 24 November 2012
The purpose of determining this figure is to allow businesses to extend the overall cost of a purchase across several years, in order to express its overall value as opposed to just claiming it as a one-time expense.
Anuj Jain
(pqr)
(94 Points)
Replied 24 November 2012
ACCORDING TO ME..........
DEPRECIATION ON FIXED ASSET IS REVENUE EXPENDITURE.
THIS IS BECAUSE THE FIXED ASSETS WHICH WE PURCHASE IS A CAPITAL ASSET AND FOR ANY BUSINESS IT IS A CAPITAL EXPENDITURE.THE BENIFIT OF THE FIXED ASSET IS NOT RESTRICTED TO THAT PARTICULAR YEAR ONLY IN WHICH WE PURCHASE FIXIED ASSET. ITS BENIFITS IS ENJOYED BY THE BUSINESS FOR MANY LONG YEARS AND ALSO SUCH FIXED ASSETS ARE USED TO RUN T HE OPERATIONS OF BUSINESS, DEPRECIATION ON FIXED ASSET IS THAT PART OF FIXED ASSET WHICH BUSINESS HAS ENJOYED IN THAT YE AR . THE PRICE OF FIXED ASSET IS DISTRIBUTED OVER THE NUMBER OF YEARS ACCORDING TO THE BENIFITS ESTIMATED BY THAT ASSET . ION OF THE DEPRECIATION IS NOTHING BUT THE ESTMATION OF BENIFIT FOR THAT PARTICULAR YEAR. WE SIMPLY AMORTISED OUR CAPITALA EXPENDITURE OVER SEVERAL NUMBERS OF YEARS ACCORDING TO ITS BENIFITS
Praveen.S
(Accountant)
(47 Points)
Replied 24 November 2012
REVENUE EXPENDITURE
Capital Expenditure results in creation/acquisition of Fixed Asset. Depreciation is the process of reducing the value of fixed assets in the books over the period of its life (in any prescribed method and rates prescribed by Companies Act or any other applicable law) by charging to the profit & Loss A/c.
Its debited to the Profit & Loss A/c like any other Revenue
Expenditure.
aswatha
(udumalpet)
(90 Points)
Replied 24 November 2012
thanku alll...... for ur kind replyyy.....:)
Ashwini Kumar Rohilla
(M.Com and CA-FINAL)
(949 Points)
Replied 24 November 2012
Hey your doubt is clear only because of CCI
aswatha
(udumalpet)
(90 Points)
Replied 24 November 2012
| Originally posted by : Mr. Ashwini Rohilla | ||
 |
Hey your doubt is clear only because of CCI |
 |
tanks alottt.... :)
Tony John
(Chartered Accountant)
(6085 Points)
Replied 25 November 2012
A revenue expenditure is an amount that is expensed in the current period—thereby being matched with revenues of the current accounting period
Depreciation on fixed asset is an example of revenue expenditure.
The asset purchased gives benefit throughout its useful life.
So the wear and tear on the asset should be accounted for, proportionately throughout it's useful life.
Charging depreciation is also based on the matching principle.
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