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altaf

altaf (Querist)
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12 February 2015 Please Clear me this
whats the difference between capital expenditure and revenue expenditure

Altaf

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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12 February 2015 Capital expenditure occurs when a business gets a long term advantage due to that expenditure.
It is usually incurred for accusation of an asset. These expenditures do not occur in the regular day to day transactions of the business.
Common examples
Purchase of furniture, office building etc.
Purchase of additional furniture or machinery
Expenditure incurred in connection with the purchase of a fixed asset. For example, carriage paid of machinery purchased.
Purchase of patent right, copy rights etc.

Expenditure which is not for increasing the value of fixed assets, but for running the business on a day to day basis, is known as revenue expenditure.

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