capital or revenue


This query is : Resolved 

(Querist)
21 June 2008 A school building which is 20 years old replaces all its corroded mild steel windows to aluminium sliding windows of better quality and easier to operate than the old windows.whether this expenditure should be charged to capital or revenue?

21 June 2008
it is not resulting in improvemnt or extension....

It is part of establishment charges....upkeep...etc.. it is a revenue expenditure.


Pc
profvpp@gmail.com
www.bharadwajinstitute.com

Deepak (Querist)
23 June 2008 Sir,
the windows are of better quality than the earlier windows and also facilitate easier operation. whether this translates to extention in capacity?
Deepak

26 June 2008 still revenue, why r u insisting on capital?

jaygulani (Expert)
26 June 2008 If it is heavy expenditure. So it will be written off in comming years. So it is capital expenditure. But if this is not big amount and can be writtn off in single financial year then it will be treated as revanue expenditure

27 June 2008 sorry but a big NO. nature of exp. never depend on amount involved. it always decides on the basis of what differnce exp. has made to normal working of a plant/machine or company.


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