capitalize

That Expense means what...?

sir!....huh!!!!....I mean "any expense"

An expense shall be capitalise:
If new asset is acquired,
If new asset is constructed,
If it results in increase in revenue generatin capacity,
If it results in increase in effiviency,
It provides enduring benefit.

Basically capitalise means such expense will be part of cost of asset and will be written off in no. of years, as such expense provide enduring benefit.

for eg. Wages paid to labour for construcion of building will be debited to building account instead of wages account, installation charges on machinery will be debited to machinery account instead of Installation charges account.

Thank you so much!!!!
I got some idea, after reading this

First of all you should learn about the revenue nature and capital nature of expenses or income then you understand better these

@ Brijesh Kumar.,

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