Pls clarify the difference b/w deffered and capital exp. If we enjoy the benefits of the exp. for more than one yr. called as D.R.E. Well then what does capital exp. means? If we buy one machine for the factory it is a capital exp. We enjoy the benefit of that asset upto sum yrs. i.e., upto the life time of that machines. Then my doubt is why it is becoming a Capital exp. and why insurance premium is becoming a D.R.E.
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Difference b/w capital and deffered revenue expenditures.
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the expense which is revenue in nature and its benefit is for more than one accounting period than it will be called deffered revenue expenses
Any exp which is revenue in nature but benefit received more then one year called as deffred revenue exp
Any expebses expance earning capicity of the company by bringing new capital asset or expansion in the existing capicity of the company is a capital exp
Perfect Mr. Valji. Thanks for ur reply. Also Aditya.
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