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A Capital expenditure is an amount spent to acquire an asset or improve a long-term asset such as equipment or buildings. The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset
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A revenue expenditure is an amount that is expensed immediately, thereby being matched with revenues of the current accounting period. Routine repairs are revenue expenditures because they are charged directly to an account such as Repairs and Maintenance Expense. Even significant repairs that do not extend the life of the asset or do not improve the asset (the repairs merely return the asset back to its previous condition) are revenue expenditures.
An improvement could be capitalised but maintenance or repair could not.
Any subsequent expenditure can be capitalised where:
All other subsequent expenditure must be written off.
In capital expenditure the benefit from such expenditure is expected to accrue over a period of time eg-purchase of an asset. Benefits from revenue expenditure will accrue within a yr, eg-wages cost
هل تحتاج لمساعدة في كتابة سيرة ذاتية تحتوي على الكلمات الدلالية التي يبحث عنها أصحاب العمل؟