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Analyse and advice. In a cold country, a hotel changes its carpet every year. Whether such expense is Capital or Revenue?

Whether accounting of such expenses be in the nature of Capital or Revenue.

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Question added by Dibey Thomas , Auditor , Talal Abu Ghazaleh & Co International
Date Posted: 2016/01/21
Nida Afreen
by Nida Afreen , business development and sales manager , Usk solutions ltd

it is Revenue expenditure since its from the normal course of business

Mohamed Hakeem Meerashahib
by Mohamed Hakeem Meerashahib , Branch Manager , Sri Lanka State Trading (General) Corporation

It is a Revenue Expenses as the life time of the carpet is only one year. If it is used more than one year, it must be recorded as Capital Expenditure...

Hope you understand...  

Mohammad Iqbal Abubaker
by Mohammad Iqbal Abubaker , Jahaca Pty Ltd - Accounts Administrator , Jahaca Pty Ltd - Accounts Administrator

I agree with Nida Afreen   Assistant Manager.

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