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Difference between capital expenditure and revenue …

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Difference between capital expenditure and revenue expenditure

Posted by Darshana Maurya 5 years, 4 months ago

CBSE > Class 12 > Accountancy

1 answers

Yogita Ingle 5 years, 4 months ago

Capital Expenditure	Revenue Expenditure
Definition
Expenditure incurred for acquiring assets, to enhance the capacity of an existing asset that results in increasing its lifespan	The expense incurred for maintaining the day to day activities of a business
Tenure
Long Term	Short term
Value addition
Enhances the value of an existing asset	Does not enhance the value of an existing asset
Physical existence
Have a physical presence except for intangible assets	Do not have a physical presence
Occurrence
Non-recurring in nature	Recurring in nature
Availability of Capitalisation
Yes	No
Impact on Revenue
Do not reduce business revenue	Reduces business revenue
Potential Benefits
Long-term benefits for business	Short-term benefits for business
Appearance
It appears as assets in the balance sheet and some portion in the income statement	It always appears in the Income statement

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