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hi
paying for refurbishment as part of upgrading a building – is capital expenditure?
If you are actually improving the building above what it was originally, then it would be capital expenditure.
However the word refurbishment would usually mean that you were getting it back to the state it was originally in – it would therefore be revenue expenditure.
question is as following
which one is an example of capital expenditure?
1) paying bonuses to production overheads
2) paying for refurbishment as part of upgrading a building
3) paying legal fees in order to recover customer debtsanswer is 1 ?
No – the answer is 2.
Although refurbishment is usually revenue expenditure, here it is the word ‘upgrading’ that matters. Upgrading implies that the building is being improved above what it was originally.
and also i have one more question relating to this topic.
Repying a bank overdraft is capital expenditure? if it is yes, why? for which principe?
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