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Is the capital expenditure means have to be capitalize into the asset?
and revenue expenditure which have to be expenses off?
A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.
But actually I do not know why the word is revenue expenditure for non-English speakers is weird.Capital expenditure is Capital in nature, that is improving or adding capital value to company and therefore Capitalised. Like buying a machine or renovating so that its life increases and it becomes efficient
Revenue expenditure is an expense done to gain revenue, hence the name.
Take repairing of machinery for instance, when the machine is repaired only then can you produce and sell and make a revenueWhat Elitsa says is the application of prudence. recognising expenses at earliest but deferring revenues until they actually occur
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