- This topic has 2 replies, 2 voices, and was last updated 9 years ago by
.
Viewing 3 posts - 1 through 3 (of 3 total)
- Posts
in example i of Chapter 4, note4:
2,200 for decorating the clothing shop. according to the syllabus in page 26, I think this decoration is an improvement to the shop because it it not repairing (nothing need to be repaired and the owner just wants to improve the shopping environment)
why here it is treated as a revenue expenditure rather than a capital expenditure?
Decorating the existing business premises does not constitute capital expenditure as there is nothing new that has been acquired so every time it is painted / decorated this is merely returning the property to a proper state. This will no doubt “improve the shopping environment” but that does not make it capital expenditure – adding an extension to the property would be capital!
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.