- Recurring expenses
- Maintaining the operating capacity.
- The benefit is exhausted within an accounting year.
- E.g. painting of the campus, we are not increasing the capacity, we are just maintaining it. If we built a new building, it would be increasing the capacity and thus will be an example of a Capital Expenditure
Deferred revenue expenditure, a cost that incurs once in many (say 3) years.
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Intrinsically its a revenue expenditure
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But the amount is very big. And its effect is spread across the next few years.
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The value of the expenditure is spread through the next few years.
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doubt How does capital appreciate?