CAPITAL EXPENDITURE

REVENUE EXPENDITURE

1. These assets are shown at the asset side of the balance sheet.

2. Expenditure for the purchase and installation of asset.

3. The benefits will flow or enjoyed by the organisation for more than one year.

Ex: Plant and Machinery.

4. Asset is purchased for utilisation in business.

5. Depreciation is considered for the life of the asset.

6. It is generally heavy in nature.

7. It is associated with property right belonging to the entity.

8. Capital expenditure is transferable, i.e., it can be disposed of and transferred from money or money’s worth.

Expenses are shown in the debit side of the P&L a/c.

Expenditure is used for maintenance of asset.

The benefits for the expenditure will flow or enjoyed by the organisation for the current year only.

Ex: Salaries, printing and stationary, etc..

Goods are purchased with intention to sell.

There is no need of depreciation.

It is modest in volume.

In revenue expenditure there is no such right.

Revenue expenditure is not transferable.