Need help with expenditure??????/

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Can someone help me to determine if expenditure is an asset or an expense (capital or revenue expenditure) and how does thid determination improve the usefulness of accounting information?<BR><BR>If anyone can help, I would be much appreciated.<BR><BR>Regard<BR><BR>Foundation student1

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Need help with expenditure??????/

Hi. Capital expenditure is long-term e.g purchase of a building, delivery van or item of plant & machinery.<BR>These are assets which appear on the Balance Sheet.<BR><BR>Revenue expenditure is everyday expenses e.g. rent, petrol, electricity etc.<BR>These are expenses which appear on the Trading, Profit & Loss Account.<BR><BR>In determining your profit for the year, you need to take into account your bills, expenses, overheads, hence these appear on the P&L A/c.<BR><BR>Hope this helps, Scott.

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Need help with expenditure??????/

Thanks for ur help.!!!<BR><BR>But i need more information abt expenditure to answer the following question : <BR><BR>"In accounting it is easy to define building as an esset and repairs as an expense. Consider the situation of a company spending money on the building. Painting is probably an expense while cladding the entire building with black granite is probably an asset. As accountants how do we determine if expenditure is an asset or an expense (capital or revenue expenditure)? How does this determination imporove the usefulness of accounting information"<BR><BR>As i found so far over internet:<BR><BR>Capital Expenditure<BR><BR>The cost of making an improvement to your property that increases its value or lengthens its useful life, as opposed to a repair that only maintains your property. Appliance service calls and fixing the front door for your rental property are repairs, whereas the costs of a new refrigerator and a new roof for your rental are capital expenditures. You must deduct the expense of a repair all at once, but you must depreciate a capital expenditure over its useful life.<BR><BR><BR><BR>Revenue expenditure<BR><BR>revenue expenditure is charged to the profit and loss account. It is expenditure that is incurred (1) for the purpose of the trade of the business (e.g. selling costs, administration costs) or (2) to maintain the existing earning capacity of fixed assets<BR><BR><BR>Is there anybody out there can suggest me futher ideas and useful informaiton how to answer that question??<BR><BR><BR>

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Need help with expenditure??????/

I once capitalized the fitting of double glazing as an improvement to property, but was told it was actually an expense, as getting double glazing nowadays in no big deal - eg: it's not really an improvement.<BR><BR>Just thought I'd contribute that.