Capital and Revenue Expenditure

ndavis

First post on here! Currently studying Level 3 Book-keeping, learning about Capital and Revenue Expenditure. Can someone please explain the actual meaning of "capitalise" i have googled, which just explains why we capitalise assets, however no actual meaning of the word.

Thanks in advance.

alexnwa

Capital expenditure is expenditure on the purchase or improvement of non-current assets While Revence expenditure is all other expenditure incurred by the business other than capital expenditure.

From the definition we only capitalise assets on Purchase price add any addtional costs such as delivery costs, legal and professtional fees, installation costs (site preparation and construction) and test runs.