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Capital Expenditure - Revenue Expenditure

DavidbyworthDavidbyworth Registered Posts: 71
Hi All

With regard to a landlord who has uplifted the garden and landscaped. Would this be capital or revenue expenditure?



  • davealucasdavealucas LondonMAAT Posts: 86
    The likelihood is that the garden and landscaping would last longer than one accounting period and by that definition would be capital expenditure.
  • DavidbyworthDavidbyworth Registered Posts: 71
    Thanks, however my understanding is that the length it purchase would last is not the deciding factor. for example, replacing a broken window would be revenue expenditure, but would likely last longer than an accounting period?
  • crispycrispy Trusted Regular SouthamptonRegistered Posts: 456
    I guess you would have to ask whether the expense was an improvement / significant alteration(which would be disallowed as capital) or simply a repair restoring / repalcing an asset to it's orginal condition (allowed as revenue expense - as per your window example).

    It sounds like capital to me.
  • davealucasdavealucas LondonMAAT Posts: 86
    @Davidbyworth there are some grey areas in the whole thing. I take your point on the window, but such expenditure would be very minimal and not worth capitalising. You can argue the same for, say, a calculator.

    Coming back to the point in hand, if you were just replacing some flowers, vegetables etc in the garden then I would argue it is revenue, but in this case you was talking about landscaping the garden. That wouldn't be a simple repair or refreshment of an existing asset and would meet the definition of creating an asset.
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