PSY2102 Lecture Notes - Capital Expenditure, Fixed Asset, Capital Allowance
Document Summary
This article explains the capital and revenue expenditure and the main differences with examples. Introduction: expenditure is categorised into, difference between capital and revenue expenditure. Capital expenditure is the amount of money that a company spends on acquiring new assets. Capital expenditure is the amount a company pays to acquire or upgrade long-term assets such as property, plant and equipment. The cash spent on purchasing these assets is recorded as an expense in the incurred period. Capital expenditures are reported on the balance sheet under. Fixed assets, intangible assets and equity investments. capital expenditures are recorded as expenses in the period they were incurred and reported on the balance sheet under fixed assets, intangible assets and equity investments. Revenue expenditure is the money spent on goods and services used to generate revenue. This type of expenditure is calculated by subtracting the cost of goods sold from the total income and then adding back in the price of goods sold.
