Revenue expenditure, Capital Expenditure and Deferred revenue expenditure — Distinction :
|
S.No. |
Basis of Distinction |
Capital Expenditure |
Revenue Expenditure |
Deferred |
|
1. |
Period of benefit | Benefit is enjoyed beyond the accounting year,- lasts for a long time | Benefit is consumed during the current year only. |
Benefit enjoyed for |
|
2. |
Purpose | Relates to the acquisition of fixed assets. | Incurred for
the purpose of generating revenue. |
Relates to the capturing or retaining the market |
|
3. |
Nature of occurance |
Non-recurring in nature. | Recurring in nature |
Non-recurring in nature. |
| 4. | Aim | Helps to increase the earning capacity of the business. | Helps to earn the exisiting revenue |
Helps to increase the earning capacity of the business. |
|
5. |
Convertibility | Converted into cash. | Cannot converted into cash. | Cannot be con–verted into cash. |