Difference among Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure.
Capital Expenditure
- Period of Benefit: Benefit is enjoyed beyond the accounting year, lasts for a long time.
- Purpose: Relates to the acquisition of fixed assets.
- Nature of Occurrence: Non-recurring in nature.
- Aim: Helps to increase the earning capacity of the business.
- Convertibility: Converted into cash.
Revenue Expenditure
- Period of Benefit: Benefit is consumed during the current year only.
- Purpose: Incurred for the purpose of generating revenue.
- Nature of Occurrence: Recurring in nature
- Aim: Helps to earn the exisiting revenue
- Convertibility: Cannot converted into cash.
Deferred Revenue Expenditure
- Period of Benefit: Benefit enjoyed for more than one year.
- Purpose: Relates to the capturing or retaining the market
- Nature of Occurrence: Non-recurring in nature.
- Aim: Helps to increase the earning capacity of the business.
- Convertibility: Cannot be converted into cash.
