Dear all,
Rs 10,000 lakhs have incurred as a advertising expenses in my organisation.
Qs. in this case advertising expenses is revenue or capital expenditure.
1 Replies
Sathish Karunakaran
(ACA)
(614 Points)
Replied 28 November 2007
I opine, bifurcation of advt. exp. on quantum basis into cap. & rev. exp. is only the secondary aspect. The economic benefits arising from such exp. for more than one yr. will primarily decide its status regarding rev. or cap. exp.
Ex. contract with a celebrity of 2 croes for 2 yrs. in relation to advt. of its products, then 2 croes is spreaded over 2 yrs. evenly on the grounds that benefits of such exp. is expected to derive in 2nd yr. also.
At end of 1 yr. balance of 1 croe disclosed under "deferred rev. exp." in B/s.
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