Kumar Gaurav (Going...to be C.A soon...) (1624 Points)
10 February 2009HIIIIIII, If we purchased 50 tube lights for our company it will be treated as capital expenditure.But if we replaced 10 out of them due to fuse then it will be treated as a capital exp. or revenue exp.????? Because, according to the definition the exp. will be capitalised only when it will increased the productivity or reducing the cost of production. plz helppppppppp thnx in advance
adula...
(student)
(550 Points)
Replied 10 February 2009
here replacement of 10 bulbs means ... the 10 bulbs or not working
it is very simple
it is revenue expenditure
any expenses made is Revenue exp ...I mean to repairs(not first time when the time of buying), to reduce working expenses etc all are reven exp
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 10 February 2009
yea adula is right............
adula...
(student)
(550 Points)
Replied 10 February 2009
here you have mistaken.....expenditure made so as to increase its productive capiacity is cap exp
but the exp made to reduce the expenses in business is rev exp
simple shortcut method:
all maintainence are revenue exp others cap exp
finch
(student)
(42 Points)
Replied 14 February 2009
it will be a capital exp.
reason:when u bought the bulbs they wud not be lasting forever...u hav to replace them...and the replcaced bulbs r new ones so their life is longer than the bulbs u hav replaced...understand here that replace and repair r two different words....when u repair an asset u do that to maintain its working life...but u replace an asset whn its working life is over and the replaced asset provides greater benefit......hence it is capital exp....
adula...
(student)
(550 Points)
Replied 15 February 2009
hello finich
u r wrong
the assets which is concerned with ur business and if it is increasing the production then only its capital exp
but if you are saving some thing or avoiding some expenses it comes to reven exp
finch
(student)
(42 Points)
Replied 15 February 2009
| Originally posted by :adula..... | ok...so consider a firm which offers the chairman a car as a perquisite...now this car has no relevance to the business of he firm but it is still recorded as an asset in the firm's books and u still provide depn on it...if u repair tis car u treat it as a revenue expense but if u replace it u will consider that as a capital exp isnt it?...so why shud this logic be not applied to tubelights ..just cos they r lower in value?||
| " | hello finich u r wrong the assets which is concerned with ur business and if it is increasing the production then only its capital exp but if you are saving some thing or avoiding some expenses it comes to reven exp |
" |
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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