Question

Which task would not be considered a capital expenditure?

Answer 1

An expenditure is not considered as capital expenditure until future benefits can be derived from that expenditure. If the expenditure is for repairing of plant and machinery or for building maintenance is considered as recurring expenditure and transferred to profit and loss account. For capital expenditure, it must be probable that future income would be generated. For example, renovating the roof of the building which will increase life by 5 years is considered as capital expenditure.