Capital and Revenue Expenditures u

We will discuss the difference between a capital expenditure and revenue expenditure as they relate to property plant and equipment. When we have maintenance or improvements to plant assets we have the question of whether we should capitalize the improvement as a depreciable asset in a similar way that we did for the original equipment, or should we expense the cost at the point of purchase. Relative factors of categorizing plant asset costs as capital expenditures or revenue expenditures are whether the expenditure increases the useful life or changes the capabilities or purpose of the fixed asset.
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