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Capital expenditure vs revenue expenditure

Generally replacement cost is regarded as revenue expenditure. I have a doubt in this regard, If an asset is purchased having life of 5 yrs and after using it for 3yrs replacing total asset with similar kind of asset, whether it turns to revenue or capital expenditure?? How the journal entries are made in the books?? Can anyone please help me out of this doubt!!!


VIJAYA SARADHI MAGANTI

VIJAYA SARADHI MAGANTI

CA Inter

850

10-Mar-20

179

Answers (2)

Replacement cost of the asset purchased is to be capitalised in the books of accounts as it is New asset


vinay kumar

vinay kumar

CA Inter

3K+

10-Mar-20

vinay kumar

Replacement cost of the asset purchased is to be capitalised in the books of accounts as it is New asset

Then in which case replacement cost considered as revenue expense


Thread Starter

VIJAYA SARADHI MAGANTI

VIJAYA SARADHI MAGANTI

CA Inter

850

10-Mar-20

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