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Why is it revenue transaction? Y can't it be capital transaction

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Meda Jeevansai

Meda Jeevansai

CA Foundation

11K+

02-Apr-21 15:22

179

Answers (20)

Best Answer

But it give benefit for long period na bro

Generally painting is treated as maintenance expenditure and are debited to p and l , painting may be required every year as well. However it can be capitalized if such expenditure is not done regularly and the amount of expense is material to the entity Since question has not mentioned anything about the nature of expense therefore assuming as maintenance expenditure


Abhishek Purohit

Abhishek Purohit

CA Inter

9K+

02-Apr-21 18:36

*Repainting van


Meda Jeevansai

Meda Jeevansai

CA Foundation

11K+

02-Apr-21 15:22

*Repainting van

Normal maintenance expenditure


Abhishek Purohit

Abhishek Purohit

CA Inter

9K+

02-Apr-21 16:17

Normal maintenance expenditure

But it give benefit for long period na bro


Meda Jeevansai

Meda Jeevansai

CA Foundation

11K+

02-Apr-21 16:19

But it give benefit for long period na bro

It may be immaterial


Abhishek Purohit

Abhishek Purohit

CA Inter

9K+

02-Apr-21 16:22

It may be immaterial

Can you please elaborate?


Meda Jeevansai

Meda Jeevansai

CA Foundation

11K+

02-Apr-21 18:13

How is carriage costs on replacement part revenue ?? Plss explain

If the replacement part meets definition of PPE (asset) then carriage cost would be capital expenditure and if it doesn't then it's revenue expenditure


Abhishek Purohit

Abhishek Purohit

CA Inter

9K+

04-Apr-21 23:44

PPE MEANS BRO

Asset


Abhishek Purohit

Abhishek Purohit

CA Inter

9K+

04-Apr-21 23:47

If the replacement part meets definition of PPE (asset) then carriage cost would be capital expenditure and if it doesn't then it's revenue expenditure

In this question, y is replacement part considered as revenue exp .pls tell


Reetikaa  R

Reetikaa R

CA Foundation

4K+

05-Apr-21 10:02

In this question, y is replacement part considered as revenue exp .pls tell

Yeah me too have same doubt regarding that :)


Meda Jeevansai

Meda Jeevansai

CA Foundation

11K+

05-Apr-21 10:04

In this question, y is replacement part considered as revenue exp .pls tell

Carriage cost relating to bringing a machinery to use are alone capitalised. Carriage cost on a replacement part cannot be capitalised


ruchi lahoti

ruchi lahoti

Moderator

05-Apr-21 10:26

Replacement part alone is revenue ma'am??

It depends on whether it leads to any improvement in efficiency. If so, it can be treated as Capital


ruchi lahoti

ruchi lahoti

Moderator

05-Apr-21 10:59

It depends on whether it leads to any improvement in efficiency. If so, it can be treated as Capital

If the ques is silent abt the efficiency ,it s assumed as REVENUE MA'AM


Reetikaa  R

Reetikaa R

CA Foundation

4K+

05-Apr-21 13:19

If the ques is silent abt the efficiency ,it s assumed as REVENUE MA'AM

Carriage cost of replacement part, yes.


ruchi lahoti

ruchi lahoti

Moderator

06-Apr-21 11:29

Carriage cost of replacement part, yes.

No ma'am I asked for replacement part alone . Eg a part of asset replaced ? Here is it revenue or cap ?? If ques s silent regarding improvement in efficiency, shall I take it as revenue only ma'am??


Reetikaa  R

Reetikaa R

CA Foundation

4K+

14-Apr-21 01:15

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