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Legal fees incurred for defending the case against us is loss right ,just like fine .it gives no benefit .how come it s revenue exp??
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Maintenance expenses are costs incurred when performing routine actions to keep an asset in its original condition. Examples of maintenance costs include simple electrical repairs, bulb replacement, paint touch-ups, pool cleaning, lawn care, etc. Capital expenditures, on the other hand, involve major repairs, replacements, and upgrading of components, and such activities require time, effort, and money to achieve. Examples of capital expenditures include carpet replacement, security system upgrades, building exterior painting, pool deck refurbishment, and roof replacement. The main difference between the two expenses is that, while maintenance expenses are incurred to keep assets working in their original condition, capital expenditures are incurred to increase an assetâ??s useful life. The benefit of maintenance expenses is not expected to go beyond 12 months, whereas capital expenditures are expected to benefit the asset owner for a period exceeding 12 months Similarly legal fee is mantainace expense because lawyer helps us to protect our asset by making us win the case
Sai Teja
Legal fees that are revenue in nature would include, for example, fees incurred to recover unpaid rent, while legal fees that are capital in nature would include fees incurred in connection with the purchase of a property.
I understand but I m asking legal fees incurred for defending a suit against us is a loss right coz it gives no benefit.
Thats why it is revenue expenditure Capital expenditure is a expenditure which is expected to generate future economic benefits for a period of more than one year Other than such expenditures ,all the remaining expenditure shall be considered as revenue expenditure
Sai Teja
Thats why it is revenue expenditure Capital expenditure is a expenditure which is expected to generate future economic benefits for a period of more than one year Other than such expenditures ,all the remaining expenditure shall be considered as revenue expenditure
Then how.is loss different from revenu exp
All expenses incurred to bring an asset to a condition where it can be used is capitalized as part of the asset. They include expenses such as installation costs, labor charges if it needs to be built, transportation costs, etc. Capitalized costs are initially recorded on the balance sheet at their historical cost. Revenue expenditures include the expenses required to meet the ongoing operational costs of running a business, and thus are essentially the same as operating expenses (OPEX). ... Revenue expenses related to existing assets include repairs and regular maintenance as well as repainting and renewal expenses. Legal fee is revenue expenditure because it is not bringing any benefit.so it is kind like operating expenses.. Still any doubt.. Ask??
Thread Starter
Reetikaa RThen how.is loss different from revenu exp
Expenses are different from loss. Income - expenses = profile or loss