Theoretical Accounting

Accountancy

taking machine in rent is capital or revenue expenditure

Rohan Kumar

CA Foundation

★ 5

06-Mar-23 15:36

385

Answers (4)

Revenue

Harshitha Kalidindi

CA Final

★ 51K+

06-Mar-23 15:54

It is revenue expenditure only. It will be capital expenditure, only if it is purchased

Jaswanth P

CA Inter

★ 3K+

06-Mar-23 17:59

Capital expenditure is an investment made and Benefits of which lasts for more than 1 year and it is non recurring in nature. Revenue expenditure is recurring and gives benefits for not exceeding 1 year. When machinery is being taken at rent, then rent has to be paid at regular intervals, therfore it is a recurring expenditure and the rent is not paid for using the machinery for more than 1 year. Therfore it is revenue expenditure

Devadharshini S

CA Final

★ 58K+

06-Mar-23 19:12

In CA Inter & CA Final you will understand cases where rent payments are also capitalised and shown on balance sheet. These are advanced level concepts.

CA Suraj Lakhotia

Admin

07-Mar-23 15:46