Capital-And-Revenue-Expenditure Igcse Edexcel

Capital expenditure is money that is spent on non-current assets for the long-term benefit of the business

Capital expenditure includes:

• The purchase of non-current assets

• The delivery of non-current assets

• The installation of non-current assets

• The legal costs incurred with the non-current asset purchases

• The decoration of new non-current assets

• The extension of non-current assets 

  • e.g. increasing the size of a storage warehouse

Capital expenditure is included in the statement of financial position under the non-current assets section

• It is not included in the income statement

Revenue expenditure is money that is spent on the day-to-day running costs of the business

Revenue expenditure includes:

• The purchase of goods for resale

• General expenses

• Insurance

• Training costs

• Wages

• Repairs of non-current assets

• Redecoration of existing non-current assets

Revenue expenditure is included in the income statement

• It is not included in the statement of financial position

• However, it will contribute to the profit or loss for the year, which is recorded in the statement of financial position