S.No |
Basis of
Distinction |
Capital
Expenditure |
Revenue
Expenditure |
Deferred
Revenue
Expenditure |
1 |
Period of benefit |
Benefit is enjoyed beyond the accounting year, lasts for a long time. |
Benefit is consumed during the current year only. |
Benefit enjoyed for more than one year. |
2 |
Purpose |
Relates to the acquisition of fixed assets. |
Incurred for the purpose of generating revenue. |
Relates to the capturing or retaining the market. |
3 |
Nature of
occurrence |
Non-recurring in nature. |
Recurring in nature |
Non-recurring in nature. |
4 |
Aim |
Helps to increase the earning capacity of the business. |
Helps to earn the existing revenue. |
Helps to increase the earning capacity of the business. |
5 |
Convertibility |
Converted into cash. |
Cannot be converted into cash. |
Cannot be converted into cash. |
