Capital exp or revenue exp

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mehranmichail
Posts: 39
Joined: 14 Apr 2019, 04:54

Capital exp or revenue exp

Post by mehranmichail »

Hi again :)
Replacement of alleyway door is capital or revenue expense?
In my opinion replacement with a similar type one will be revenue , replacement with a different and better in quality and durability may be capital and if there was none before, it will be capital.
M i right? Will really appreciate guidance.
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Marek Muc
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Re: Capital exp or revenue exp

Post by Marek Muc »

Hi, a replacement of an old item with a new one of the same quality etc. can also be treated as a capital expenditure provided that the previous item is derecognised – see IAS 16.13
mehranmichail
Posts: 39
Joined: 14 Apr 2019, 04:54

Re: Capital exp or revenue exp

Post by mehranmichail »

Loads of thanks. I mixed tax with IFRS.
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