Capital Expenditure Vs Revenue Expenditure

The amount spent by the company for possessing any long term capital asset or to enhance the working capacity of any existing capital asset, or to increase its lifespan in order to generate future cash flows or to decrease the cost of production, is known as Capital expenditure. As a huge amount is spent on it, the expenditure is capitalized, i.e. the amount of expenditure is spread over the remaining useful life of the asset.

Comparison Chart

BASIS FOR COMPARISON	CAPITAL EXPENDITURE	REVENUE EXPENDITURE
Meaning	The expenditure incurred in acquiring a capital asset or improving the capacity of an existing one, resulting in the extension in its life years.	Expenses incurred in regulating day to day activities of the business.
Term	Long Term	Short Term
Capitalization	Yes	No
Shown in	Income Statement & Balance Sheet	Income Statement
Nature	Non-recurring	Recurring
Benefit	More than one year	Only in current accounting year