The accounting treatment of capital and revenue expenditure are as under:

Revenue expenditures are charged as an expense against profit in the year they are incurred or
recognised. Capital expenditures are capitalised-added to an asset account.
The following are the points of distinction between capital expenditure and revenue expenditure:

Capital Expenditure	Revenue Expenditure
1. Capital expenditures are incurred.	1. Revenue expenditures are incurred for more than one accounting for a particular accounting period. period.
2. Capital expenditure are of	2. Revenue expenditures are of non-recurring nature. recurring nature.
3. All capital expenditures eventually	3. Revenue expenditures are not generally become revenue expenditures. capital expenditures.
4. Capital expenditures are not	4. All revenue expenditures are matched matched with capital receipts. with revenue receipts.
5. Capital expenditures are incurred	5. Revenue expenditures are incurred before or after the commencement always after the commencement of of the business. the business.