![]() ![]() ![]() For instance, electrical wiring is part of a building. The cost of repairing a property by replacing one of its parts is usually a current expense. This is the case because a compressor is a separate asset, and is not a part of the building. For example, the cost of buying a compressor for use in your business operation is a capital expense. The cost of replacing a separate asset within that property is a capital expense. Is the expense for a part of a property or for a separate asset? For example, the cost of repairing wooden steps is a current expense. If you replace wooden steps with concrete steps, the cost is a capital expense.Īn expense that simply restores a property to its original condition is usually a current expense. The cost of a repair that improves a property beyond its original condition is probably a capital expense. ![]() For example, the cost of painting the exterior of a wooden house is a current expense.ĭoes the expense maintain or improve the property? For example, the cost of putting vinyl siding on the exterior walls of a wooden house is a capital expense.Ī current expense is one that usually recurs after a short period. Does the expense provide a lasting benefit?Ī capital expense generally gives a lasting benefit or advantage. ![]()
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