Identify the Factors That Are Considered in Classifying an Expenditure

question 166

Essay

Identify the factors that are considered in classifying an expenditure as a capital or a revenue expenditure. Are there instances where it may be difficult to classify an expenditure as one or the other ? What basis would be used in a decision?

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Definitions:

Takeoff

The stage in a product, project, or economy's life cycle when growth accelerates rapidly after a period of relative stability or slow growth.

Success-Disengagement

The process of stepping back or reducing involvement from an active professional role or business after achieving desired goals or success.

Existence

The state or fact of living or being present; in a business context, it often pertains to the current operational status of a company.

Takeoff

The phase in a company's or product's life cycle where growth becomes rapid and significantly visible.