During the Transport of Heavy Machinery, Damages Or Losses Incurred are Considered As Capital Expenditures Or Revenue Expenditures
A ny loss or damage, accide nt, injury of a worker or an employee occurred during t he b usi ness operations is considered as Revenue Expenditure as t hese Expe nses are s hort term i n nature i.e., equal to or less t ha n o ne year a nd are recorded i n Income Statement or Profit A nd Loss Accou nt for t he current period i n w hic h t hese are i ncurred. Examples of suc h reve nue expe nditures are see n i n t he case of Current Assets w hic h are damaged or lost due to fire or damaged suc h as Goods ( Stock or Inventory or Merc handise ) destroyed b y fire or damaged duri n g tra n sportatio n or delivery time, etc. Actually, any addition, exte nsion or exchange of mac hi nery or any ot her Fixed Asset is co nsidered as Capital Expenditure as it is eit her added to the cost of machi nery, i ncreased t he cost or bri ngs t he new o nes i n ord...