What is CapEx? What is a revenue expense?

What is a revenue expense? Revenue-generating expenditures refer to those expenditures that only extend to the current period in which the benefits of obtaining financial services are obtained. These expenditures shall be charged to the appropriate expense account as current expenses.

Article 20 of China's "Accounting Standards for Business Enterprises" stipulates that "accounting should reasonably divide revenue expenditure and capital expenditure. Where the benefits of the expenditure are related to the current fiscal year, it shall be regarded as a revenue expenditure; Where the benefits of expenditures are related to several fiscal years, they shall be treated as capital expenditures".

For example, China's industrial accounting system stipulates that the expenses that can be fully included in the current profit and loss shall be directly listed in the "financial expenses" and "management expenses" and other accounts.

Expenses with a large amount, but whose benefits are only related to the current fiscal year, i.e., those expenses with an amortization period of less than one year, are included in the "expenses to be amortized" account. These all belong to'Revenue-generating expenditures'。What is CapEx?

Capital expenditures refer to those expenditures incurred over multiple accounting periods in which the benefits of property or services are gained. Accordingly, such expenditures should be capitalized and charged to the asset class account and then transferred to the appropriate expense account in instalments based on the benefits obtained. In the business activities of the enterprise, assets for long-term use, whose economic life will go through many accounting periods, such as:

Fixed assets, intangible assets, deferred assets, etc., should be treated as capital expenditures. That is, it is capitalized first to form fixed assets, intangible assets, deferred assets, etc. Then, along with the benefits they provide to the business, they are resold as expenses in various accounting periods.

Such as: depreciation of fixed assets, amortization of intangible assets, deferred assets, etc. Whether the division of revenue expenditure and capital expenditure is reasonable and appropriate is closely related to the truth of the financial situation of the enterprise and the determination of net income.

We know: profit = = income - expenses. If an expenditure that should be a capital expenditure is regarded as a revenue expense, it will be treated as a current expense, and the asset value of the enterprise will be understated.

If expenses increase, profits decrease. If an expenditure that should be a revenue is considered a capital expense, the value of the company's assets will be overstated, resulting in a reduction in current expenses and an increase in net income for the current period. Generally speaking, whether an expenditure is a revenue expenditure or a capital expenditure is usually determined by the length of the period during which the expenditure is benefited.

Within one fiscal year or more than one fiscal year) However, if an expenditure falls under one of the following circumstances, for the convenience of accounting, a simple method is also adopted and treated as a revenue expenditure.

It can be simply understood that revenue expenditure can be directly included in the current cost, while capital expenditure should form long-term assets (such as fixed assets, intangible assets, etc.), and then amortized to each benefit period in installments. The differences between the two are:

1. Revenue expenditure is included in the current expense account, while capital expenditure needs to be transferred between capital expenditures, and amortized according to the service life in the future. 2. Revenue-based expenditure is to bring benefits to the current period, generally within one year;The capital expenditure will not only bring benefits to the current period, but also bring benefits to future business activities, generally more than one year. 3. The accounting process and method of revenue expenditure and capital expenditure are different in finance.

4. Revenue-based expenditure is the expenditure of the simple reproduction and operation link of the enterprise, which is liquid and forms current assets or current expensesThe capital expenditure is the expenditure of enterprises to expand reproduction, which is relatively fixed.

1. Revenue-based expenditure is the expense incurred by the enterprise in the course of operation, and its income is only related to the current period and offset by the current income. Capital expenditure refers to the expenditure that may be incurred in more than one financial year in accordance with the interest in goods or services;

2. When product expenses are incurred, they will be included in the corresponding cost account of the current year. Capital expenditures should be capitalized, first in the asset class, and then transferred to the appropriate expenditure items in installments based on the gains earned;

3. Capital expenditure is different from cost expenditure, capital expenditure is financed by the operating income of each beneficiary year, while capital expenditure is completely offset by the operating income of the current year. The purpose of distinguishing between capital expenditures and in-kind expenditures is to correctly reflect the value of assets and to correctly calculate multi-year gains and losses.

The division of revenue expenditure and capital expenditure is more agreed with by the benefit of expenditure and the attributes of expenditure. The so-called "benefit of expenditure" refers to the length of time that economic benefits arise as a result of the occurrence of an expenditure. An expenditure is a capital expenditure if its benefit is longer than an accounting period;An expense is a revenue expense if its benefit is limited to one accounting period.

The division of revenue expenditure and capital expenditure based on the criterion of expenditure is based on the cost attribution theory, where capital expenditure should be objectified as cost and carried forward to cost (called consumed cost) during the period of its consumption, while revenue expenditure should be recognized as an expense during the period in which the expenditure is incurred. When classifying expenditures based on the criteria of "attributes of expenditures", if an expenditure meets the definition of an asset, it is a capital expenditure, otherwise it is a current expense and is a revenue expenditure. Revenue expenditure includes capital expenditure, revenue expenditure, financial expenses, etc.

Revenue expenditure is different from capital expenditure, the former is fully compensated by the operating income of the current year, and the latter is recorded as an asset first, and the cost of each year is amortized through depreciation or amortization.

To put it simply: revenue expenditure refers to the expenditure that should be included in the profit or loss for the current period.

Capital expenditure refers to the expenditure that cannot be included in the profit or loss of the current period at one time, and this expenditure should be reasonably allocated in subsequent periods.

For example, if you pay 20,000 yuan for lighting electricity, this electricity fee is consumed in the current period, and it should be used as a current expense, which affects the income of the current period, so it is a revenue expenditure.

If you buy a piece of equipment worth 20,000 yuan, it cannot be deducted as a one-time expense. Instead, it should be included in the fixed assets, and the depreciation of the equipment should be calculated in a reasonable way during the subsequent benefit period, and the cost should be included in the installments. The expenditure of this equipment is the capital expenditure.

1.Definition: Revenue-generating expenditure refers to expenditure with a benefit period of no more than one year or one business cycle, that is, the expenditure is incurred only for the purpose of obtaining current income; Capital expenditure is the expenditure that is solely for the purpose of obtaining current income; Capital expenditure refers to expenditure with a benefit period of more than one year or one business cycle, that is, the expenditure is incurred not only to obtain income in the current period, but also to obtain income in subsequent periods.

2.Division: The principle of dividing capital expenditure and benefit expenditure requires that capital expenditure and revenue expenditure should be distinguished in the accounting, and then the revenue expenditure should be included in the expense account and included in the profit and loss statement as current profit or loss; Capital expenditures are recorded in the asset account and included as assets on the balance sheet.

The former is called expense-to-expense; The latter is called expenditure capitalization. Capitalized expenditures are gradually converted into expenses through transfer, depreciation and amortization according to the benefit principle and consumption ratio as the assets are consumed in each period.

3.Conclusion. From this point of view, the expenses related to the acquisition of the current income, that is, the costs and expenses of the current period, are, first, the revenue expenses directly charged to the expense account; The second is the capital expenditure transferred from the asset account to the expense account in the current period.

It can be seen that the purpose of capital expenditure and revenue expenditure is to reasonably determine the nature of cash expenditure and correctly calculate the current profit in accordance with the requirements of the accrual accounting system and the matching principle. 1. Understand revenue expenditure and capital expenditure.

The general purpose of the various expenditures incurred by the enterprise is to bring certain benefits to the enterprise. The length of time that various expenditures bring benefits to the enterprise is not the same, and the expenditures that can only bring benefits to the enterprise in a certain positive accounting year are called revenue expenditures; Expenditures that bring benefits to a business for a number of fiscal years are called capital expenditures.

Second, the significance of dividing revenue expenditure and capital expenditure in accounting.

The purpose of dividing revenue expenditure and capital expenditure is to ensure the accuracy of the calculation of profits in order to distinguish different types of expenses into different accounts in the accounting.

Generally speaking, capital expenditures should be included in the cost of assets when they are incurred, and the value consumed by them should be transferred to current expenses as they are used. Revenue-generating expenses are treated as expenses in the period in which they are incurred. For example, the purchase of a piece of equipment is worth 50,000 yuan, and it is expected to be used for 10 years. In other words, when this 50,000 yuan expenditure is incurred, we know that its benefits will last for 10 years.

Therefore, when spending 50,000 yuan to purchase this equipment, it should be regarded as capital expenditure in accounting, which is specifically reflected in the "fixed assets" account as its cost; With the use of equipment, its value is gradually transferred to the product, and the cost is gradually converted into expense.

Revenue-generating expenditure refers to the expenditure incurred to obtain the current income, that is, it is only related to the acquisition of the current income. Capital expendituresIt means that the occurrence of the expenditure is not only related to the acquisition of income in the current period, but also to other expensesAccounting periodor primarily for the purpose of obtaining income in subsequent accounting periods.

Capital expenditures are different from cost expenditures, which are made up of operating income in each beneficiary year.

The burden is shared, and the latter is fully compensated by the operating income of the current year. The distinction between capital expenditure and cost expenditure is to correctly reflect the value of the asset and to correctly calculate the profit and loss for each year. If capital expenditure is regarded as revenue expenditure, the result is that the value of assets is undercounted, the current year's expenses are overcounted, and the current year's profits are inflated.

On the contrary, the value of assets is overcounted, the expenses of the current year are undercounted, and the profits of the current year are inflated. In practice, in order to simplify the accounting treatment, sometimes the capital expenditure of less than a certain amount is also treated as a cost expenditure.

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Revenue-generating expenditure refers to the expenditure related to the benefit of the expenditure in the current fiscal year, while the capital expenditure should be capitalized and included in the asset class account first. How should revenue expenditure be distinguished from capital expenditure?

What is the difference between revenue expenditure and capital expenditure?

Revenue-generating expenses are fully compensated by the operating income of the current year, which is recorded as an asset and amortized annually through depreciation or amortization. If the revenue expenditure is regarded as capital expenditure, the result is that the current expenses are undercounted, the asset value is overcounted, and the profits are inflated; On the contrary, the current expenses are overcounted, the asset value is undercounted, and the profits are inflated.

What is the meaning of revenue expenditure?

Revenue expenditure, also known as revenue expenditure, is the symmetry of capital expenditure. It refers to the expenses incurred by the enterprise in the course of operation, and its benefits are only related to the current fiscal year, so they are compensated by the income of the current year. When these expenses are incurred, they should be recorded in the relevant cost account for the current year.

Accounting should strictly distinguish the boundaries of revenue expenditure and capital expenditure to correctly calculate the profit and loss of each period.

Is payroll a revenue expense or a capital expenditure?

According to the relevant provisions of the Accounting Standards for Business Enterprises No. 9 - Employee Remuneration, an enterprise shall recognize the actual short-term remuneration as a liability and include it in the profit or loss for the current period during the accounting period in which the employee provides services to the employee, except for the cost of assets that are required or permitted by other accounting standards.

Therefore, salary expenses are generally included in the current profit or loss or the cost of assets.

1. The wages of the personnel of the management department and the sales department are directly included in the profit and loss, which is a slippery profit-making expenditure.

2. The wages of workers in the production department and the workshop management personnel are included in the production cost and manufacturing expenses, and then carried forward to the cost of finished products, which is a capital expenditure.

3. The loss of capital of the person and employee who constructs or constructs fixed assets is first included in the construction in progress and then transferred to the fixed assets, which is a capital expenditure.

4. The wages of product research and development workers are income expenditures, and the expenses are income expenditures, and those capitalized into intangible assets should be capital expenditures.