08-05-2011, 01:13 PM
In accounting, what is the difference between âRenovationâ (fixed assets) and âRepair and maintenanceâ (Profit and Loss expense)?
What kind of expenditure can you classed under each of these? How do I know what I can capitalize (renovation) and what I can write off in the current year (R&M)?
I heard that Renovation is expenditure that can add value to a business property and/or prolong the property's life.
If the expenditure is for a building that is rented and not owned by a business, then it is NOT adding value to the business since the property is not owned by the company, right?
What kind of expenditure can you classed under each of these? How do I know what I can capitalize (renovation) and what I can write off in the current year (R&M)?
I heard that Renovation is expenditure that can add value to a business property and/or prolong the property's life.
If the expenditure is for a building that is rented and not owned by a business, then it is NOT adding value to the business since the property is not owned by the company, right?