ACCOUNTING FOR CAPITAL EXPENDITURE

May 29th, 2015
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Murray State University
Course: general
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What is classed as Capital Expenditure? Expenditure on Assets that: “…are intended for use on a continuing basis in the company’s activities” (Companies Act) “…have physical substance and are held for use in the production or supply of goods and services, for rental to others, or for administrative purposes on a continuing basis…” (FRS 15)

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ACCOUNTING FOR CAPITAL EXPENDITUREWhat is classed as Capital Expenditure? Expenditure on Assets that:are intended for use on a continuing basis in the companys activities (Companies Act)have physical substance and are held for use in the production or supply of goods and services, for rental to others, or for administrative purposes on a continuing basis (FRS 15)Therefore expenditure incurred to acquire long-term assets such as property, plant or equipment should be capitalised. This can include the following: Labour costs of the entitys own employees arising in the construction or acquisition of the asset. The University utilises this definition to charge Project Managers salaries to Capital ProjectsMini-projects comprising invoices of less than 20k (the Universitys materiality threshold below which expenditure would not normally be

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