Both revenue and capital expenditure are concerned with spending money to help a business survive and grow. The key difference between the two is the intent of the expenses and where the money goes.
Contact Us Farming expenditure and allowances Expenditure and losses incurred for purposes of trade, that do not qualify as a deduction under the First Schedule, may be claimed under other provisions of the Act provided they meet the requirements of the particular provision.
In addition, expenditure and losses must be claimed during the year of assessment in which they are actually incurred.
Section 23 g prohibits the deduction of moneys not expended for the purposes of trade. This list is not exhaustive and the facts of each case will dictate which items of expenditure qualify as a deduction under section 11 a.
Capital allowances Capital expenditure, which does not qualify as a deduction under paragraph 12, may qualify for a deduction under one of the other capital allowance provisions in the Act. Depending on the nature of the particular asset and the context in which it is used, the provisions which are likely to be of relevance in the context of game farming are section 12B, 12C or 11 e and in respect of buildings, section 13bis, 13quin or 13sept.
The different capital allowance provisions are not discussed in detail in this Note. However given its particular relevance to farming operations, section 12B is briefly discussed below.
Equipment used by game farmers that would generally qualify for the special allowance under section 12B includes, for example, vehicles, firearms, meat saws and two-way radios. This list does not limit the qualifying assets and each asset must be considered on its own merits.
The following assets are specifically excluded from section 12B: An asset that does not qualify under section 12B may still qualify for an allowance under another provision of the Act.
For example, if a game farmer also runs a game lodge business, the capital assets used in that business such as beds, furniture, refrigerators and stoves would not be considered to be used for farming operations and would not qualify for an allowance under section 12B.
An allowance under section 12B would also not be available for certain assets used in the farming operations such as aircraft used for the counting of game and office equipment as those assets are specifically excluded.
The taxpayer may, however, qualify for a depreciation allowance under section 12C in some instances and in other instances under section 11 e. The deductions allowed under sections 11 e12B and 12C are included in the income of the taxpayer if subsequently recovered or recouped under section 8 4 a.
These deductions must also be taken into account when determining whether any deduction under section 11 o is available on the alienation, destruction or loss of a depreciable asset.INLAND REVENUE BOARD OF MALAYSIA QUALIFYING EXPENDITURE AND COMPUTATION OF CAPITAL ALLOWANCES Public Ruling No.
6/ Date Of Publication: 27 August Example: State with reasons whether the fallowing items of expenditure are capital or revenue. (i) Wages paid on the purchase of goods.
Statistics on revenue expenditure and financing. The most recent forms and guidance notes are available on the local government finance forms page. The difference between capital expenditure and revenue expenditure are expained in tabular form.
The first and foremost difference between the two is, Capital expenditure generates future economic benefits, but the Revenue expenditure generates benefit for the current year only. Revenue expenditures - definition, explanation, and exaples of capital expenditures.
A detailed article. A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.
By doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period. This yields the most accurate income statement results.
There are two.