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Why is distinction between capital and revenue important?? .any examples to show how wrong classification can affect the ascertainment of profits?
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Why is distinction between capital and revenue important?? .any exampl...
The time of reaping the benefits - if it is only for a short time, it will be a revenue and vise-versa for capital item say, 
for example, a car can be used for 10 years or so - hence its a capital item.
if you replace a tyre or a part of it, its life is not as long as the car itself - hence its a revenue item.
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Why is distinction between capital and revenue important?? .any examples to show how wrong classification can affect the ascertainment of profits?
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