A capital expenditure is an amount spent to acquire or 
improve a long-term asset such as equipment or buildings. 
Usually the cost is recorded in an account classified as 
Property, Plant and Equipment.

A revenue expenditure is an amount that is expensed 
immediately—thereby being matched with revenues of the 
current accounting period. Routine repairs are revenue 
expenditures because they are charged directly to an 
account such as Repairs and Maintenance Expense. Even 
significant repairs that do not extend the life of the 
asset or do not improve the asset (the repairs merely 
return the asset back to its previous condition) are 
revenue expenditures.