Discuss the difference between ‘capital’ and ‘revenue’ expenditure and how it relates to Event Management

Discuss the difference between ‘capital’ and ‘revenue’ expenditure and how it relates to Event Management
The difference between capital expenditure and revenue expenditure includes whether purchases are for long-term use or short-term use. Revenue expenditure are usually referred to as going concern expenditure. Capital expenditure is usually a one-time purchase of large amounts of fixed assets to generate income over a longer period of time..Capital expenditure is a major capital investment made by a company to maintain or expand its business and generate additional profits. Capital expenditures are used to purchase long-term assets, such as equipment or manufacturing equipment. As such assets provide the company with income-generating value within a certain period of time, the company shall not deduct all costs of such assets in the year when the expenses are incurred; They must recoup their costs by depreciating each year over the life of the asset. Companies often use debt financing or equity financing to cover the huge costs involved in the acquisition of major assets for business expansion (J.B. Maverick, 2019). Revenue expenditure is a relatively short-term expenditure, which can be divided into two categories: the expenditure generating revenue includes the expenditure needed to meet the continuous operation cost of the operating enterprise, so it is essentially the same as the operating expenditure. Unlike capital expenditures, revenue expenditures can be fully tax-deductible in the year they occur. Maintenance expenditures on revenue-generating assets include general maintenance and repair expenses necessary to maintain the normal operation of the assets without significantly improving or extending the service life of the assets. Revenue related to existing assets includes
maintenance and regular maintenance, as well as repainting and renovation costs. Revenue expenditure can be considered as current expenditure rather than the one-off nature of most capital expenditure (J.B. Maverick, 2019). This is related to event management because there are long-term costs or assets that are long-term expenses and capital expenditures, such as the cost of tables, chairs, silverware, sofas, food, etc. Revenue and expenditure from event management typically include the basics of performing business and event business management. Wages, salaries, commissions, legal fees, marketing and advertising fees, postage, printing fees and other similar fees are the revenue expenditure of the management of activities. Capital income guarantees that the company will continue to operate and provides positive income returns, which will help the company in any event. Revenue expenditures are for short-term purchases, such as suppliers, inventory, anything that can be used for one-time purchases, or small expenditures. Both concepts are important when it comes to activity industries.

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