||Its effect is long term i.e., it is not exhausted within the current account year. Its benefit is enjoyed in future year or years also. In a word, its effect is reduces gradually.
||Its effect is temporary, i.e., it is exhausted within the current accounting year.
||An asset is acquired or the value of an asset is increased as a result result of this expenditure.
||Neither an asset is acquired nor the value of an asset is increased.
||It does not occur again and again – it is non-recurring and irregular.
||It occurs repeatedly – It is recurring and regular.
||Generally, it has physical existence i.e., it can be seen with eyes.
||It has no physical existence, i.e., it cannot be seen with eyes.
||This expenditure improves the position of the concern
||This expenditure helps to maintain the concern
||A portion of this expenditure is shown in the trading and profit and loss account or income and expenditure account as depreciation.
||The whole amount of this expenditure is shown in trading and profit and loss account or income and expense account. But deferred revenue expenditures and prepaid expenses are not shown.
||It appears in balance sheet until its benefit is fully exhausted.
||It does not appear in balance sheet. Deferred revenue expenditure, outstanding expenditure, outstanding expenses and prepaid expenses, however, temporarily shown in the balance sheet.
||It does not reduce the revenue of the concern. Purchase of fixed assets does not effect revenue.
||It reduces revenue. Payment of salaries to employees decreases revenue.