Types of expenditure

Businesses have distinct types of expenditure. Again, they can be classified into two types, namely capital expenditure, and revenue expenditure.

Capital expenditure is spent on non-current assets that are used over the long term in the business and to improve the business.

• Tangible assets – assets you can see and touch, e.g. land, buildings, machinery, equipment, vehicles and fixtures and fittings
• Intangible assets – assets you cannot see or touch, e.g. a brand name or intellectual property