✔ 最佳答案
The key factor is whether the expenditure will generate positive cashflow over 1 year. If the expenditure can generate positive cashflow over 1 year, e.g. a piece of machinery, it is classified as assets. Otherwise, it is an expense.
The classificaiton will affect both balance sheet and profit and loss accounts. Some company wants to show higher profits will then capitalize expenditure as assets as mush as possible.