A revenue expenditure is deducted from the cost of the asset.

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A revenue expenditure is an expense incurred in the normal course of business to maintain or operate an asset, while the cost of the asset represents the initial amount paid to acquire or construct it. Revenue expenditures are generally not capitalized (added to the cost of the asset) but are rather treated as expenses that reduce the current period's income or profit. Therefore, they are not deductible from the cost of the asset. Only capital expenditures that improve or extend the useful life of an asset can be added to the asset's cost and depreciated over time.

A Revenue Expenditure Is Deducted from the Cost of the Asset