Question

recognition of expenditure as an asset or expenses with reference to the AASB conceptual framework

Answer 1

As per AASB conceptual framework, an expenditure is recognised as an asset if it fulfils the following criteria-

1) it is probable that there will be flow of future economic benefits related to such item, to or from the entity.

2) The cost of such an item can be measured reliably.

Expenses are recognised when there is a decrease in the future economic benefits in relation to a decrease in an asset or an increase in a liability and which can be reliably measured.