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Significant repairs to a fixed asset that "significantly increases its life" should be classified as:
AProvision
BRevenue expenditure
CDeferred revenue expenditure
DCapital expenditure
Answer & Solution
Correct answer: D. Capital expenditure
1. Per OCR: "significant repairs to a fixed or non-current assets that significantly increases its life" listed as capital expenditure example.
2. Tied to long-term benefit + increase in asset value.
3. Capitalised, then depreciated.
_Source: ICMAI BoS CMA Foundation Paper 2 (FFCA) — Paper2_07042026.pdf, Module 1 §1.3.1 (page 20)_