Free Essay


In: Social Issues

Submitted By 2012989899
Words 2240
Pages 9
I. Introduction According to S. R. Harvey (2004), Public Finance is the branch of economics that studies the taxing and spending activities of government. Public finance refers to government activities including taxing, spending, and budgeting. Government controls the public activities to ensure stabilization of economic. In order to maintain the economic stabilization in the country, there must be budget. Means that budget is important for the government to allocate the expenditure of the country. Budget can be defined as an estimation of income and expenditure for a set period of time. Furthermore, budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another. . According to Ekstein (1973), budget can been define as detail statement of income and expenditure that have been made or expected to be made. There are several function of a budget which is as a policy tool and instrument. Means that, budget is a tangible of a policy decision whereby budget is a means of establishing policy that been accomplished through the budget’s allocation of government resource. Besides that other function of budget is as a management tool whereby almost all government activities are funded through the budget and since the budget is a continuous process it is an effective tool for the public official because it provides an effective management device at every stage of government activity. Means that, any of the activity planned by government will be reflected based from the budget. As example, in Malaysian budget the governments have their annual plan that been proposed projected revenue and propose the expenditure. It consists of revenue and expenditure for 1 year as a short term plan. There is two type of budget which is operating budget and development budget. Besides that, in budget there are two component of budget which is public expenditure and public revenue. Public Expenditure refers to the government expenditure. It is incurred by the Central and State Governments. The public expenditure is incurred on various activities for the welfare of the people and also for the economic development aspect, especially in developing countries whereby to the way of government use their expenditure to the people. As example of the government expenditure is in term of rural development, industrial development and increasing administration cost. All of these activities it may include the government expenditure. After Malaysia became independent from the British rule during 1957, the rural development has always been the most important agenda of national development. There are many strategies and programmers were introduced by government to promote the well-being of rural people ranging from development of the agriculture sector, rural industrialization, resettlement schemes, provision of public facilities and infrastructure to human and community development. In Malaysia in order to develop the rural area there a lot of program to been done by government which is during Tun Razak the program of FELDA. Yet now during our prime minister Datuk Seri Najib Tun Razak have plan a lot of strategies to improving rural development by produce the Rural Development NKRA (RD NKRA) whereby it formerly known as the Rural Basic Infrastructure NKRA which means it’s directly supports the Vision 2020 goal to becoming a high-income nation by transforming rural areas into vibrant economic canters.

II. Research Objective

The objective of this research is to identify the reason for the growth of the public expenditure in Malaysia at the rural development. The improvement that been made by government in order to fulfill the need and demands people in the rural area. Besides that to find the government focus on supporting Malaysia’s rural population by upgrading facilities and infrastructure at rural development.

III. Research Question Based on this research question is to investigate what are the main reasons for the growth of the public expenditure in Malaysia at the rural development. Means that, in term how governments allocate the expenditure in rural development. Besides that to investigate the improvement made by government in order to improve the infrastructure and facilities in the rural area.

IV. Methodology

To compete this research, there must be use some methodology as our finding to complete these mini research. Secondary resources have been use in the mini research. It has been completed by refer to some article and journal which is:

Article i. Rural Development in Malaysia by Ibrahim Ngah ii. Development and Change in Rural Malaysia: The Role of the Village Development Committee by Shamsul A. B

Website i. Government transformation programs. Retrieved from Improving Rural Development website: ii. Kementerian Kemajuan Kawasan Luar Bandar dan Wilayah.Portal Rasmi Kementerian Kemajuan Luar Bandar dan Wilayah.

Newspaper i. More focus on rural infrastructure. (2012, August 11) By News Straits Times.

V. Finding Rural development can be seen as a process of change that been carried out deliberately for the betterment of rural people. This process of change is continuous and yet it is essentially dominant aims in order to achieve certain goals and to solve problems of the rural areas so that they can fulfill needs for the people in rural development. Improving the provision of basic infrastructure for the people living in rural areas is another of the Government’s priorities. Access to basic infrastructure is a fundamental right of all Malaysians. Water, electricity, road and housing infrastructure are important for the population’s health, their socio-cultural advancement and are part of the essential foundations of the Nation’s economy. Based on the rural development there are two phrases will be taken in order to implement these program which is Government Transformation Program (GTP) 1.0 and 2.0 and it cost over RM5 million to implement these programs. The Rural Basic Infrastructure National Key Result Area (RBI NKRA) accomplished much in the GTP 1.0 introduce in year 2010 until 2010 with the Ministry of Rural and Regional Development scoring a number of successes in terms of improving and enhancing the lives of Malaysians in rural communities. The development of infrastructure has improved quality of life and enabled greater access to markets, which will in turn serve to redress socio-cultural and socio economic disparities. There are 4.5 million Malaysians may have benefited from these GTP 1.0 program. Besides that, in these GTP programs the major aims is that needs to be develop in rural area are by increasing access to paved or gravel roads, increasing access to clean or treated water for the rural people, ensuring 24-hour access to electricity in the rural area and yet to building and restoring houses for the rural poor people. Whereby, in these GTP 1.0 program the increased access to paved or gravel roads it may test for this initiative was measured by the percentage of Malaysians living within five kilometers of a paved, gravel road and laterite roads which means by the end of 2012, some 3,147 kilometers of road was completed under this initiative and yet the following percentages of Malaysians now meet the standards set that been planned. Furthermore, in term of increase access to clean or treated water, by owning due these GTP 1.0 by the end 0f 2012, there are 310742 homes in rural area will have get the access with clean water. As example, in Lubok Antu Phase Regional Water Treatment Plant, whereby it will bring cleans water to 5,000 rural villagers by early 2013. Yet, similar with the clean water, having 24-hour access to electricity also the most important part for the people in the rural area in order to get the quality of life. By 2012 they may ensure 93712 houses has been connected these 24 hours electricity. Besides that, in GTP 2.0 it may take in the year 2013 until 2015 whereby the focus of the NKRA will no longer be on rural basic infrastructure alone, but will instead take on the more complete development task of developing rural areas. The aims of these GTP 2.0 is to complete the infrastructure work begun previous in the GTP 1.0 and in order to enhance the economy of the rural areas to ensure that rural people to enjoy similar opportunities as those in the city. Moreover, other mission in this GTP 2.0 is by enhancing rural areas via the 21st Century Village (CV) Programs and Driving Youth Entrepreneurs. In these GTP 2.0 program instead they wanted to complete the infrastructure that work begun in previous plan there are a lot of improvement been made in these P 2.0 programs. Whereby, by achieving the road target requires building and upgrading 6339km of road in Malaysia which is 2618km may new upgrade roads between 2013 to 2015 in peninsular and 1007km in Sabah and 1514 in Sarawak. There are a lot of improvement been made thru these GTP 2.0 program. And yet is same goes to the initiative of access to clean or treated water. By the end of the GTP 1.0, over 99% of Peninsular Malaysia residents possess access to the clean or treated water, meanwhile 79% and 90% of Sabah and Sarawak residents respectively enjoy the same access. Given the challenging importance of clean water, the NKRA aims to raise the latter two percentages to 95% by 2015. This will achieved via the building new connections and alternative water supply to rural areas, and upgrading existing treatment systems in urban and rural areas to cater for expansions. Moreover based on these programs also it include the new program that been introduced to the people whereby 21st Century Village Programs. Based on these programs aim of objective is to encourage youths in rural area to remain in their village and to work and start businesses in their area. Based on this,it may cover several number of economic subsectors that it may include agriculture sector, tourism sector, plantations and also cottage industries as their income and at the same time it can attract people outside to came to their area. There is an estimated that over 37,800 households yet also 189,000 persons is expected to get this benefit from this GTP 2.0 programs. In these 21CVs programs also it will be based on the villages that have available land and the villages with successful cooperatives operating businesses whereby the villages that have potential and unique resources that can be developed into a sustainable rural business.

VI. Discussion and conclusion As a conclusion it can be conclude that there are a lot of improvement been made by the government in order to fulfill the necessities need by the rural people. There are a lot of different made by the government to develop the rural development since our country get independent by the British 1957. Rural development always had been the most important agenda of national development. According (Ibrahim Ngah, 2010) a large scale and integrated approach of intervention was undertaken during the NEP period of 1970-1990, which addressed both the improvement of the living conditions of the existing villages and the relocation of the rural populace to new land development schemes. It same goes to our new government transformation in order to improve the rural develop by step by step to ensure that the rural development run smoothly and the people in the rural area may get the enjoy a better standard of living The process of change is continuous and yet it’s essentially have the aims to achieve certain goals and to solve problems that been face by the people in rural areas. Based from this process it may induced change that be made by the state itself and from this rural development activities can be covered by several elements such as planning, implementation, monitoring and involved multi-disciplinary action such as state agencies, the private sector, NGOs and the general public in order to ensure these rural development can be success and give a lot of benefit to the people. In term of the expenditure been used there is a sum of RM 5 billion was allocated to improve these rural development program. Based on this amount RM1.8 billion was provided for the rural road program and also village link road project road project. Means that in these programs a road network of 1350km will be constructed in Peninsular, Sabah and Sarawak Besides that, other RM2.1 billion was allocate for the expansion of potable water supply to the people at the rural area may get the facilities of getting a clean water supply Moreover, there is RM1.1 billion was been allocate in term of electricity supply whereby people in rural area also may get 24 hours electric supply. Whereby RM590 million was expended benefiting 9640 houses in these rural area including Sabah and Sarawak. VII. Reference Kementerian Kemajuan Kawasan Luar Bandar dan Wilayah. (n.d.). Portal Rasmi Kementerian Kemajuan Luar Bandar dan Wilayah. Retrieved , from

More focus on rural infrastructure. (2012, August 11). News Straits Times. Retrieved from http://

Ngah, I. (2010, December 1). Rural development in Malaysia. UTM Sustainability Research Alliance. Retrieved , from

Performance Management & Delivery Unit (PEMANDU), (2011). Goverment transformation programs. Retrieved from Improving Rural Development website:

Shamsul, A. (n.d). Development and Change in Rural Malaysia: The Role of the Village Development Committee .…...

Similar Documents

Premium Essay

The Expenditure Cycle

...I am going to describe the testing for control over the expenditure cycle. The expenditure cycle starts with the purchase requisition. The department in need of the service or assets sends a properly approved, serially numbered requisition to the purchasing department. The risk associated with the purchase requisition is that anyone could potentially make a purchase requisition order for any kind of amount. Therefore, to mitigate a risk associated with the purchase requisition, it is very important to have the right personnel to approve the purchase order. When I tested the expenditure cycle, I randomly chose the purchase requisition and I followed every step associated with that cycle and in In addition, I documented every step of my testing by describing every significant detail related to my testing. Also, I performed walkthrough by talking to the right personnel and asking them questions associated with my testing. That help me not only to better understand the entity’s business cycle but made my testing more reliable since I could determine appropriate segregation of duties among the personnel. The purchasing department should place the order after giving proper consideration to the time and quantity to order. The purchasing department should also obtain competitive bids from various suppliers to make sure the best price is obtained. The purchase order is issued only after proper approval. For the internal control purposes, it is best that prenumbered purchase......

Words: 318 - Pages: 2

Premium Essay

Healthcare and Defence Expenditure

...ICFAI UNIVERSITY HYDERABAD A COMPREHENSIVE STUDY OF HEALTH CARE EXPENDITURE AND DEFENSE EXPENDITURE IN AN ECONOMY Submitted to - Dr. S Venkata Seshaiah SUBMITTED BY: SANYAM SHARMA (69) RAHUL DUGAR (50) NILAYBUCHA M (22) Date: 10-November 2012 Batch: (2012-2014) MBA Section: B SYNOPSIS Introduction This paper will examine what impact will defence expenditure and health care expenditure will have on India’s Gross Domestic Product (GDP). The paper will focuses on the 5 countries India, China, Norway, UK and the United States as models to develop a case. It would illustrate the data on health care and defence expenditure of following countries. Motivation Through the study we are analysing the health and defence expenditure patterns, which is very important for any country, of 5 different countries which belong to diversified economic classes and how this is impacting their economy and society. OBJECTIVE Knowing the importance of the following expenditures for an economy and society as a whole, evaluating the relevance of expenditures based on various parameters such population, poverty, security threats, corruption etc. of the following economies. METHODOLOGY Analytical research using secondary data from internet, journals and published papers. Plan of action Secondary data collection through various sources. Study of data and its analysis. Preparation of......

Words: 260 - Pages: 2

Premium Essay

Health Care Expenditure

...Christina Calderon HCS 440 December 8, 2012 John Branner/ Instructor Healthcare Expenditure Healthcare in the United States can be a controversial issue and individual’s views differ from the policymakers. The controversial issue is some agree with the money being spent and some do not agree with the money being spent on Healthcare. This paper will be discussing to support of healthcare expenditure and how it is necessary for the American population. Current Level of National Healthcare Expenditures: Healthcare costs have been one of the most expensive things and is still continuing to be expensive. It cost patients over $8,000 dollars for each patient per year, which is more than double of other nations. Staying healthy in the United States has its sacrifices and do so is very expensive. In fact, in 2009, the average annual cost of health care was $7,960 dollars per person which is two and a half times what it was in Japan for the same year ("Healthcare Expenditure", 2012) 15%to 25% of the American population has no healthcare coverage due to a lack of any form of universal health care America spent $2.6 trillion dollars on health care in 2011; about one in every six dollars went into the healthcare system (Kliff, 2012). A third of that spending $750 billion did nothing to make anyone healthier. That $750 billion was just wasteful and who knows where it was spent. Spending Too Much or Not Enough? I think the United States takes advantage of the opportunity......

Words: 1119 - Pages: 5

Premium Essay

Capital Expenditure

...DEFINITION OF EXPENDITURE FOR CAPITAL PURPOSES Previous Definition in Financial Procedure Rules The previous definition of capital expenditure was set out in Part IV of the Local Government and Housing Act 1989. All capital expenditure and financing must be in accordance with the provisions of the LGHA 1989 and the Local Authorities (Capital Finance) Regulations 1997. No leasing or credit arrangement as defined by the LA(CF)R 1997 shall be entered into without the approval of the Director of Finance. Any service using an asset will be charged with a cost of capital employed which represents interest foregone in owning the asset and depreciation, representing the proportion of the asset’s useful life consumed in the year in question. Current Position The LGHA has now effectively been replaced by the Local Government Act 2003 which defines capital expenditure as ‘expenditure that falls to be capitalised under proper practices’. It then goes on to define proper practices as meaning the CIPFA Recommended Practice (SORP) and any specific legislation. Specific legislation relating to capital expenditure tends to be defined in various Capital Finance Regulations. The SORP definition of capital expenditure is therefore supported by statute. However, it does not have a single definition of capital expenditure, but includes references to capitalising expenditure in various parts of the SORP. In the Fixed Assets section of the SORP expenditure that should be...

Words: 388 - Pages: 2

Premium Essay


...Under United States income tax law, to make a deduction in the current taxable year, a taxpayer must be able to show that a particular cost is a business expense[1] (but not an expense related to personal activities)[2] and not a capital expenditure.[3] Capital expenditures either create cost basis or add to a preexisting cost basis and cannot be deducted in the year the taxpayer pays or incurs the expenditure.[4] In terms of its accounting treatment, an expense is recorded immediately and impacts directly the income statement of the company, reducing its net profit. In contrast, a capital expenditure is capitalized, recorded as an asset and depreciated over time. Contents [hide] 1 Four ways costs can be capital expenditures 2 Illustrative Example 3 See also 4 References 5 External links Four ways costs can be capital expenditures[edit] The Internal Revenue Code, Treasury Regulations (including new regulations proposed in 2006), and case law set forth a series of guidelines that help to distinguish expenses from capital expenditures, although in reality distinguishing between these two types of costs can be extremely difficult. In general, four types of costs related to tangible property must be capitalized:[5] 1. Costs that produce a benefit that will last substantially beyond the end of the taxable year.[6] 2. New assets that have a useful life substantially beyond one year.[3] For example, in Commissioner v. Idaho Power Co.,[7] the taxpayer used its own......

Words: 648 - Pages: 3

Premium Essay

Capital Expenditures About Ted

...Surgery Unit Director who is getting ready to prepare a capital expenditure funding program for the coming year. His unit is too small and is running at over 90% capacity, so Ted wants more room. On the other hand, a cardiology surgeon at the hospital wants to create a new cardiac surgery program that would require extensive funding for new state-of-the-art equipment. Therefore, the surgeon has been campaigning with the hospital board members (Baker & Baker, 2011). Furthermore, Ted will need valuable information and will need to have a great strategy to prepare the capital expenditure funding program. Baker & Baker (2011) explains, “Capital expenditures involve the acquisition of assets that are long lasting, such as equipment, buildings, and land. Therefore, capital expenditure budgets are usually intended to plan, monitor, and control long-term financial issues” (p. 177, para 1). While Ted is preparing a capital expenditure budget proposal, there are four requests he should ask for upon creating the proposal. First and foremost, Ted should compose a timeline to show when his unit will open along with justification of the need for the proposal based on firm estimates of future needs (Department of Premier and Cabinet, December 2010, p. 9). A timeline will be able to let the others see his plan more clearly. In addition, Ted should also ask for the hospital’s guidelines and criteria for preparing a capital expenditure funding program. Baker & Baker (2011) states, “Some......

Words: 860 - Pages: 4

Premium Essay

Comparing Capital Expenditures

...Comparing Capital Expenditures In certain industries there are clear leaders. For example, Wal-Mart is a clear leader in the retail industry and Google is a clear leader in search engines. But with smaller companies find ways to thrive in those giant’s shadows. Competition in the coffee industry is hard to distinguish at times, but Starbucks is a brand name that stands out on its own. Coffee competitors have done a good job of differentiating themselves by using environments and product mix. Coffee is the second largest U.S. import, and specialty coffee is forecasted to be an $11 billion dollar a year industry. In order to strive in this industry, companies must have the appropriate buildings, properties and equipment. Capital Expenditures are the cash that is used to buy, revamp or upgrade these physical assets. Capital expenditures are forecasted using CapEx % of gross profits and are allocated proportionally to each division based on the gross margin. This paper will compare the capital expenditures of Dunkin Brands and the Starbucks Corporation (Fig.1). Direct Competitor Comparison SBUX DNKN Market Cap: 49.50B 4.42B Employees: 160,000 1,104 Qtrly Rev Growth (yoy): 0.11 0.06 Revenue (ttm): 14.02B 667.67M Gross Margin (ttm): 0.57 0.79 EBITDA (ttm): 2.59B 313.12M Operating Margin (ttm): 0.14 0.39 Net Income (ttm): 1.51B 106.11M EPS (ttm): 1.97 0.94 P/E (ttm): 33.59 44.29 PEG (5 yr expected): 1.61 1.72 P/S......

Words: 1089 - Pages: 5

Free Essay

Human Resources-Assets or Expenditures

...Human resources - Expenditures or Assets? In my opinion employees are both expenditures and assets of a company, but it is recommended that they should be considered to be assets. On the one hand, when we think of compensations and benefits, it can not be denied that employees are expenses to be managed. A company has to pay their employees certain amount of money so that they can use their labor. It is like the telephone bills, or electricity bills or office supplies that we have to settle. Besides salary or wages, they need to offer employees fringe benefits. There can be other expenses that they have to pay if they want to keep employees. On the other hand, employees are assets for several reasons. First of all, they are tied to a company through a contract, and when the contract is signed they belong to the company and the company can use their resources. The company can own their contributions expressed through their knowledge, skills, experience, and relationships. Second, when one is employed he or she is used for certain purpose; he is assigned tasks, obey the boss. More importantly, "Assets" does not only mean "possession", it also implies the preservation and development. Any manager may want their assets to become more valuable, i.e. becoming more productive and profitable for the company. If a manager treats employees as expenses only, he will try to keep cost low by many ways like offering lowstarting salaries, choosing not to fill empty positions...

Words: 386 - Pages: 2

Premium Essay

Expenditure and Revenue

...Expenditures and Revenues Summary: Palm Beach Sheriff’s Office Bianca Gerena AJS 522 Paula May May 26, 2014 Expenditures and Revenues Summary: Palm Beach Sheriff’s Office The Palm Beach Sheriff’s Office, a statutory government agency, is responsible for providing services to three mandated programs in Palm Beach County, Florida (, 2013). Those programs are Law Enforcement, Corrections Services throughout Palm Beach County’s jails, and finally Bailiff and Court staff. Palm Beach Sheriff’s office is required to respond to law enforcement calls throughout the county and all unincorporated areas of Palm Beach County. Palm Beach Sheriff’s office is also responsible for providing services to certain municipalities throughout Palm Beach County, if a contract exists between the municipality and the Sheriff’s office. The municipality must come to a fee agreement with the Palm Beach Sheriff’s office before a contract is established. The following will elaborate on the Palm Beach Sheriff’s Office revenue and expenditures and the impact of the expenditures on the revenue source. The following will also elaborate on who the key players are in terms of making budget decisions and whether or not there is any influence of political and public policies on the Palm Beach Sheriff’s Office. Finally, recommended organizational financial analysis alternatives for the Palm Beach Sheriff’s Office will be researched. The Impact of the Expenditures on the Revenue Source Palm Beach......

Words: 1743 - Pages: 7

Premium Essay

Qualified Rehabilitation Expenditures

...Rehabilitation Expenditures Date: June 7, 2014 Executive Summary: Case three was centered around two key debates falling under IRC §47. The first was whether or not moving a building was basis enough for disallowing rehabilitation expenditures credit and the second was whether the expenses incurred in moving the building qualify as qualified rehabilitation expenditures. The taxpayer’s defense in this case was built largely on the stance that statutory language was misaligned with original Congressional intent and that the IRS was interpreting the original legislation too narrowly. I agreed with the Taxpayer’s view in this case thanks in large part to the relevant Nalle case decision she cited and the precedential value it had coming from the U.S. Court of Appeals. The taxpayer also presented numerous similar cases of instances in which regulations were misaligned with original congressional intent. Although I side with the taxpayer in the form of the $3,000 rehabilitation expenditures credit, I agree with the IRS’s stance that the moving expenses are not qualified rehabilitation expenditures. I agree with the IRS because of their ability to provide a relevant Supreme Court decision that showed the moving expenses should be capitalized as part of the acquisition cost- basis of the building and thus not allowed as rehabilitation expenditures since acquisition costs are disallowed from qualified rehabilitation expenditures. Facts: ......

Words: 1697 - Pages: 7

Premium Essay

Revenue Expenditures

...Revenue Expenditures & Capital Expenditures Tracey DeSautel November 1, 2014 University of Phoenix XACC/291 In the world of accounting, there are numerous types of expenses that come along with running a business on a day to day basis as well as overall. There are things that break down and add value to the companies assets as well as things that are expensed to run the business on a daily basis. These can break down to two important items and those are Revenue expenditures and Capital Expenditures. Revenue expenditures is the amount that is expensed immediately. Thereby being matched with revenues of the current accounting period. Examples include things such as routine repairs because they are charged to a direct account such as “ repairs and maintenances expenses> these do not extend the life or improve the assets for the company. Capital expenditures are amounts spent to acquire or improve a long term asset. These can be things such as buildings or even equipment. These are usually recorded in accounts classified as “ property, plants and equipment”. These are charged to depreciation expense over the assets lifespan. It breaks down to capital expenditures are for items such as machinery and buildings where as revenue expenditures are for things that create revenue such as advertising and labor. A further look into capital expenditures and examples are that, that do not occur in daily transactions for the company and include such purchases that may include the...

Words: 354 - Pages: 2

Premium Essay

Revenue and Capital Expenditures

...Revenue and capital expenditure are aspects of business management that seem very similar at first. Both revenue and capital expenditure are purely focused on the process of spending money to help a business survive and grow. The key difference between the two is the intention of the expenses and the direction of the money flow. Revenue is for short-term costs that are not used afterwards to make the company grow, such as repairs which are most common. Capital expenditure is for assets that are considered or categorized long-term, such as new vehicles or software, which will be used to make the company stronger. Revenue expenditure is money being spent immediately and exclusively for short-term purposes. These are expenses associated with profit-producing assets, such as repair, that may or may not increase the life of the given asset. Revenue expenditure is more often associated with day-to-day costs the company accrues through its life cycle. Capital expenditure is money is being spent on assets that will increase the company’s ability to pull in profit or operate at a higher performance level. New software technology, vehicles, machinery and tools that will be used for at least 12 months are considered capital expenditure. Capital expenditure, unlike revenue, is looked at more as an investment than a cost, because it is being used to strengthen the company so it can do better business. When purchasing a capital asset, a business either will spread the cost out over the......

Words: 456 - Pages: 2

Premium Essay

Capital and Revenue Expenditures

...Capital and Revenue Expenditures 1 Capital and Revenue Expenditures Clarissa Jude April 24, 2015 University of Phoenix Capital and Revenue Expenditures 2 “A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset. A revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current accounting period. Routine repairs are revenue expenditures because they are charged directly to an account such as Repairs and Maintenance Expense. Even significant repairs that do not extend the life of the asset or do not improve the asset (the repairs merely return the asset back to its previous condition) are revenue expenditures.” (Wizell, John, Accounting Made Easy. 2010). This in summary means that every cost to purchase, keep up and maintain said purchase will be reported in the financial documents. The difference between capital and revenue expenditures are: Capital Expenditures | Revenue Expenditures | 1 | Its effect is long term i.e., it is not exhausted within the current account year. Its benefit is enjoyed in future year or years also. In a word, its effect is reduces gradually. | 1 | Its effect is temporary, i.e., it is......

Words: 504 - Pages: 3

Premium Essay

Government Expenditure and Revenue

...Government Expenditure and Revenue by Ooi Soon Beng After studying this chapter, you should be able to understand:  Public Budget  Budget Deficits and Surplus  Expansionary and Contractionary Fiscal Policy  Discretionary and Automatic Fiscal Policy  National Debts and Its Issues and Misconceptions  Problems with Fiscal Policy : Macroeconomics According to Keynes, government has to intervene to stabilize the economy. Stabilization can be achieved in part by manipulating the Public Budget to increase output and employment or to reduce inflation. The Budget outlines the government’s taxation and expenditure plans for the coming fiscal year. The Ministry of Finance are responsible for the preparation of the budget. Sources of Revenues:  Direct taxes on individuals and companies  Indirect taxes on goods and services (gasoline, alcohol, tobacco, etc)  Non-tax revenue (stamp duty, licenses, permits, etc) Malaysia: Sources of Revenue (in RM) 1990 2013 2014 Direct Taxes 35.2% 56.5% 59.1% Indirect Taxes 36.7% 16.6% 17.2% Non-Tax Revenue 28.0% 26.9% 23.7% Total Revenue 29,521m 207,913m 224,094m Source: Ministry of Finance Categories of Expenses:  Operating Expenditure (emolument, pensions, debt servicing, grant to states, subsidies, supplies, scholarships, etc)  Development Expenditure (security, social services, economic services, expenditure on......

Words: 2314 - Pages: 10

Premium Essay

Influencing Factors of Healthcare Expenditure

...Care Expenditure: Opportunities to Improve Canada’s Statistics [Authors Name] [Institutional Affiliation(s)] Author Note [Include any grant/funding information and a complete correspondence address.] Table of Contents Introduction………………………………………………………………………………2 Comparing Health System Performance…………………………………………………4 Sweden’s Healthcare Policy Framework………………………………………………...8 Canada’s Opportunities for Improvement………………………………………………..9 Conclusion……………………………………………………………………………….11 References……………………………………………………………………………….13 Influencing Factors of Health Care Expenditure: Opportunities to Improve Canada’s Statistics Globally, the number of variations that contribute to the government’s financial contribution to the health care system is great and ever changing. The amount of money spent on health expenditures varies as well, and is specific to each country. In countries with a high income, such as the United States and France, the per capita health expenditure averages over 3,000 USD, while in countries that are considered resource poor, such as Israel and Mexico, the average per capita amount is only 30 USD. (Ke, Saksena, & Holly, 2011). Wide variations in health expenditure are also specific to each country’s economic development. Less resourceful countries have been noted to only spend less than 3% of GDP on health, while other, more economically developed countries spend more than 12% of GDP on health. (Ke et al.,2011). The growth of health expenditures in......

Words: 2715 - Pages: 11