Question

Renewal fee for patents or Patent Rights is a _______________.

• A. Capital expenditure
• B. Revenue expenditure
• C. Deferred revenue expenditure
• D. Development expenditure

Answer 1

The correct option is B Revenue expenditure

Capital expenditure - Capital expenditure means money spent by a business or organisation on acquiring or maintaining fixed assets, such as land, building, vehicles, equipment etc. Fixed assets also include intangible assets such as patent rights, goodwill, copyright etc.

Therefore, amount spent for acquiring patents right is a capital expenditure.

Patents right are given for a fixed period of time and after the expiry of that period one has to get them renew by paying renewal fee, therefore, renewal fee for patents or patents right is a revenue expenditure.