Let us take an automotive example and look at it a little more closely in the context of revenue expenditures and capital expenditures. I work for a utility company with large bucket trucks that have significant value and very long useful lives.

Regular maintenance such as oil changes or a new paint job should be considered revenue expenditures. However, if the motor in the bucket truck died and a brand-new motor were put into the bucket truck, would this be a capital expenditure or revenue expenditure? Does the new motor extend the useful life of the truck?

What if the bucket mechanism on the truck becomes faulty and is replaced with a new bucket mechanism, does this extend the useful life of the truck?