Capital expenditure is recorded on the balance sheet and whereas repairs and maintenance are expensed to the profit and loss statement.

Capital expenditure is substantial reconstruction, alteration, or replacement of aspects of the property.  Generally, if you replace an item with a different material it is considered capital (unless new materials are used because old materials are unavailable).  Items that cannot be easily removed from a property eg new walls, floor coverings, hot water system, air conditioning, new landscaping and free standing items such as furniture and equipment are capital.  

If the spend increases improves the condition or value of the property it is generally capital in nature.  Also if the expenditure was to meet a requirement of a regulatory body it would often be considered capital.   As a rough guide if it is long term and irregular expenditure it is generally capital in nature.

Repair includes spend for defects, damage, or deterioration (wear and tear) to allow the property to continue to exist in its current state ie good condition and working order.  Work done to make good damage or deterioration that has occurred by ordinary wear and tear.  Wwould include replacement of a part, not the whole unit eg part of a pump not the whole  pump.  As a rough guide occasionally, annual, or twice a year items are generally a repair.

On the Xero Chart of Accounts are the following codes to be used:

3. 710 for equipment
4. 720 for furniture 
5. 730 for improvements to buildings

On the Xero Chart of Accounts are the following codes to be used:

1. 473 for repairs and maintenance

If you have items that are to be used for activity expenses and if under $300 we suggest you use account code 401 Activity Expenses.  This will avoid low- cost assets appearing on the balance sheet.