To compute, appraise, or assess the capital value of (a patent right, an annuity, etc.)
The act of classifying an expenditure as an asset, which allows the asset to be allocated (depreciated) over multiple time periods where benefit is derived.
To record an expenditure that may benefit a future period as an asset rather than to treat the expenditure as an expense of the current period.
To treat certain expenditures as capital expenditures for Federal income tax computations.
To treat an item of expenditure as the purchase of asset rather than as an expense.
consider expenditures as capital assets rather than expenses
To place in service as a long-term asset. These assets are expected to be used by the institution for a period in excess of one year (e.g., land, buildings or patents).
The recording of an expenditure as an asset rather than an expense which is then written off over time.
Recording an expenditure initially as an asset on the balance sheet rather than as an earnings statement expense, and then writing it off or amortizing it (as an earnings statement expense) over a period of years. Examples include capitalized leases, interest, and research and development.
Term meaning that a cost item is recorded as an asset on the balance sheet instead of on the income statement. Some companies use this device to manipulate earnings and make the company look more profitable than it really is.
To provide funding for or, in accounting, a procedure that records expenditures as capital assets on the books instead of being charged as an expense.
In standard contracts of leasing companies, the leased object is the property of the lessor in economic, legal and tax respects. The lessor capitalizes it as an asset so it will be subject to depreciation and amortization for tax purposes. The lessee (renter) does not capitalize the object. If, however, the leasing object is attributed to the lessee, i.e. barring the existence of criteria in the corresponding leasing remission in the leasing contract, the lessee capitalizes the object. The lessor must then enter the corresponding sales price in his accounts.
1. to estimate the present lump sum value of an income stream. 2. to set up the cost of an asset on financial records.
to capitalize means to record an expenditure on the balance sheet as an asset, to be amortized over the future. The opposite is to expense. For example, research expenditures can be capitalized or expensed. If expensed, they are charged against income when the expenditure occurs. If capitalized, the expenditure is charged against income over a period of time usually related to the life of the products or services created by the research.
To treat an expenditure as an asset; or to compute the present value of a future payment that will be paid over a period of time.
To turn into capital. Companies sometimes capitalise expenditure and treat it as a balance sheet asset to be depreciated over a number of years rather than charge it all aginst the current yearâ€™s income statement. For example, many companies capitalise expenditure on R&D.
(Accounting Usage) - To charge an expenditure to an asset account because it benefits a period in excess of one year. For example, a betterment to a machine would be capitalized to the machinery account.
record capital outlays as additions to asset accounts, not as expenses.
The process of adding the cost of acquiring a capital asset to a capital account. Depending on the nature of the asset, the capitalized amount may be recoverable through amortization, depletion, depreciation, or only through sale or exchange. Also see “Amortize,” “Capital account,” “Capital asset,” “Capital cost,” “Depletion,” and “Depreciation.
(1) For accounting purposes: to record an outlay as an asset (vs. Expense) which is subject to depreciation or amortization. See: Depreciation, Amortization. (2) In general, to take advantage of an opportunity.
To record an expense, such as deferred acquisition costs, as an asset.
To record an expenditure that may benefit future periods as an asset rather than as an expense to be charged off in the period of its occurrence.
To record an outlay as an asset (as opposed to an Expense), which is subject to depreciation or amortization.
Recording of an expenditure having a benefit of more than one year to the cost of a property such as a new kitchen or new roof. Upon sale of the property, the gain or loss, for tax purposes, is the difference between the selling price and the adjusted cost basis. If used for business, depreciation on the capital improvements may be deductible for tax purposes.
An accounting method that records an outlay as an Asset (vs. Expense) that is subject to depreciation or amortization. See also: Depreciation; Amortization.
To include in the cost of an asset. For example, the interest incurred by a company when it constructs its own building is added to the cost of the building's components. This is referred to as capitalizing the interest, or capitalization of interest. To Top