capitalizing


Also found in: Dictionary, Thesaurus, Legal, Wikipedia.

Capitalize

In accounting, to recognize expenses on long-term liabilities over a long period of time. This allows a company to spread out its expenses so they do not appear to reduce profits at any particular time. For example, a company may have a $1 million profit and a $1 million loan to acquire machinery for its factory. If it does not capitalize the loan, its balance sheet will show no profit for that year. Capitalizing the loan allows the company to recognize the liability over a certain period, usually the usable life of the machinery.

capitalizing

the process of converting an expense into an equivalent capital sum, carrying forward that expense as a FIXED ASSET in the BALANCE SHEET of a firm rather than writing off that expense as a current cost. Capitalization is applied to expenditure on assets that have been acquired for use in the business for periods in excess of a year and which are not for resale, for example motor vehicles, plant, machinery, equipment, land and buildings, patents, goodwill, trademarks, brands etc.
References in periodicals archive ?
It seems to me that capitalizing His Word is meant to designate some special status, some special respect.
As I expected, the Stylebook called for capitalizing internet, but its definition of the word seemed to favor my interpretation: "A decentralized network of host computers that are linked by high-speed lines.
TEI believes that taxpayers should be given the opportunity to weigh the risk of possibly capitalizing more interest than is required by the regulations using a FAS No.
For those taxpayers capitalizing their loan origination costs, the Service is not likely to accept any requests to change accounting methods at this time.
16 says entities that engage in purchase acquisitions may include certain associated costs in the acquisition price, thereby capitalizing the costs rather than deducting them from income as an expense in the current period.
97-35 goes to great lengths to describe the Service's position on capitalizing and amortizing package design costs.
com) has announced the addition of Maximizing Prescribing Opportunities: Capitalizing on Primary and Secondary Care to their offering
95-19 to provide automatic consent for taxpayers to change their method of capitalizing interest to a method in conformity with the final regulations.
We have now confirmed that our historical method of capitalizing and amortizing advertising costs is correct, and that there are no acceptable alternatives going forward.
High net worth individuals who incur significant portfolio management fees may be able to avoid potential disallowance of the expenses by capitalizing the fees and deducting the costs as assets are sold.
Elston added, "PPG clearly recognizes the power of innovation, and they are actively investing in solutions that demonstrate their commitment to capitalizing on new market opportunities.