capitalizing


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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 ?
One hopes that, as the FASB tackles lease accounting, it recognizes that there are many types of leases that reflect truly legitimate business objectives, and that the ultimate goals of more meaningful and useful financial statements, simplicity and cost/benefit may not be achieved by capitalizing all leases without judgment.
So capitalizing His Word seems to be an exception to all the rules.
is a cutting edge entertainment and digital media group capitalizing on the global convergence of the traditional entertainment industry and the "participatory pop culture" revolution of online communities and digital technology.
263(a)-4(f)(vi), an accrual-method taxpayer must still wait until a liability is incurred before capitalizing or deducting prepayments.
in London wrote, "I think you are correct in not capitalizing internet or the web.
Capitalizing remediation expenditures, on the other hand, would distort current period net income and future period net income because there is no relationship between the income-producing activity and discharging the liability for the clean-up expenditure.
Capitalizing intenet reminds me of 18th-century writers who would sprinkle capitalized words throughout their work--such as Honor or Shame or the Four Humors so popular in medieval physiology.
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.
explains the SEC's actions are important because they show what the SEC considers to be the limits on capitalizing costs connected with an acquisition under Accounting Principles Board Opinion no.
Its pre-charge off process is designed to retain valuable fee paying customers by capitalizing on its ability to provide third-party intervention.
Presumably, the financial accounting standard of capitalizing these costs drew the Service's attention, as it provided a convenient argument and numeric support for applying these capitalization principles for tax purposes.