To classify a cost as a long-term investment, rather than charging it to current operations. A capitalized cost does not appear on the income statement, but instead appears as a debit on the long-term assets account and a credit on the cash account of the balance sheet. However, the depreciation expense related to the capitalized cost will appear as an expense on the income statement. Since the long-term assets account is larger due to the effect of capitalization, the depreciation costs are also proportionately larger. Thus, the timing of expense recognition is changed, but eventually all expenses do get recognized on the income statement.
Related information about capitalize:
- Capitalize - Merriam-Webster Online
cap·i·tal·ize. verb \ˈka-pə-tə-ˌlīz, ˈkap-tə-, British also kə-ˈpi-tə-\. cap·i·tal·ized cap·i·tal·iz·ing. Definition of CAPITALIZE. transitive verb. 1. : to write or print with ...
- Capitalize Definition | Investopedia
An accounting method used to delay the recognition of expenses by recording the expense as long-term assets. In general, capitalizing expenses is beneficial ...
- capitalize - definition of capitalize by the Free Online Dictionary ...
cap·i·tal·ize (k p -tl- z ). v. cap·i·tal·ized, cap·i·tal·iz·ing, cap·i·tal·iz·es. v.tr. 1. To use as or convert into capital. 2. To supply with capital or investment funds: ...
- capitalize - Wiktionary
capitalize (third-person singular simple present capitalizes, present participle capitalizing, simple past and past participle capitalized). (transitive) In writing or ...
- Capitalization - Wikipedia, the free encyclopedia
The rules have also changed over time, generally to capitalize fewer terms. ... Many European languages traditionally capitalize nouns and pronouns used to ...
- Capitalization | Punctuation Rules
Capitalize the first word of a quoted sentence. Examples: He said ... Do not capitalize when the title is acting as a description following the name. Examples: ...
- Capitalize | Define Capitalize at Dictionary.com
/ˈkæp ɪ tlˌaɪz/ Show Spelled [kap-i-tl-ahyz] Show IPA verb, cap·i·tal·ized, cap·i· tal·iz·ing. verb (used with object). 1. to write or print in capital letters or with an ...
- Definition of capitalize
capitalize definition and meaning by Oxford University Press.