capitalization

capitalization
/kaepatabzeyshan/ Capitalization represents the total amount of the various securities issued by a corporation.
Capitalization may include bonds, debentures, preferred and common stock and surplus. Bonds and debentures are usually carried on the books of the issuing company in terms of their par or face value. Preferred and common shares may be carried in terms of par or stated value. Stated value may be an arbitrary figure decided upon by the directors or it may represent the amount received by the company from the sale of the securities at the time of issuance. To record an expenditure that may benefit a future period as an asset rather than to treat the expenditure as an expense of the period of its occurrence.
See capitalize
@ capitalization accounting method
A method of determining the present value of an asset that is expected to produce a stream of future benefits. This involves discounting the stream of expected future benefits at an appropriate rate. A method of measuring values of realty for purpose of determining values of mortgages by expertly estimating the gross income which property should realize, and separately the expenses reasonably required to carry it, and thus arriving at a fair estimate of net income and using a capitalization figure or factor, expertly chosen. Depreciation must be taken into consideration in use of such method. In re New York Title & Mortgage Co. (Series B-K), 21 N.Y.S.2d 575, 594, 595
@ capitalization rate
The rate of interest used in calculating the present value of future periodic payments
@ capitalize
To convert periodic payments into an equivalent sum or sum in hand. To compute the present value of income extended over a period of time. To record an expenditure as an asset when the expenditure benefits a period in excess of one year. An example includes improvements to a commercial building. The cost of the improvements is recorded as an asset on the balance sheet and written off over the estimated useful life of the improvement
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Black's law dictionary. . 1990.

Look at other dictionaries:

  • capitalization — cap·i·tal·i·za·tion /ˌka pət əl ə zā shən, əl ī / n 1: the act or process of capitalizing capitalization of earnings 2: a sum resulting from a process of capitalizing; esp: paid in capital at capital ina …   Law dictionary

  • Capitalization — Cap i*tal*i*za tion, n. 1. The act or process of capitalizing. [1913 Webster] …   The Collaborative International Dictionary of English

  • capitalization — 1860, act of converting (assets) to capital, noun of action from CAPITALIZE (Cf. capitalize) in the financial sense. Meaning act of writing or printing in capital letters is recorded from 1864 …   Etymology dictionary

  • capitalization — (Amer.) cap·i·tal·i·za·tion || ‚kæpɪtÉ™laɪ zeɪʃn n. act or process or capitalizing (also capitalisation) …   English contemporary dictionary

  • capitalization — [kap′ət l ə zā′shən] n. 1. a) the act or process of converting something into capital b) the amount or sum resulting from this 2. the total capital funds of a corporation, represented by stocks, bonds, undivided profit, surplus, etc. 3. the total …   English World dictionary

  • Capitalization — This article is about capitalization in written languages, including languages other than English. For other uses, see Capitalization (disambiguation). For capitalization guidelines on Wikipedia, see Wikipedia:Manual of Style (capital letters).… …   Wikipedia

  • Capitalization — The debt and/or equity mix that fund a firm s assets. The New York Times Financial Glossary * * * capitalization cap‧i‧tal‧i‧za‧tion [ˌkəptlaɪˈzeɪʆn ǁ əˈzeɪ ] also capitalisation noun [uncountable] FINANCE 1 …   Financial and business terms

  • capitalization — (1) The process of imputing a value to an income stream by dividing the annual net income before income taxes and depreciation by a rate of return expressed as a decimal. This process is used in real estate lending and appraisals. (2) The total… …   Financial and business terms

  • capitalization — /kaepatabzeyshan/ Capitalization represents the total amount of the various securities issued by a corporation. Capitalization may include bonds, debentures, preferred and common stock and surplus. Bonds and debentures are usually carried on the… …   Black's law dictionary

  • Capitalization — 1. In accounting, it is where costs to acquire an asset are included in the price of the asset. 2. The sum of a corporation s stock, long term debt and retained earnings. Also known as invested capital . 3. A company s outstanding shares… …   Investment dictionary

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