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Trading and Investment Terms

Capitalization

In finance, capitalization refers to the cost of capital in the form of a corporation's, StockLong-term debt, Retained earnings. 

Also, Market capitalization refers to the number of outstanding shares multiplied by the share price.

Capitalization has two meanings in: 

Accounting

Finance

  1. In Accounting: Capitalization occurs when a cost is included in the value of an asset.
  2. In Finance: Capitalization or book value is the total of a company's debt and equity.

Some larger office equipment may provide a benefit to the business over more than one accounting period. 

These items are fixed assets, such as

Computers

Cars

Office buildings. 

The cost of these items is recorded on the general ledger as the historical cost of the asset. 

These costs are said to be capitalized, not expensed.