capitalize
DefinitionTo 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.
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capitalize is ...
... part of the Accounting subject.
... part of the Accounting subject.
Related Terms
capitalize appears in these other terms
gross capitalized cost, capitalized interest
capitalize appears in the definitions of these other terms on BusinessDictionary.com
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