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Capitalize
(redirected from capitalizes)

   Also found in: Dictionary/thesaurus, Financial, Wikipedia 0.04 sec.

To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment.

The owner of a business may capitalize the expense of renovating a factory to maximize his or her after-tax profits, since such expenses may be used to decrease the pretax profits, thereby reducing the amount of profits subject to taxation.

An individual may compute the net worth of shares of stock, in order to treat them as capital assets for income tax purposes. Such treatment often results in more favorable rates of taxation on the profits made when assets are sold because they are considered capital gains.



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In its last filing with the Securities and Exchange Commission, Computer Sciences states that it only capitalizes "fixed assets.
When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset.
Barbara's Outfitters capitalizes certain start-up costs and fully amortizes those costs within the first year of operations.
 
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