capitalize

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1. convert a schedule of income into a principal amount, called capitalized value, by dividing by a rate of interest.

2. issue securities to finance capital outlays (rare).

3. record capital outlays as additions to asset accounts, not as expenses.
See also capital expenditure.

4. convert a lease obligation to an asset/liability form of expression called a capital lease, that is, to record a leased asset as an owned asset and the lease obligation as borrowed funds.

5. turn something to one’s advantage economically—for example, sell umbrellas on a rainy day.

Previous:	Capitalization Ratio, Capitalization Rate
Next:	Capitalized Cost Reduction, Capitulation

1. to estimate the present lump sum value of an income stream.
See capitalization rate.


Example: An income stream of $1,000 per year expected for 20 years is capitalized to result in a value of $8,513, based on a 10% interest rate.


2. to set up the cost of an asset on financial records.


Example: Abel acquires a building at a cost of $100,000. Since the cost cannot be deducted in the year paid, the $100,000 is capitalized as an asset and depreciates over its estimated useful life.


3. supply with capital.


Example: Carl had saved $250,000 over the years and used the money to capitalize his newly formed real estate management company, which was needed to advertise, buy furniture and equipment, and pay salaries until the company achieved a break-even level of sales revenues.

Previous:	Capitalization Rate, Capitalization
Next:	Capitalized Value, Capitalstructure

verb

1. To supply capital to or for: back, finance, fund, grubstake, stake, subsidize. Informal bankroll. Idioms: put up money for. See help/harm/harmless, money.
2. To derive advantage: benefit, gain, profit. See help/harm/harmless.

This entry contains information applicable to United States law only.

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.

An accounting method used to delay the recognition of expenses by recording the expense as long-term assets.

In general, capitalizing expenses is beneficial as companies acquiring new assets with a long-term lifespan can spread out the cost over a specified period of time. Companies take expenses that they incur today and deduct them over the long term without an immediate negative affect against revenues.

Investopedia Says:
If a company capitalizes regular operating expenses, it is doing so inappropriately, most likely to artificially boost its operating cash flow and look like a more profitable company. Because a company can't hide its expenses forever, such a practice will fail in the long run.

It is important not to confuse capitalize with capitalization.

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  See crossword solutions for the clue Capitalise.

Dansk (Danish)
v. tr. - udnytte, financiere, skrive med stort bogstav
v. intr. - anvende, kapitalisere

idioms:

• capitalize on    slå mønt af, udnytte

Nederlands (Dutch)
kapitaliseren, financieren, profiteren van, met hoofdletter schrijven

Français (French)
v. tr. - (Fin) capitaliser, écrire en majuscules
v. intr. - tirer parti de

idioms:

• capitalize on    tirer profit de, tirer parti de

Deutsch (German)
v. - groß schreiben, kapitalisieren

idioms:

• capitalize on    Gewinn schlagen aus, profitieren von

Ελληνική (Greek)
v. - (οικον.) κεφαλαιοποιώ, (τυπογρ.) γράφω ή τυπώνω με κεφαλαία

idioms:

• capitalize on    εκμεταλλεύομαι, επωφελούμαι από

Italiano (Italian)
scrivere in maiuscole

idioms:

• capitalize on    trarre profitto da

Português (Portuguese)
v. - capitalizar

idioms:

• capitalize on    tirar vantagem de uma situação

Русский (Russian)
капитализировать, превращать в капитал

idioms:

• capitalize on    извлекать выгоду из чего-либо

Español (Spanish)
v. tr. - capitalizar
v. intr. - capitalizar, capitalizarse

idioms:

• capitalize on    sacar provecho o partido de

Svenska (Swedish)
v. - kapitalisera, använda, finansiera, utnyttja

中文（简体）(Chinese (Simplified))
用大写书写, 供给, 核定...的资本额, 估, 利用

idioms:

• capitalize on    利用

中文（繁體）(Chinese (Traditional))
v. tr. - 用大寫書寫, 供給, 核定...的資本額, 估
v. intr. - 利用

idioms:

• capitalize on    利用

한국어 (Korean)
v. tr. - 대문자로 쓰다, 투자하다, 이용하다, 인쇄하다
v. intr. - 이용하다, 편승하다

idioms:

• capitalize on    이용하다, 편승하다

日本語 (Japanese)
v. - 大文字で書く, 資本化する, 資本を出す

idioms:

• capitalize on    利用する

العربيه (Arabic)
‏(فعل) استغل, حول الفوائد الى رأس, مال‏

עברית (Hebrew)
v. tr. - ‮כתב באותיות גדולות, מימן, היוון, חישב ערך רכוש‬
v. intr. - ‮הפיק תועלת, הרוויח מ-‬

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