Monday, September 28, 2015

Term of the Day: Capitalized Cost

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September 28, 2015
Capitalized Cost

An expense that is added to the cost basis of a fixed asset on a company's balance s​heet. Capitalized costs are incurred when building or financing fixed assets. Capitalized costs are not expensed in the period they were incurred, but recognized over a period of time via depreciation or amortization.

Breaking It Down:

Capitalizing costs is a method of following the matching principle of accounting. The matching principle seeks to...

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Related Definitions

Amortization
Capitalize
Income Statement
Capitalized Lease Method
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Dividend Payout Ratio
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