The available assets of a business, including liquid assets (cash) and/or physical assets (machinery, buildings, and equipment).

Capital Account

A shareholder's or owner's account indicating the individual owner's investment plus net income from business operations, minus any net losses from operations, and minus any withdrawals of funds by the owner for personal use.

Capital Asset

Tangible and generally illiquid property used by a business to generate profit, such as equipment and buildings. The usefulness of the asset is expected to extend beyond one year.

Capital Expenditure

Known as CAPEX, capital expenditures describe funds used by a business to upgrade or acquire new physical assets, such as tools and other equipment, for the purpose of attaining future benefits. In the accounting context, capital expenditures are...

Capital Gains

Capital gain, for income tax purposes, is the gain realized from sale of capital assets. The difference between the original purchase price and the sale price is the gain realized. The tax on capital gains only occurs when an asset is sold or “...

Capital Investment

Money invested into a business with the expectation that the money will be recovered through future profits. Generally, the money is used for capital expenditures as opposed to daily working capital.

Capital Stock

Capital stock, also known as authorized stock, refers to all common stock and preferred stock a corporation is legally allowed to issue. A corporation’s charter establishes the amount of shares the corporation may issue, and the board of...


1) In the accounting context, it is where a cost is recorded as a a price of the asset rather than as an expenditure.

2) In the corporate context, it is a firm's "invested capital," meaning the business' corporate stock plus long-term debt plus...

Capitalized Expenditure

As opposed to an ordinary (or operating expense), which covers the day-to-day costs necessary to keep a business running, a capitalized expenditure is an expense that is made to 1) acquire an asset (whether tangible or intangible) that has a...

Capitalized Interest

Capitalized interest refers to accrued interest on an asset or loan that is not immediately reported on the company’s income statement as an expense like other interests. Instead, the corporation’s balance sheet reflects the interest in the...