2. the excess of:
(ii) the value of liabilities.
3. The money and other property [of a corporation/enterprise] that is used in transacting its business.
Compare capitalization.
- CAPITAL ASSETS
- property with a relatively long life. In US tax law, the term refers to property held for investment [by the taxpayer] that when sold is subject to special treatment (as capital gains/losses). Property that is part of one’s stock in trade does not qualify as a capital asset.
- CAPITAL EXPENDITURE
-
expenditure made for the acquisition/repair/improvement of a capital asset.
EXAMPLE:
XYZ Co wants to expand its production capabilities in order to meet the increase in demand [for its products]. Its needs include one factory, and two new office buildings. Regardless of where XYZ obtains the money [for these three capital assets] (ie, whether from a bank; from retained profits; etc.), the money that XYZ spends to acquire these buildings will represent a capital expenditure.
- CAPITAL INVESTMENT
- money paid out to acquire something for permanent use/value in a business/home. Alternatively, a capital investment is defined as moneys paid to acquire interest in a business (eg, a stock purchase).
- CAPITAL STOCK
- the group of accounting records that involves transactions in the equity/ownership of the business
