Capitalization Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Capitalization, written in plain English, along with examples of how it is used.

What is Capitalization?

(n) Capitalization is the process by which an expenditure included or grouped as a revenue expenditure is amortized to the future period as an asset, when the benefit out of such expenditure is not confined to the period under consideration. In accounting terms by capitalization of expenditure it is written of proportionally in the coming years instead of writing off it in the current period