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Capiitalization refers to the recording of recording non-current assets
In accounting, it is where costs to acquire an asset are included in the price of the asset.2. The sum of a corporation's stock, long-term debt and retained earnings. Also known as "invested capital".3. A company's outstanding shares multiplied by its share price, better known as "market capitalization".
Capitalizing a cost allows a business to report that cost as an asset rather than an expense. Not only does this boost the company's value by putting more assets on its balance sheet, it also boosts the company's profit by reducing expenses.
Capitalization belongs to Non Current Assets/ Fixed asset of the entity. IAS16 ( property Plant & Equipment) desribes that all the direct cost related to acuire and assest should be recorded in the cost of asset but this assest must be used for commercial or business purpose for long term, wear and tear or repair charges must be treat as expence and should not be included in the cost of acquision. This is Called Capitalization.
