#capitalized cost

[furryalligator]

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. Read more: Capitalized Cost Definition | Investopedia http://www.investopedia.com/terms/c/capitalizedcost.asp#ixzz3n5EF4UZX Follow us: Investopedia on Facebook

[turtlerough]

What is capitalised cost

A capitalized cost is a cost that is recognized as part of a fixed asset on a company's balance sheet, rather than being charged to expense in the period incurred. If a cost is capitalized, it is charged to expense over a period of time through the use of amortization (for intangible assets) or depreciation (for tangible assets).

Capitalization meets with the requirements of the matching principle, where you recognize expenses at the same time you recognize the revenues that those expenses helped to generate.