capital asset
capital asset
English Definitions:
capital asset (Noun)
An asset that is recorded on a balance sheet as capital - that is, property that creates more property, such as a factory that creates shoes, or a forest that yields a quantity of wood.
capital asset (Noun)
An asset in the sense of accounting, but also including financial assets such as stocks or bonds.
Capital asset
The term capital asset has three unrelated technical definitions, and is also used in a variety of non-technical ways. It refers to assets, including investments not held for sale, conversion or consumption# in the ordinary course of business. ⁕Here consumption does not mean use. ⁕In financial economics, it refers to any asset used to make money, as opposed to assets used for personal enjoyment or consumption. This is an important distinction because two people can disagree sharply about the value of personal assets, one person might think a sports car is more valuable than a pickup truck, another person might have the opposite taste. But if an asset is held for the purpose of making money, taste has nothing to do with it, only differences of opinion about how much money the asset will produce. With the further assumption that people agree on the probability distribution of future cash flows, it is possible to have an objective Capital asset pricing model. Even without the assumption of agreement, it is possible to set rational limits on capital asset value. ⁕In governmental accounting, it is defined as any asset used in operations with an initial useful life extending beyond one reporting period. Generally, government managers have a "stewardship" duty to maintain capital assets under their control. See International Public Sector Accounting Standards for details.
Capital asset
A capital asset is defined as property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating. Thus, land and building, plant and machinery, motorcar, furniture, jewellery, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, securities, units, mutual funds, zero-coupon bonds etc. are capital assets.
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"capital asset." Kamus.net. STANDS4 LLC, 2024. Web. 28 Mar. 2024. <https://www.kamus.net/english/capital+asset>.
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