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Financial Terms | |
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against |
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Definition of Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstCapitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue.
Related Terms:Absorption costingA method of costing in which all fixed and variable production costs are charged to products or services using an allocation base. absorption costinga cost accumulation and reporting Absorption costingA methodology under which all manufacturing costs are assigned Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. ACCRUALA method of accounting in which you record expenses when you incur them and sales as you make them—not when you pay bills or receive checks in the mail. AccrualAn expense for profit purposes even though no payment has been made. Accrual accountingThe recording of revenue when earned and expenses when ![]() accrual-basis accountingWell, frankly, accrual is not a good descriptive Accrual bondA bond on which interest accrues, but is not paid to the investor during the time of accrual. Accruals accountingA method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred. Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns Actual costThe actual expenditure made to acquire an asset, which includes the supplierinvoiced ![]() actual cost systema valuation method that uses actual direct Agency cost viewThe argument that specifies that the various agency costs create a complex environment in Agency costsThe incremental costs of having an agent make decisions for a principal. Aggregate Expenditure CurveAggregate demand for goods and services drawn as a function of the level of national income. Aggressive Cost Capitalizationcost capitalization that stretches the flexibility within generally All-in costTotal costs, explicit and implicit. Amortized Costcost of a security adjusted for the amortization of any purchase premium or appraisal costa quality control cost incurred for monitoring AssetAny possession that has value in an exchange. AssetA resource, recorded through a transaction, that is expected to yield a benefit to a AssetSomething that is owned; a financial claim or a piece of property that is a store of value. ![]() AssetProbable future economic benefit that is obtained or controlled by an entity as a result of assetAnything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.). AssetAll things of value owned by an individual or organization. Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset-Backed SecuritiesBond or note secured by assets of company. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based FinancingLoans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/equity ratioThe ratio of total assets to stockholder equity. Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Asset/liability managementAlso called surplus management, the task of managing funds of a financial asset mixThe weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital asset Pricing Model (CAPM), that determines the required Asset-specific RiskThe amount of total risk that can be eliminated by diversification by Asset substitutionA firm's investing in assets that are riskier than those that the debtholders expected. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Asset swapAn interest rate swap used to alter the cash flow characteristics of an institution's assets so as to Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual AssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsThings that the business owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. Assets requirementsA common element of a financial plan that describes projected capital spending and the attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Autonomous ExpenditureElements of spending that do not vary systematically with variables such as GDP that are explained by the theory. See also exogenous expenditure. Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Avoidable costscosts that are identifiable with and able to be influenced by decisions made at the business backflush costinga streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Batch costA cost that is incurred when a group of products or services are produced, batch-level costa cost that is caused by a group of things budgeted costa planned expenditure capital assetan asset used to generate revenues or cost savings Capital assetA fixed asset, something that is expected to have long-term usage within Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. Capital expendituresAmount used during a particular period to acquire or improve long-term assets such as capital expendituresRefers to investments by a business in long-term capitalization of costsWhen a cost is recorded originally as an increase CapitalizedRecorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures Capitalized Expendituresexpenditures that are accounted for as assets to be amortized Capitalized interestInterest that is not immediately expensed, but rather is considered as an asset and is then Capitalized InterestInterest incurred during the construction period on monies invested in Carring costscosts that increase with increases in the level of investment in current assets. carrying costthe total variable cost of carrying one unit of Carrying costThe cost of holding inventory, which can include insurance, carrying costscosts of maintaining current assets, including opportunity cost of capital. Cash costThe amount of cash expended. committed costa cost related either to the long-term investment company cost of capitalExpected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations. Contra-asset accountAn offset to an asset account that reduces the balance of the asset account. controllable costa cost over which a manager has the ability to authorize incurrence or directly influence magnitude conversion costRefers to the sum of manufacturing direct labor and overhead conversion costthe total of direct labor and overhead cost; CostA resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined costthe cash or cash equivalent value necessary to attain an CostThe expense incurred to create and sell a product or service. If a product is not cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting cost accumulationthe approach to product costing that determines cost allocationthe assignment, using some reasonable basis, cost avoidancethe practice of finding acceptable alternatives Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |