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Capital Asset


An asset that can contribute to an entity’s revenue generation process (and generate value) over a long period of time (a period spanning more than a one financial period). Examples of capital assets are buildings, machinery, equipment, and vehicles. By nature, such assets are long-term and real assets, whose value is equal to or greater than a specific capitalization threshold for a respective classification of the asset and have an estimated life (useful life) exceeding one year.

Capital assets are depreciated over their estimated useful lives, in exception of inexhaustible assets such as land. For example, equipment has a 5-10 year useful, depending on the asset in question. Land and other specific types of capitalized assets (e.g., collections) are not subject to depreciation treatment.



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Accounting is the language of business, everywhere, worldwide. It is the means by which virtually every business communicates information about its operations, irrespective of size, scale, objectives, ...
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