Capitalization

Corporate Finance Financial Statements Financial Terms Dictionary

Contents

In accounting, capitalization allows an asset to be depreciated over its useful life, which is reflected in the balance sheet and not in the income statement.

In finance, capitalization refers to the book value or the sum of a company’s debt and equity.
Market capitalization is the dollar value of a company’s outstanding shares and is calculated as the current market price multiplied by the total number of shares outstanding.