Capital Asset


DEFINITION of 'Capital Asset'

A type of asset that is not easily sold in the regular course of a business's operations for cash and is generally owned for its role in contributing to the business's ability to generate profit. Furthermore, it is expected that the benefits gained from the asset will extend beyond a time span of one year. On a business's balance sheet, capital assets are represented by the property, plant and equipment figure.


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BREAKING DOWN 'Capital Asset'

Examples include land, buildings, machinery, etc. Generally, these are assets that cannot quickly be turned into cash and are often only liquidated in a worst-case scenario. For example, a company might look at selling a capital asset if it was looking at restructuring or the business was engaged in bankruptcy proceedings.

Depending on the business involved, capital assets may represent the majority of assets that are owned. For example, in equipment heavy operations such as oil exploration, it is not surprising to find the majority of a business's assets to be capital assets.

  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Capital

    1) Financial assets or the financial value of assets, such as ...
  3. Non-Core Assets

    Assets that are either not essential or simply no longer used ...
  4. Core Assets

    An essential, important or valuable property of a business without ...
  5. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  6. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
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  1. What are typical forms of capital assets within a manufacturing company?

    Manufacturing companies heavily rely on their capital assets to generate revenues and profits. A capital asset can be tangible ... Read Full Answer >>
  2. Is goodwill considered a form of capital asset?

    Goodwill is an intangible asset of a company, and it is also considered to be a form of capital asset. Although it may be ... Read Full Answer >>
  3. Are capital assets normally immediately expensed or are they amortized/depreciated ...

    Capital assets are normally amortized or depreciated over the life of the asset since, by definition, capital assets are ... Read Full Answer >>
  4. Is intellectual property considered a form of capital asset within a company?

    Some kinds of intellectual property are considered capital assets and may be recorded on a company's balance sheet as intangible ... Read Full Answer >>
  5. Why should I dig further if I find a company has positive cash flow from investing ...

    A positive cash flow from investing activities could signal that a company is in financial trouble and is selling off its ... Read Full Answer >>
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    Green-field and brown-field investments are two different types of foreign direct investment, or FDI. Green-field investments ... Read Full Answer >>
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    In secondary markets, investors exchange with each other rather than with the issuing entity. Through massive series of independent ... Read Full Answer >>
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