Capitalization has different meanings depending on the context.With regard to funding a business, capitalization means all the money received by that business in exchange for long-term debt and equity. If a business shows $10,000,000 of long-term debt and $20,000,000 of equity, the business is said to be capitalized in the amount of $30,000,000. For a publicly traded company, capitalization has the same meaning when looking at its financial statements, but in addition, it can also mean the total market value of all its publicly traded securities. Therefore, if a publicly traded company has 20,000,000 shares outstanding, and a share trades for $20, the company’s capitalization as determined by the market is $400,000,000. In the accounting context, capitalization is the process of recording the total cost of acquiring an asset that has a useful life of more than one accounting period. Instead of expensing it, the asset is listed on the company’s balance sheet and depreciated over its useful life. Assume ABC Corp purchases a machine for $50,000 that will last five years. ABC also pays an additional $2,000 to deliver it and $3,000 to install it. So in addition to the $50,000 ABC paid for the machine, ABC will capitalize both the $2,000 delivery fee and the $3,000 installation fee. The total capitalized cost of the machine is $55,000, which will be the depreciable cost basis on ABC’s books.