Capitalizable

Adjective. Referring to costs, expenses, or other financial elements that can be converted into capital or added to the value of an asset in accounting and finance. This typically involves expenditure that enhances the utility or useful life of an asset, thereby raising its value on the balance sheet.

Capitalizable meaning with examples

• In preparing the financial statements, the accountant noted that certain renovation expenses were capitalizable. By categorizing these costs as capital expenditures, the company could spread the expense over several years, enhancing its asset value and improving the overall financial picture presented to stakeholders.
• During the audit, the financial advisor emphasized the importance of identifying capitalizable expenses. These expenses could significantly alter the asset base of the company, impacting financial ratios and valuations, which are crucial for potential investors during future fundraising rounds.
• As the startup developed its software product, it carefully tracked labor and development costs to identify which ones were capitalizable. By ensuring these costs were documented correctly, the founders aimed to offer a more attractive financial position to venture capitalists during their funding discussions.
• In the world of real estate, renovations that significantly improve property value are considered capitalizable. This includes structural changes or upgrades that enhance functionality, offering property owners a better return on investment when they decide to sell or refinance.