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(1) The conversion of surplus value into capital, that is, the utilization of surplus value for the expansion of capitalist production. The capitalized surplus value forms a fund of capital accumulation that, like capital, is divided in two parts: the additional constant capital, used for the acquisition of additional means of production, and the additional variable capital, used for buying additional labor power.

(2) The process of the formation of fictitious capital. In bourgeois society, each regularly recurrent income (such as ground rent or dividends) is capitalized: it is calculated at the average loan interest rate as if it were income from capital in the form of a loan at this interest rate. Each unearned income received by virtue of the ownership of securities is considered as interest from a certain capital, which in reality does not exist (imaginary capital). The securities issued (shares, bonds of corporations or the state) become capital and bear interest. The increase in the rates of the shares (capitalized dividends), particularly in the period of cyclic upsurge, leads to the accumulation of fictitious capital, which qualitatively and quantitatively differs from the accumulation of real capital and which is determined by its own laws. At the same time, the excessive expansion of fictitious capital and the subsequent stock exchange collapse may seriously affect the process of capital accumulation. Since the whole mass of fictional capital represents a capitalized income, the change of its value does not depend on the value movement of the actual (real) capital that it represents. Capitalization means the further development of the fetishist character of capitalist relations of production, that is, a further development of the treatment of money and things as if they had a kind of magic power over men.


Marx, K. Kapital, vol. 3. K. Marx and F. Engels, Soch, 2nd ed., vol. 25, chs. 1–2, sees. 5–7.
Novye iavleniia v nakopenii kapitala v imperialisticheskikh stranakh. Moscow, 1967.


References in periodicals archive ?
Under this approach, there are two different techniques for converting net operating income into a value indication: 1) direct capitalization, which employs an overall capitalization rate on the net operating income from a stabilized 12-month period and 2) yield capitalization, which employs an internal rate of return on a stream of annual cash flows and a residual capitalization rate on the reversionary property value at the end of the projected investor holding period.
Rather, they are intended to strike an appropriate balance between the Code's capitalization provisions and taxpayers' ability to comply, and the IRS's abilivy to administer the law.
The current capitalization rate spread reflects what we're seeing happen with Class A properties and what they're trading at," said Sweeney.
Capitalization also may be required where the costs give rise to a significant future benefit.
As of September 30, 2000, The Morgan Stanley Capital International (MSCI) Emerging Markets Free Index capitalization of $1.
The heavier banking equity investment might exert pressure on the stability of its capitalization due to the exposure in the more volatile financial market.
Thus, requiring capitalization would be an overly broad application of Lincoln Savings and INDOPCO.
Indeed, the National Taxpayer Advocate identified capitalization issues as the most litigated issue for business taxpayers in the 1998 Report to Congress, and there is no sign the controversy has abated.
The total REIT industry market capitalization as of December 31, 1996 was $88.
The IRS position on the issue of expense versus capitalization of environmental assessment and cleanup costs is documented in TAM 9315004, issued in April 1993.
KFS) today announced the introduction of the Kemper Investment Portfolios (KIP) -- Small Capitalization Equity Portfolio, a back-end load fund which will seek maximum capital appreciation.
The risk-based capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), has demonstrated the strengthened capitalization.