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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 ?
8) Since the expenditures do not improve the software beyond the state in which it was intended to be used and do no more than restore it to its normal operating state, the EITF concluded that such costs -- being indistinguishable from other forms of repair and maintenance expenses -- are "period costs and should be expensed as incurred' rather than capitalized.
National Starch deducted these fees, but upon audit the IRS concluded that they should be capitalized.
263(a)-5(g)(2), an amount that is capitalized by the acquirer in a taxable stock or asset acquisition is added to the basis of the acquired stock or assets, while amounts capitalized by a target in a taxable asset sale reduce the target's amount realized on the disposition.
Both the IRS and the courts have stated that expenditures that result in future benefits do not have to be capitalized if the amount is so small that permitting a deduction does not distort the clear reflection of income.
If an expense is not otherwise required to be capitalized by the regulations, it is not required to be capitalized solely because it produces future benefits, unless other published guidance specifies a capital requirement.
If some or all of the expenditures are likely to be capitalized, prepare an analysis of the expected useful life or otherwise establish the wasting aspects of the benefits to prevent the creation of a nonamortizable asset.
Previously capitalized loan origination costs would be amortized into taxable income under the taxpayer's former accounting method.
The Indopco case made clear that an expenditure must be capitalized if it provides significant future benefits even though it does not create a separate, distinct asset.
In Technical Advice Memorandum 9411002 (November 9, 1993), the Internal Revenue Service ruled that costs of asbestos removal must be capitalized, but that costs of asbestos encapsulation may be deducted currently.