(redirected from capitalizations)
Also found in: Dictionary, Thesaurus, Legal, Financial.
Related to capitalizations: capitalisation
The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.



(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.


The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
(15) The IRS previously had looked to INDOPCO itself as support for the proposition that "capitalization is the norm." (16) Instead, at least with respect to self-created intangibles, the final regulations reverse the government's long-held position and establish deductibility as the default rule.
Capitalization is not required where the contract provides only a hope or expectation of patronage, nor where the agreement can be cancelled at-will within the first year.
Significantly, capitalization is only required where the taxpayer obtains some form of assurance of a future income stream or of a concrete, commercial benefit.
This well-intentioned warning to creative taxpayers ideally will not encourage revenue agents to take an over-expansive view of the eight categories, thereby simply shifting the capitalization debate to a discussion of the boundaries of these categories.
Once a taxpayer has determined that it has either acquired or created an intangible within the scope of the regulations, the remaining task is to identify those costs subject to capitalization. Thankfully, Treas.
Apart from the 12-month rule and the de minimis rule for the costs of creating certain contracts, the final regulations' primary focus in identifying the costs subject to capitalization is upon transaction costs.
The IRS, as noted in TAM 8945003, would also require capitalization of the white knight costs.
In the case of a friendly takeover, however, many of the target's costs will be incident to the shift in ownership and capitalization is dictated by the Tax Court's long-term benefit test.
For example, while the deductibility of advertising expenses is probably not threatened by the Tax Court's long-term benefit test, the IRS may view other expenses as falling within the realm of that test and require their capitalization. The Third Circuit Court of Appeals, in its review of the National Starch decision, must address the efficacy of the long-term benefit test in resolving the capitalization issue with respect to NSC's takeover-related expenses.
(6) The Tax Court also acknowledged that expenses incident to other types of changes in corporate structure or capitalization generally constitute capital expenditures.
If the dominant aspect was a reorganization, capitalization of expenses was required.