Legal Definition and Related Resources of Capitalization

A method of computation which gives value to land in relation to income it produces. state highway commission v Jones, (Ind.App.)363 N.E. 1018.

The debt and/or equity mix that fund a firm”s assets.

Total amount of the various securities issued by a corporation. Capitalization may include bonds, debentures, preferred and common stock, and surplus. Bonds and debentures are usually carried on the books of the issuing company in terms of their par or face value. Preferred and common shares may be carried in terms of par or stated value. Stated value may be an arbitrary figure decided upon by the director or may represent the amount received by the company from the sale of the securities at the time of issuance. (See: Par)

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Capitalization in Historical Law

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Search for legal acronyms and/or abbreviations containing Capitalization in the Legal Abbreviations and Acronyms Dictionary.

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What does Capitalization mean in American Law?

The definition of Capitalization in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

The total amount of securities, e.g., common stock, preferred stock, bonds, issued by a firm (especially a corporation) and at present outstanding. Also, when one for accounting purposes treats an expenditure benefiting a future period not as a current expense but as an asset (ordinarily subject of depredation), one may be said to have effected a capitalization. See also capitalize.

Concept of Capitalization in the context of Real Property

A short definition of Capitalization: Determining a present value of income property by taking the annual net income (either known or estimated) and discounting by using a rate of return commonly acceptable to buyers of similar properties. For example: Net income of a property is $10,000 per year. Capitalizing at a rate of 10%, the property would be worth $100,000.

Concept of Capitalization in the context of Real Property

A short definition of Capitalization: Determining a present value of income property by taking the annual net income (either known or estimated) and discounting by using a rate of return commonly acceptable to buyers of similar properties. For example: Net income of a property is $10,000 per year. Capitalizing at a rate of 10%, the property would be worth $100,000.