CAPITAL ADDITION Definition

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CAPITAL ADDITION is a. new (as opposed to replacement) part added to an existing non-current productive asset (e.g., equipment) used for business purposes that increases the useful life and service potential of the asset; or, b. in taxation, cost of capital improvements and betterments made to the property by a taxpayer.

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COLLAR is the simultaneous purchase of an interest rate cap and sale of an interest rate floor on the same index for the same maturity and notional principal amount.

BLACK HOLE EXPENDITURE is a capital R&D expenditure that does not give rise to a depreciable asset and is not otherwise deductible.

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