Capital Assets

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Description of Capital Assets. Explanation.

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Definition Capital Assets. Description.


Capital Assets are a type of fixed assets, something that is expected to have long-term use within a company, and which exceeds the minimum monetary amount (known as the Capitalization Limit or Cap Limit).


In most countries a capital cost deduction applies to require or allow a purchaser to write off the cost of acquiring the asset over time. Rather than writing off the entire cost of acquisition in one year, it is written off over multiple years to reflect the fact that it is used in each year to do things and wears down or is used up or obsoleted to some degree. The period of time over which this occurs can range typically from 2 years for software to 30 years for buildings.


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