International Accounting
Capitalization refers to the process of recording and classifying a cost as an asset rather than an expense, often occurring during mergers and acquisitions. This concept is critical in determining the value of a business, particularly when assessing intangible assets like goodwill, as it affects the overall financial position and performance of the combined entity. Proper capitalization allows companies to present their financials accurately, which is crucial for stakeholders evaluating investments and business strategies.
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