what is capitalization in accounting 
in accounting typically a purchase is recorded in the time accounting period in which it was bought however some expenses such as office equipment may be usable for several accounting periods beyond the one in which the purchase was made these fixed assets are recorded on the general ledger as the historical cost of the asset as a result these costs are considered to be capitalized not expensed a portion of the cost is then recorded during each quarter of the item s usable life in a process called depreciation 