What Is Capitalization of Earnings?

Income capitalization refers to all kinds of profitable things, whether it is the amount of money put out by a loan, or even whether it is a piece of capital, which can be calculated by comparing the returns with the interest rate and equivalent What is the amount of capital.

Capitalization of earnings

In general lending, the amount of money lent is often called

Superficial capitalization gives prices to things that cannot be valued by themselves. The most prominent area where capitalization plays a role is the price formation of securities. As well as land sales and long-term leases, measuring the value of human capital.

Capitalization is a law in the commodity economy. As long as interest becomes the general form of income, this law will work.

In our country, when the centralized planning system is implemented, this law does not show up; when the reform environment in which market regulation is widely used gradually develops, this law also shows its own role. For example, since the emergence of land sales and long-term leases, as well as the purchase and sale of securities, this law has played a role in the formation of their prices. With the further development of the commodity economy, the further expansion of the scope of the capitalization law will also be an inevitable process.