Definition of Capital maintenance:
An accounting concept according to which profit can be earned only if the company's capital returns to its original level (called return of capital) or is maintained at a default level. Therefore, it is important to determine the capital value before calculating the value of profit.
Capital savings, also known as return on capital, is an accounting concept based on the principle that a company's income should not be recognized until it has fully covered its expenses. Could not recover or retain its capital. A company can successfully maintain its capital if the amount of capital does not start from the end of the period. Each of the above benefits is equal to the commercial benefit.
The concept of capital protection means that the company does not make any profit until the costs associated with the operations are fully covered during the selected accounting period. To calculate the results, you will need to know the total value of the company and other fixed assets at the beginning of the period.
How to use Capital maintenance in a sentence?
- There are two types of capital management: restoration of financial capital and restoration of physical capital.
- The concept of capital protection means that a company will make a profit only if it reimburses all the expenses associated with its operations during the selected accounting periods.
- During periods of high inflation, a company may need to adjust its asset valuation to determine if it is increasing its capital.
- Capital savings, also known as capital redemption, is an accounting concept in which the result of a company is recognized only after it has received its total expenses or retained capital.
Meaning of Capital maintenance & Capital maintenance Definition