Definition of Capital recovery:
Capital recovery is a term that has several related meanings in the world of business. It is, primarily, the earning back of the initial funds put into an investment. When an investment is first made in an asset or a company, the investor initially sees a negative return, until the initial investment is recouped. The return of that initial investment is known as capital recovery. Capital recovery must occur before a company can earn a profit on its investment.
Regaining of the invested capital over the life of an investment. No profit or income on the investment may be determined until the full amount of invested- capital is recovered. See also capital maintenance.
Capital recovery also happens when a company recoups the money it has invested in machinery and equipment through asset disposition and liquidation. The concept of capital recovery can be helpful to a business as it decides what fixed assets it should purchase.
How to use Capital recovery in a sentence?
- The term can also refer to corporate debt collection.
- Capital recovery refers primarily to recovering initial funds put into an investment through returns from that investment, making it a break-even measure.
- It can also refer to a recouping invested funds through the disposition of assets.
Meaning of Capital recovery & Capital recovery Definition