The term capital means a form of wealth, which can take the form of money, property, net assets or equity of an entity. As such, capital may also generate wealth. “Capital assets”” are usually thought of as permanent and durable as distinguished from consumables such as supplies.
Has different meanings depending on the context in which it is used.
Physical capital is land and the stock of products set aside to support future production and consumption. In the National Income and Product Accounts, private capital consists of business inventories, producers’ durable equipment, and residential and nonresidential structures. (See National Income and Product Accounts.) Financial capital is funds raised by governments, individuals, or businesses by incurring liabilities such as bonds, mortgages, or stock certificates.
Human capital is the education, training, work experience, and other attributes that enhance the ability of the labor force to produce goods and services.
Capital assets are land, structures, equipment, intellectual property (e.g., software), and information technology (including information technology service contracts) that are used by the federal government and have an estimated useful life of 2 years or more. Capital assets may be acquired in different ways: through purchase, construction, or manufacturing; through a lease-purchase or other capital lease (regardless of whether title has passed to the federal government); through an operating lease for an asset with an estimated useful life of 2 years or more; or through exchange.
Capital assets may or may not be recorded in an entity’s balance sheet under federal accounting standards. Capital assets do not include grants to state and local governments or other entities for acquiring capital assets (such as National Science Foundation grants to universities or Department of Transportation grants to Amtrak), intangible assets (such as the knowledge resulting from research and development), or the human capital resulting from education and training.
For more on capital assets, consult the Capital Programming Guide (June 1997), a supplement to OMB Circular No. A-11.