capital maintenance concept
A Dictionary of Business and Management
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2006
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© A Dictionary of Business and Management 2006, originally published by Oxford University Press 2006. (Hide copyright information)
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capital maintenance concept 1. The
financial capital maintenance concept is that the capital of a company is only maintained if the financial or monetary amount of its
net assets at the end of a financial period is equal to or exceeds the financial or monetary amount of its net assets at the beginning of the period, excluding any distributions to, or contributions from, the owners.
2. The
physical capital maintenance concept is that the physical capital is only maintained if the physical productive or operating capacity, or the funds or resources required to achieve this capacity, is equal to or exceeds the physical productive capacity at the beginning of the period, after excluding any distributions to, or contributions from, owners during the financial period.
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