What is 'increase in capitalization' in SAP FI-LC - Consolidation?

increase in capitalization - Overview

• Component: FI-LC

• Component Name: Consolidation

• Description: The procedure of simultaneously increasing both the capital stock of an investee and the investment book value of an immediate parent company, without affecting the latter's investment shares. An increase in capitalization against corporate funds is the procedure of increasing capital stock without increasing investment book value. This procedure is executed in the system in the same way as an increase in capitalization against equity contributions.

increase in capitalization - Details

• 
  Key Concepts: 
  Increase in capitalization is a term used in SAP FI-LC Consolidation to refer to the increase in the value of an asset due to an increase in its market value or due to an increase in its useful life. This increase is recorded as a separate line item in the balance sheet and is not included in the calculation of the company's net income. 
  
  How to use it: 
  In SAP FI-LC Consolidation, an increase in capitalization is recorded as a separate line item on the balance sheet. This line item is not included in the calculation of net income, but it does affect the company's total assets. To record an increase in capitalization, enter the amount of the increase into the appropriate field on the balance sheet. 
  
  Tips & Tricks: 
  When recording an increase in capitalization, make sure to enter the correct amount into the appropriate field on the balance sheet. Also, be sure to keep track of any changes to the asset's useful life or market value that may have caused the increase. 
  
  Related Information: 
  For more information about SAP FI-LC Consolidation, please refer to SAP's official documentation or contact your local SAP representative.