Capitalisation has multiple contexts of use in finance and accounting, often referring to the process of converting certain costs into and treating them as capital assets on the balance sheet, rather than as immediate expenses on the income statement. For example, instead of expensing the purchase cost of equipment entirely in one period, a business may capitalise the expenditure, allocating the cost over the useful life of the equipment through depreciation. Another context of capitalisation is in determining the market value of a company, also known as market capitalisation, which is calculated by multiplying the total number of a company's outstanding shares by its current stock price.

Understanding the proper use of capitalisation is integral during month-end close processes and can have a large effect on the accuracy of financial reporting. Terms such as depreciation schedule and accumulated depreciation are closely related, as they are components in tracking the capitalised costs over time. Furthermore, effective capitalisation policies ensure compliance with accounting standards and enable companies to better represent their financial position.