Capital asset is used in two overlapping ways. In accounting and budgeting, it means an asset whose cost is capitalized — recorded on the balance sheet and depreciated — because it is long-lived and above the organization's capitalization threshold. Purchases of capital assets are capital expenditure. In tax law the term can have a narrower, jurisdiction-specific meaning (for example, in US tax rules it relates to how gains on sale are taxed).
Why it matters
Whether something is a capital asset decides whether its cost hits profit immediately or is spread over years — which affects budgets, reported profit and taxes.
In Asetavo
You can record cost, useful life and salvage value on any asset and run depreciation only on those you capitalize, while still tracking lower-value items.