Capital appreciation

'''Capital appreciation''' is an increase in the price or value of assets.<ref>[http://www.investopedia.com/terms/c/capitalappreciation.asp Capital Appreciation] at Investopedia. Retrieved 2012-06-02.</ref> It may refer to appreciation of company stocks or bonds held by an investor, an increase in land valuation,<ref>{{cite news|last=Spillane|first=Chris|title=U.K. Homeowners Shouldn't Count on Capital Gains, Minister Says|url=https://www.bloomberg.com/news/2011-09-07/u-k-homeowners-shouldn-t-count-on-capital-gains-minister-says.html|accessdate=2012-06-02|newspaper=Bloomberg|date=8 September 2011|location=London|quote='Gone are the days where you buy a house for capital appreciation,' Shapps... said}}</ref> or other upward revaluation of fixed assets.

Capital appreciation may occur passively and gradually, without the investor taking any action. It is distinguished from a capital gain which is the profit achieved by selling an asset. Capital appreciation may or may not be shown in financial statements; if it is shown, by revaluation of the asset, the increase is said to be "recognized". Once the asset is sold, the appreciation since the date of initially buying the asset becomes a "realized" gain.

When the term is used about valuation of companies publicly listed, capital appreciation is the goal of an investor seeking long-term growth. It is growth in the principal amount invested, but not necessarily an increase in the current income from the asset.

In the context of investment in a mutual fund, capital appreciation refers to a rise in the value of the securities in a portfolio which contributes to the growth in net asset value. A capital appreciation fund is a fund for which it is its primary goal, and accordingly invests in growth stocks.<ref>[http://www.investopedia.com/terms/c/capitalappreciationfund.asp Capital Appreciation Fund] at Investopedia. Retrieved 2012-06-02.</ref>

==References== {{Reflist}}

Category:Accounting terminology Category:Valuation (finance)