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Capital appreciation is an increase in the price or value of
asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value o ...
s. It may refer to appreciation of company
stock
stock
s or bonds held by an investor, an increase in land valuation, 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 statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to und ...
s; 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 in reference to stock valuation, 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.Capital Appreciation Fund
at Investopedia. Retrieved 2012-06-02.


See also

* Currency appreciation and depreciation * Depreciation * Holding gains


References

Accounting terminology Valuation (finance) {{accounting-stub