Capital Account Law and Legal Definition

Capital account means an account that represents a partner's share in the partnership capital and it is usually found in the partnership's balance sheet. In accounting, it means the account which shows the contributions of the proprietors, partners or stockholders to an entity. A capital account is often used to track the value of capital assets owned by an entity. It includes capital transfers and acquisitions, disposal of non-produced, non-financial assets. It also shows the re-allotment of capital assets between sectors of the economy and the rest of the world. While in economics, a capital account means an account that records all transactions involving a change of ownership of an asset between domestic and foreign residents. It gives the net amount of public and private international investment flowing in and out of a country. In macroeconomics and international finance, the capital account is also known as a financial account.

The following is an example of a state statute defining the term capital account. According to Fla. Stat. § 655.005 (1)(c), "Capital accounts" means unimpaired capital stock, unimpaired surplus, and undivided profits or retained earnings of a financial institution.