Fixed and working capital. The physical and moral wear and core capital. Amortization.

Capital division according to the character of circulation.

In accordance with the way of transfer of means of production value over the value of manufactured goods in production form capital is divided into fixed and working one.

a) Fixed capital is a part of productive capital, the value of which is transferred over the product in parts during some periods of production (premises, equipment etc.).

b) Working capitalis a part of productive capital the value of which is transferred over the product created during one circulation and is completely restored after its distribution (raw materials, workforce etc.).

4) Reproduction and accumulation of capital.

Capital as a self-increasing value is realized in the process of expanded reproduction the material base of which is accumulation.

a) Capital accumulation – growth of monetary and material means necessary for the expansion of reproduction; the source of accumulation is surplus value. Accumulation, thus, is a capitalization of surplus value.

b) Major forms of capital accumulation:

- concentration of capital – increase of individual capitals by turning a part of surplus value into capital, i.e. capital increase at the expense of profit increase;

- centralization of capital – capital increase by voluntary or compulsory joining, merge of individual capital of two or more entrepreneurs or by takeover of some capital.

5) Means of capital division.

Physical depreciation - process of loss by elements of the based capital of the use value.

Moral depreciation - loss by a fixed capital of a part of the cost which has not time to be transferred on cost which has not time to be transferred on cost of a created product owing to acceleration of scientifically technical progress.

Amortization is understood as process of gradual transferring on made production of cost of a fixed capital in process of its deterioration. The attitude of the sum of depreciation charges to cost of the fixed capital, expressed in percentage, refers to as a rate of depreciation.