Definition
The capital account is part of a country’s balance of payments that records capital transfers and transactions involving non-produced, non-financial assets, such as debt forgiveness, transfers of ownership, patents, and natural resource rights.
Why It Matters
The capital account helps economists track how wealth and asset ownership move between countries. Although usually smaller than the financial account, it plays a role in measuring international economic relationships and understanding how nations manage long-term asset transfers and structural financial changes.
Example
If a foreign government forgives a loan owed by another country, that debt forgiveness is recorded in the capital account. Similarly, if ownership of a mineral-rights license is transferred internationally, the transaction appears in this account.