So, don't confuse this with current account. It hates that. They're like siblings who are both actors and look kind of similar, but one (current account) is way more famous. Capital account is like the Billy Baldwin/Kate Mara in this equation.
Current account measures money moving in and out of a country as part of foreign trade...exports/imports as well as just chunks of cash getting moved. Capital account measures foreign ownership of domestic assets (as well as U.S. ownership of overseas assets). So, if a Chinese company buys the Statue of Liberty, that would get recorded in the capital account figures. But if China buys a bunch of U.S. copper to make its own statue in China, that would get recorded under current account.
The U.S. government reports these figures on a monthly basis, with people focusing on the changes over time. A positive reading for capital account on one of these monthly reports means foreigners bought more U.S. assets or U.S. companies have sold their overseas assets. Actually, there's always a mixture of both, but a positive number means more foreign buying than U.S. selling. ("Positive" here means "above zero," not necessarily "positive" meaning "good." Whether it's good or not is more of a political/philosophical decision...you're on your own on that one.)
A negative number (below zero) means either foreign holders are selling U.S. assets, or U.S. companies are increasing their holdings of foreign assets (again, we're talking on a net basis). Basically, cash is moving out of the country.
Despite tensions stemming from people mixing them up all the time, don't worry about the relationship between current account and capital account. They're cool. The two of them work with each other all the time...together, they make up a country's balance of payments.
Related or Semi-related Video
Finance: What is a Current Asset?16 Views
Finance, a la shmoop. What is a current asset? Current yeah it's kind of a [Picture of a currant on a plant]
socialist raisin there, you know they all look about alike but that's a [Soldiers marching in front of Stalin with currants for heads]
currant and has nothing to do with current as cur-rent remember it like
your rent comes due soon, you rent a place for a year or less usually or at [Guy sticks his head out of pile of overdue bills]
least that's how long, you know lock in your rental rate. So if your [Someone signing a contract]
asset is current then it can be turned into cash within a year. That's how we
remember it here around Shmoop. Examples? A bond coming due in a year or less. [Bond document]
Companies store their cash all the time in short term paper like certificates of
deposit or Bank CDs which come due in less than a year. that's a current asset. [List of short-term paper]
And companies buy these kinds of bonds so they get a little more interest than
from their banks you know checking account. They buy stocks as well, shares [New interest rate is very small]
of goog can be easily converted into cash quickly. Shares in Google are a [Current asset stamp]
current asset. Ounces of gold, yep easily a current asset. All right you get the
idea, so what's not current well fourteen thousand acres of solar panel land that [Huge fields full of solar panels]
your company owns. If you ever had to sell it while there are very few buyers
and it likely would take more than a year just to figure out all the [Calendars popping up]
regulatory restrictions on selling it. A big old factory well can't sell that on [Red cross appears on a factory]
Amazon or Ebay, definitely not current. Your brand equity
in your corporation like the relationship you've developed with your
consumers, yeah it's another non-current asset you can't exactly go to the bank [Guy going up to the bank and pleading]
and convert brand loyalty to USD. So that's it current assets they live here [Arrow pointing to current assets on a balance sheet]
on this side of the balance sheet way up top in the good view seats high on the [Current assets in a tree]
vine of the tree. So put down those currants, stop ranting about the [Stalin holding a currant]
proletariat and for God's sake just buy some raisins. [Guy pointing to a box of raisins]
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