Capital receipts are those receipts which do not recur often, in simple words these types of receipts do not happen in normal course of business. Take the case of a restaurant, when the restaurant owner sells table or chairs then it is considered as capital receipt because the main business of restaurant owner is related to food and not furniture. Given below are some of the examples of capital receipts –
- Amount received on account of issue of fresh equity capital
- Amount received by issue of debentures
- Cash received from sale of fixed asset
- Cash received from bank loan
These types of receipts are taken to either liability side or asset side and they are not entered into profit and loss account of the company.