Compare capital receipts and revenue receipts

Banking & FinanceFinance ManagementGrowth & Empowerment

Let us understand what are capital receipts and revenue receipts, before learning about their differences.

Capital receipts

These are the non-recurring income received by the company and come under investing and financial activities.

They are generated from issue of shares, government’s grants, insurance claims, bank loans or loans from financial institutions, issue of denatures etc. Capital receipts reduce an asset or will increase a liability.

Revenue receipts

These are recurring income received by the company. This comes under business activities and benefits are enjoyed in the current period only.

These are generated from services rendered, interest and rent received, discount from creditors/suppliers, sale of scrap etc.

Comparison

The major differences between the capital receipts and revenue receipts are as follows −


Capital receiptsRevenue receipts
NATURE
Non – recurring
Recurring
EFFECT
Carried to the balance sheet
Shown on income statement
EXAMPLES

  • Sale on fixed assets.
  • Receipt on loan.
  • Investment by owner/partner etc.

  • Interest on deposits.
  • Discount (from suppliers).
  • Rental income etc.

OCCURRENCE
Non-recurring and irregular
Recurring and regular.
SHOWN IN
Liabilities side of the balance sheet.
Credit side of trading in profit and loss account.
VALUE OF ASSET/LIABILITY
Either increase/decrease.
Neither increase/decrease.
raja
Published on 08-Jul-2021 07:10:27
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