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What are the capital receipts?
61 Lectures 1 hours
43 Lectures 33.5 hours
Capital receipts are a receipt, which creates a liability or decreases the assets of an organization or any business. They increase the total capital of the company.
These can be debt receipts and non-debt receipts. These are shown in the balance sheet rather than the income statement. This is done because; the money/funds are generated from non-operating business activities. Capital receipts are non-recurring in nature.
Debt capital receipts are the receipts, which does not incur any future repayment for the government. Some of the examples are disinvestments, loan and advances recovery etc.
Non-debt capital receipts are the receipts, which are repaid by the government. Some of the examples are short term borrowings, external debts, market loans etc.
The sources of capital receipts are as follows −
- Loan recovery.
- Savings (small).
- Amount received after selling fixed asset
- Capital invested by new business partner
- Loan received from bank
- Considerations received etc.
How to capital receipts records in balance sheet (some examples)
Selling a fixed asset (recorded in balance sheet)
|Cash (asset) account||Fixed asset account|
Selling business shares (recorded in balance sheet)
|Cash (asset) account||Equity account|
Issues debt (recorded in balance sheet)
|Cash (asset) account||Loan(liability) account|
- Compare capital receipts and revenue receipts
- What are the revenue receipts?
- What are the characteristics of Capital Budgeting Decisions?
- What are the major functions of capital markets?
- What are the three forms of Capital Market Efficiency?
- What are the attributes of a Perfect Capital Market?
- What are guiding principles of capital structure?
- What are the Three Levels of Capital Budgeting Decision-Making?
- What is Capital Budgeting?
- What is Capital Rationing?
- What are Gordon's arguments regarding uncertainty of Capital Gains?
- What is the Traditional Approach of Capital Structure?
- What is the Valuation Approach of Capital Structure?
- What is the capital expenditure and its factors?
- What is Capital Allocation Line?