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Session Plan : Capital Receipts
Session Plan : Capital Receipts
Introduction (5 min): Define receipts and distinguish between capital and revenue receipts.
Concept & Features (10 min): Explain meaning, characteristics, and accounting treatment of Capital Receipts.
Illustrations (15 min): Show examples like issue of shares, loans raised, sale of fixed assets.
Class Activity (10 min): Students classify given items as Capital Receipts or not.
Recap & Q/A (5 min): Summarize importance and clarify doubts.
Lecture Material : (PDF, PPT)
Lecture Material : (PDF, PPT)
Learning Material (IV Quadrant Approach)
Learning Material (IV Quadrant Approach)
(Q1) : Text and Image based Content (PDF/Image Formats)
(Q1) : Text and Image based Content (PDF/Image Formats)
Capital receipts are non-recurring inflows of funds that either increase a company's liabilities or decrease its assets. They are not generated from the regular operations of a business and are typically associated with financing and investing activities. These receipts are recorded on the balance sheet and do not directly impact the profit and loss statement.
🔹 Characteristics of Capital Receipts
Non-recurring Nature: Capital receipts are infrequent and arise from specific financial activities rather than daily business operations.
Impact on Financial Position: They either create a liability (e.g., loans) or reduce an asset (e.g., sale of fixed assets), thus affecting the balance sheet.
Not Part of Operating Income: These receipts do not result from the core business activities and hence are excluded from the income statement.
🔸 Examples of Capital Receipts
Sale of Fixed Assets: Proceeds from selling long-term assets like machinery, land, or buildings.
Issuance of Shares: Funds raised by issuing equity shares to investors.
Borrowings: Loans obtained from banks or financial institutions, which increase the company's liabilities.
Government Grants: Non-repayable funds provided by the government for specific purposes, such as infrastructure development.
Disinvestment Proceeds: Funds received from selling a stake in a subsidiary or joint venture.
Insurance Claims: Receipts from insurance companies for loss or damage to fixed assets.
Recovery of Loans: Funds recovered from loans previously extended to others.
📊 Accounting Treatment
Balance Sheet Recording: Capital receipts are recorded on the balance sheet. For instance, funds from issuing shares are added to shareholders' equity, while loans are recorded as liabilities.
No Direct Impact on Profit and Loss: Since these receipts are not part of regular business income, they do not appear in the profit and loss statement.
(Q3) : Formative Assessment (Google Form/Any Other Online Quiz Platform): forms.fillout.com/t/kc58hzWQEYus
(Q3) : Formative Assessment (Google Form/Any Other Online Quiz Platform): forms.fillout.com/t/kc58hzWQEYus
(Q4) : Further Reading
(Q4) : Further Reading
R.L. Gupta & Radhaswamy – Advanced Accountancy (section on Receipts and Expenditure).
T.S. Grewal – Double Entry Book Keeping (XI & XII) – Capital vs Revenue Receipts.
S.N. Maheshwari – Introduction to Accountancy.
ICAI Foundation Study Material – Module on Accounting Principles.
Key Questions
Key Questions
Define Capital Receipts. How are they different from Revenue Receipts?
State three features of Capital Receipts.
Why are capital receipts not shown in the Profit & Loss Account?
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