what are capital receipts? Give two of such receipts.
Answers
Explanation:
1) Sale of shares: A receipt from the sale of shares of public enterprise is a capital receipt as it leads to the reduction in assets of the government and disinvestment. 2) Recovery of loans: Government grant loans to state government or union territories.
Explanation:
Capital receipts are receipts that create liabilities or reduce financial assets. They also refer to incoming cash flows. Capital receipts can be both non-debt and debt receipts. Loans from the general public, foreign governments and the Reserve Bank of India (RBI) form a crucial part of capital receipts.
examples
Cash received from sale of fixed assets.
Amount of loan received by the company from a bank.
Capital invested in the business by a new partner.
Consideration received by a company through sale of its license to produce a well marketed drug to another company.