Components of Capital Receipts

The components of capital receipts can vary based on the type of organisation and its nature of operations. Some of the common components are as follows:

1. Sale of Fixed Assets: It is the amount of cash received by an organisation from the sale of its non-current assets like machinery, equipment, land, building, etc.

2. Grants: It is the amount of cash received by an organisation from government bodies or other organisations for some particular purposes, including infrastructure development, R&D, social welfare programs, etc.

3. Borrowings: It is the amount of cash received by an organisation through bonds or loans. The amount borrowed by the organisation is recorded in its balance sheet as a liability, and the interest paid on this amount is recorded as an expense of the organisation.

4. Investments: It is the amount of cash received by an organisation by selling its investments like bonds, stocks, mutual funds, etc.

5. Disinvestment: It is the amount of cash received by an organisation from the sale of its equity holdings in a public sector enterprise.

6. Miscellaneous Capital Receipts: It includes the amount of cash received by an organisation from any other source that is not mentioned above, such as proceeds from the sale of copyrights, patents, goodwill, etc.

 How do you calculate Capital Receipts?

In order to calculate capital receipts, firslty, determine the sources of capital inflows and then use the appropriate formula. For example, to calculate the capital receipts for non-current assets, deduct any transation cost from the sale proceeds of the non-current asset, and the resultant amount will be the capital receipt.