Which of the following is/are a capital receipt for the government ?

(A) Loans taken by the government from the public

(B) Borrowings from foreign countries and Institutes

(C) Disinvestment of assets

The correct answer is All - A, B and C.Key Points

• Capital receipts refer to the inflow of funds that create liabilities or reduce assets for the government.
• Loans taken by the government from the public, borrowings from foreign countries and institutes, and disinvestment of assets are all examples of capital receipts.
• Loans taken by the government from the public are a form of borrowing and create a liability for the government.
• Borrowings from foreign countries and institutes also create a liability for the government and are usually accompanied by conditions and terms of repayment.
• Disinvestment of assets refers to the sale of government-owned assets like shares, land, or buildings, and generates revenue for the government.

Additional Information

• Capital receipts are earnings from non-routine or infrequently occurring activity.
• An organization's primary or consistent source of income is not capital receipts.
• Additionally, due to their capital nature, these receipts are displayed on a company's balance sheet rather than in the income statement or profit and loss account.
• The recording of these receipts follows the accrual method.
• Additionally, unlike revenue receipts, capital receipts cannot be used for the distribution of profit due to their non-recurring nature.