Capital receipts refer to cash inflows that arise from financial activities instead of operating activities. They are non-recurring in nature and can create liabilities for a business. Capital receipts are not a businesss main income source, and they either reduce the assets or increase the liabilities of a business. Capital receipts are recorded on a companys balance sheet instead of the income or profit and loss statement. They are generated due to various transactions, such as the sale of non-current assets, investments, borrowings, and grants used to finance capital. Capital receipts are not related to the normal daily activities of a business and happen once in a while. Examples of capital receipts include the sale of fixed assets, debts, and shares. Capital receipts do not influence the profit or loss of a business and are booked soon after the establishment of a right to receipt.