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Sale of business
sale of business treated as income from business or capital receipt
Replies (1)
As per my view (Only My view)
If You are Sell Your business without any segrregation then You can treat it as Capital Receipts...
In case You will seggregate the Details then You can treat as Nature...
| BASIS FOR COMPARISON | CAPITAL RECEIPT | REVENUE RECEIPT |
|---|---|---|
| Meaning | Capital Receipts are the income generated from investment and financing activities of the business. | Revenue Receipts are the income generated from the operating activities of the business. |
| Nature | Non-Recurring | Recurring |
| Term | Long Term | Short Term |
| Shown in | Balance Sheet | Income Statement |
| Received in exchange of | Source of income | Income |
| Value of asset or liability | Decreases the value of asset or increases the value of liability. | Increases or decreases the value of asset or liability. |
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