Acapital asset is defined as property of any kind held by an assessee. It need not be connected to the assesse’s business or profession. The term encompasses all kinds of property, movable or immovable, tangibleorintangible, fixed or circulating. Land and building, plant and machinery, motorcar, furniture, jewellery, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, mutual funds, zero-coupon bonds are some examples of what is considered capital assets.[1][2]
This section has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)
|
In their textbook on the financial accounting, authors Clyde P. Stickney and Roman L. Weil[9] advise that the term should be avoided except in tax accounting in the US private context, to counter its usage in other contexts vaguely. For example, it is often used as a synonym for fixed assets[10] or for investments in securities.[9]
Several public sector standards in global use, notably triple bottom line accounting as defined by ICLEI for world cities, require that employees or the environment or something else be treated as a capital asset. In this context, it means managers have a responsibility to maintain, and to report changes in value as gains or losses of the capital assets.[11]
Capital assets should not be confused with the capital a financial institution is required to hold. This capital is computed from the right-hand side of the balance sheet while assets are found on the left-hand side.[9]