Explanation:

Profit Arisen from Non-recurring transactions is called capital profit. capital profit should be transferred to the Capital Reserve account. Which appears on the liabilities side of the balance sheet

Capital Profit includes:

• Profit earned on the sale of fixed assets(excess of selling price over the cost price).
• The premium on the issue of securities.
•  Profit from the absorption of another firm.
•  Discount on the redemption of securities
• Profits prior to incorporation.
• Profit remaining on Re-issue of forfeited share

Compensation received on the termination of a contract is not a capital profit