Capital income

What exactly are you meaning by 'capital income'?? If you mean capital paid in by the owner, then this appears on the Statement of financial position. If you mean income from selling a non-current asset, then it is the profit or loss on sale that appears in the Statement of Profit or Loss (under the same heading as depreciation was appearing for the same asset).

Q1) 'The profit/ losses from the sale of non-current assets are included in the statement of profit or loss of a business, for the accounting period in which the sale takes place.' Under which heading would the profit/ loss from sale fall under in the Statement of Profit/Loss? Q2) Going back to what you said about the profit/ loss from the sale of an asset appearing the the SFP. Does it appear under the cost of the asset (as with depreciation)? E.g. : $ $ Asset at cost 5'000 Capital Income (profit) 2'000 How then would the carrying amount be reduced to $0? Thank you!

I realised that I had mistyped in my previous answer. I have corrected the final paragraph and I think that should answer both of your questions. I do suggest that you watch the free lecture on depreciation.