Accounts

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Querist : Anonymous (Querist)

03 August 2011 In accounts what is the meaning of
" reserve" and
"Capital Reserve"..

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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03 August 2011 Reserve is the funds earned but not yet used or utilised.
Capital Reserve is a reserve created for specified purposes as required by law, out of the reserve fund as defined above.

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CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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03 August 2011 CAPITAL RESERVE in BOOKISH LANGUAGE:
That part of shareholders' funds that comes from accumulated capital surpluses; for example from an upward revaluation of capital assets. The term is also used in an everyday sense to refer to accumulated surplus profits.
Account that is reserved for long-term capital investment projects or any other large and anticipated expense(s) that will be incurred in the future. This type of reserve fund is set aside to ensure that the company has adequate funding to at least partially finance the project.

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Kumar Babu.G

Kumar Babu.G (Expert)
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03 August 2011 Capital Reserve:
A resource created by the accumulated capital surplus (not revenue surplus) of an organization, such as by an upward revaluation of its assets to reflect their current market value after appreciation. Allocating such sums to capital reserve means they are permanently invested and will not be paid as dividends.

Revenue Reserve:
It is below the line item in P&L a/c.i.e.,resource created through appropriation out of the profits.It
is used for distribution of dividends.

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
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03 August 2011 Reserve is a braod category. it includes Revenue Reserve and Capital Reserve.

RR is Free distributale and come from P&L accounts appropriations.

CR is also distributalbe but lots of restrictions and in specified cases only. this reserve is created from the transactions in the nature of capital nature.