29 May 2012
Diffrence between capital reserve and reserve capital is as follow
CAPITAL RESERVE : A reserve which is created out of the capital profit is known as capital reserve. It is not created out of the profit earned in normal course of the business. Capital reserve is created out of the profit earned from some specific transactions of capital nature. Capital reserve is not available for the distribution to the shareholders. The examples of capital profit from which capital reserve is created are as follows:
* Profit on sale of fixed assets * Profit on sale of investment * Profit on revaluation of assets and liabilities * Premium on issue of shares and debentures * Profit on re-issue of forfeited shares * Discount on redemption of debentures * Profit on purchase of an existing business Reserve Capital: It is uncalled capital which can be called up by the company in case of an emergency. It is a part of Authorized Capital. just consider a simple example You issue 1000 shares of Rs 10 each and you u called Rs 2 in application , Rs 3 in allotment , Rs 3 in first call you reserve balance Rs 2 for future requirement this is call your Reserve capital
29 May 2012
Diffrence between capital reserve and reserve capital is as follow
CAPITAL RESERVE : A reserve which is created out of the capital profit is known as capital reserve. It is not created out of the profit earned in normal course of the business. Capital reserve is created out of the profit earned from some specific transactions of capital nature. Capital reserve is not available for the distribution to the shareholders. The examples of capital profit from which capital reserve is created are as follows:
* Profit on sale of fixed assets * Profit on sale of investment * Profit on revaluation of assets and liabilities * Premium on issue of shares and debentures * Profit on re-issue of forfeited shares * Discount on redemption of debentures * Profit on purchase of an existing business Reserve Capital: It is uncalled capital which can be called up by the company in case of an emergency. It is a part of Authorized Capital. just consider a simple example You issue 1000 shares of Rs 10 each and you u called Rs 2 in application , Rs 3 in allotment , Rs 3 in first call you reserve balance Rs 2 for future requirement this is call your Reserve capital
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