08 December 2011
The Reserve which is created out of the capital profit is known as capital reserve. It is created out of the profit of some specific transactions of capital nature. It is not available for distribution of dividend to shareholders, it is used to meet capital loss. Items of Capital profit: 1.Profit on revaluation of assets & liabilities 2.Profit on sale of fixed assets 3.Profit on forfeiture of shares 4.Profit on redemption of debentures 5.Profit on purchasing a running business etc
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