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Reserve Capital and Capital Reserve

Mukesh Kumar Gupta (Accountant ) (66 Points)

24 May 2011

Sir,

WHAT IS THE DIFFERENCE BETWEEN RESERVE CAPITAL AND CAPITAL RESERVE?

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4 Replies

govind (Account & Finance) (21 Points)
Replied 24 May 2011

Sir

What Is Capitalisation ????

Regards

Govind

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CMA Sameer Epari (CA Final Student) (409 Points)
Replied 24 May 2011

CAPITAL RESERVE

A resource created by the accumulated capital surplus (notrevenue surplus) of an organization, such as by an upwardrevaluation of its assets to reflect their current market valueafter appreciation. Allocating such sums to capital reservemeans they are permanently invested and will not be paidas dividends.

RESERVE CAPITAL

Part of the authorized capital of a firm that has not been called up and is, therefore, available for drawing in case of aneed. AT THE TIME OF WINDING UP OF COMPANY..

CMA Sameer Epari (CA Final Student) (409 Points)
Replied 24 May 2011

CAPITALISATION

Capitalisation is the addition to the balance sheet as an asset of an amount that could otherwise have been treated as an expense. For example, if a part of R & D expenditure is capitalised it will be added to the balance sheet as an intangible asset, and then amortised. If it is not capitalised, then it will simply be shown as a cost on the P & L.

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