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Treatment of capital reserve

Bharat Goyal (CA Job) (16 Points)

10 May 2007

[face=Arial][size=14][color=black]I want to Know about the treatment of copital reservein case of liquidation of company if surplus fund are available after settelment of outside liabilities.[/face][/size][/color]

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2 Replies

Sandeshmundra (13 Points)
Replied 10 May 2007

capital reserve account is a part of shareholders networth just like general reserves and thus need to be treated similarly. presence or absence of capital reserve will in no way alter the distribution of surplus funds

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Yasaswi Gomes new (Finance ) (4524 Points)
Replied 24 March 2023

Many auditing firms prepare as per tax laws and company laws. They prescribe what is a mandatory reserve. Accounting wise, you have few heads as well. The recent indas has only few heads, segregation or combination is easy if you go through it.