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Capital Reserve
A type of account on a municipality's or company's balance sheet that is reserved for long-term capital investment projects or any other large and anticipated expense(s) that will be made in the future. This type of reserve fund is set aside to ensure that the company or municipality has adequate funding to at least partially finance the project.
Investopedia Says:
Contributions to the capital reserve account can be made from government subsidies, donated funds, or can be set aside from the firm's or municipality's regular revenue-generating operations. Once recorded on the reporting entity's balance sheet, these funds are only to be spent on the capital expenditure projects for which they were initially intended, excluding any unforeseen circumstances.
Source: http://www.answers.com/capital+reserves?gwp=11&ver=2.3.0.609&method=3
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Example of capital reserves?
share premium
Does share capital change when bonus share issued?
When bonus shares are issued share capital also change as amount from retained earnings or reserves is utilized to issue bonus shares and it increase the share capital while decrease the reserves or retained earnings.
What are the differences between capital reserves and revenue reserves?
capital reserve is a type of account on a company's balance sheet that is reserved for longterm capital investment projects or any other large expenses that will be incurred in the future. capital reserve is a type of account on a company's balance sheet that is reserved for longterm capital investment projects or any other large expenses that will be incurred in the future.
Equity capital to total assets ratio?
Bank capital to assets is the ratio of bank capital and reserves to total assets. Capital and reserves include funds contributed by owners, retained earnings, general and special reserves, provisions, and valuation adjustments. Capital includes tier 1 capital (paid-up shares and common stock), which is a common feature in all countries' banking systems, and total regulatory capital, which includes several specified types of subordinated debt instruments that need not be repaid if the funds are required to maintain minimum capital levels (these comprise tier 2 and tier 3 capital). Total assets include all nonfinancial and financial assets.
How do you transfer reserves to share capital?
To transfer reserves to share capital, a company typically follows a formal process that involves board approval and possibly shareholder approval, depending on the jurisdiction and company bylaws. The company will pass a resolution to capitalize the reserves, which may involve issuing new shares or increasing the nominal value of existing shares. The reserves are then reclassified as share capital on the balance sheet, reflecting the change in the company's equity structure. It's important to ensure compliance with local laws and regulations during this process.
How reserves are part of capital?
Reserves are maintained from profit of current year business and profit is part of capital that's why reserves are also part of capital as if it is not maintained separately it will be included in profit or capital.
Free reserves under S372A of the companies Act 1956 whether includes capital reserves?
No, Capital reserves cannot be part of free reserves under S372A of Companies Act 1956.
Example of capital reserves?
share premium
What restrictions are imposed on capital reserves?
it can't be distributed as dividend
Main uses of fund of commercial bank?
capital and reserves
Is reserves in a balance sheet a current liability?
No reserves s part of the capital of the company. Reserves are funds help back by the company to do other things in the furture. It is not a current liability.
What is working capital in a Bank?
Total of Share capital, reserves and other funds and deposits is working capital of the bank but less revaluation reserve.
Does share capital change when bonus share issued?
When bonus shares are issued share capital also change as amount from retained earnings or reserves is utilized to issue bonus shares and it increase the share capital while decrease the reserves or retained earnings.
List and define two types of bank reserves?
Secondary Reserves- Assets that are invested in safe, marketable, short-term securities.Primary Reserves- Cash required to operate a bank.here is a third one...Excess Reserves- Capital reserves held by a bank in excess of what is required.
What are India's account balances and major features of their account balance and capital account balance and Forex reserves for 2001 to 2006?
1. capital account balance and forex reserves for the period 2001-2006 and list the major features.
What is share holders fund?
Equity Share Capital +Preference Share Capital + Reserves and Surpluses constitute the Share Holders fund
What are the differences between capital reserves and revenue reserves?
capital reserve is a type of account on a company's balance sheet that is reserved for longterm capital investment projects or any other large expenses that will be incurred in the future. capital reserve is a type of account on a company's balance sheet that is reserved for longterm capital investment projects or any other large expenses that will be incurred in the future.
