What is capital reserve?

Answer 1

In accounting, especially for government operations, a "capital reserve fund" holds money that the officers or taxpayers have set aside for a specific purpose. The fund can be invested and grown, but can only be spent on the allowed purposes, unless new legislation is passed. The general fund can be spent for any legal purpose, or portions can be "earmarked" for a particular purpose, or put into capital reserve for spending on that purpose later.

Answer 2

Capital reserve is a type of account on a 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.

Answer 3

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 that will be incurred 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.