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Define capital reserve?
Capital reserve is the amount created to increase in market value of assets at the time of revaluation of assets.
Why is capital redemption reserve created?
No
What is the use of capital redemption reserve?
A capital redemption reserve is a reserve created by a company to hold funds that are set aside for the purpose of redeeming or buying back its own shares. This reserve is typically established when a company repurchases its shares or when it reduces its share capital, ensuring that the company's capital remains intact and that shareholders are protected. The funds in this reserve cannot be distributed as dividends, as they are meant to maintain financial stability and comply with legal requirements regarding capital maintenance. Overall, it serves to enhance shareholder confidence and reinforce the company's financial structure.
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.
Is securities premium capital reserve or not?
i think it is a capital Reserve because it has limited use.it can be used only for 5 purposes i.e. in accordance with sec.78 and for buy back in accordance with sec.77A triyambak143@gmail.com
Can investment depreciation reserve be considered as free reserve to compute as tier you or tier ii capital?
Investment deportation reserve not considered as free reserve
What are free reserves under companies act 1956?
investment allowance reserve, capital reserve received in cash, security premium received in cash,capital redemption reserve,
Is revaluation reserve a capital reserve?
Yes...revaluation reserve is a part of capital reserve.
What is the difference between capital reserve and reserve capital?
Capital reserve is a reserve created to deal with general, unspecified contingencies such as inflation. It is a fund set aside for the specific purpose and can not be distributed for other uses. Normally it is legally not distributable as dividends to shareholdersReserve Capital is the part of the Authorised capital which is not yet called up
Difference between Debenture Redemption Reserve and Capital redumption Reserve?
The Capital Redemption Reserve is a fund that secures a creditor. Debenture Redemption Reserve is for the purpose of security payments only.
Is revenue reserve a free reserve?
no
Define capital reserve?
Capital reserve is the amount created to increase in market value of assets at the time of revaluation of assets.
Why is capital redemption reserve created?
No
Can revaluation reserve be use for bonus issue?
Yes it can use any of the capital reserves for the purpose, like Share Premium Account, Capital Redemption Reserve & Revaluation Reserve...
What is the accounting treatment of capital reserve?
Capital reserve: Capital reserve represents surpluses or profit in respect of certain type of transaction: example, on scale of a fixed assets at a price in excess of cost,realisation of profit on issue of fortified shares etc. it is a reserve, which doesn't include any amount regarded as free for distribution through the profit and loss account. It includes share premium, capital redemption reserve , development rebate reserve . profits on reissue or fortified shares it also includes any grants received from central or state government or other assets gifted by central or state governments free of cost are nationally valued and credited to capital reserve. a) Grant-in -aid from the government of India . b) Grant-in aid from others. Government grants defined: government grants are assistance by governments in the form of transfer of resources to an enterprise in return for the past and future compliance with certain conditions relating to the operating activities of the enterprise. Non - monetary government grants: the non -monetary government grants may be in the shape of free land or other resources for the use of the company. The capital reserve may be utilized in the following manner: a) To utilized for writing down fictitious assets or losses (subject to provision in the articles) or for issuing bonus shares. But the amount of share premium or capital redemption reserve account can be utilized only for the purpose specified in section 78 and 80 respectively of the companies act. b) To write -off capital losses on transfer of assets received free of cost or assets acquired out of grant, which had been accounted for under capital reserve.
What is the difference between retained earnings and revenue reserve?
Capital reserve is capital set aside for specific future purpose such as building a new facility in the near future. It would be like you saving to buy a new a car. Reserve capital is money set aside for unforeseen issues. It's like a saving account or emergency fund that has no specific earmark.
Is share premium a capital reserve?
yes
