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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.
What is the difference between reserves and surplus?
A reserve is a planned amount, a surplus is unplanned.
Can revaluation reserve converted into shares?
Yes, a revaluation reserve can be converted into shares, but this process typically involves the company’s shareholders' approval and adherence to relevant regulatory requirements. When a company increases the value of its assets, the revaluation reserve reflects that increase, and it can be capitalized by issuing new shares to shareholders. This conversion effectively transforms the reserve into equity, enhancing the company's capital base. However, specific procedures and implications depend on the jurisdiction and the company's articles of association.
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.
Why is reserves and surplus a part of liabilities?
reserves and surplus are shown into liability side of the financial statiment, since reserve is the money set aside from the capital for future use hence defining surplus as a debit in the business thus attributing to its liabiltiness,
What is the difference between revaluation Surplus and revaluation Reserve?
Fundamentally, a revaluation surplus and a revaluation reserve is the same. A revaluation reserve is a revaluation surplus obtained from evaluation.
Is revaluation reserve a capital reserve?
Yes...revaluation reserve is a part of capital reserve.
What is surplus on revaluation of asset?
Surplus on revaluation of assets means that on the even of revaluation, more assets has appreciate in their value then depreciate.
Accounting treatment for surplus of revaluation of fixed assets?
a revaluation increase is credited to equity as a revaluation surplus, unless it's a reversal of a revaluation decrease, when it should be recognised as income.
Can a dividend be distributed from a revaluation surplus?
No, a dividend cannot be distributed from a revaluation surplus. A revaluation surplus arises from the increase in the value of assets after revaluation and is considered a component of equity, but it is not part of distributable profits. Dividends can only be paid from retained earnings or profits generated from operations, ensuring that the company maintains sufficient capital for its ongoing obligations.
Is revaluation reserve part of TNW?
Revaluation reserve is an intangible asset so it can't be part of tangible net worth . anjan
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...
Where does revaluation reserve go on the balance sheet?
Revaluation reserve is part of equity of business as shown under equity section in liability section of balance sheet.
What is the revaluation surplus?
Companies from time to time do the process of revaluating its assets and liabilities for many reasons like liquidation or selling business or any other reason. From the process of revaluation its assets and liabilities surplus or defecit generate. If there is revaluation surplus it means that assets of company has more appreciated then assets of the companies reduced in value.
Does revaluation surplus included in the computation of book value per share?
Yes, revaluation surplus is included in the computation of book value per share. It is recorded in the equity section of the balance sheet and reflects the increase in value of assets after revaluation. Therefore, when calculating book value per share, the total equity, which includes revaluation surplus, is divided by the number of outstanding shares. This means that shareholders benefit from the increased value of assets recognized through revaluation.
Is revaluation surplus included in the cash flow statement?
Revaluation surplus is deducted from net income in case of net cash flow from operations using indirect method as this is not a cash related transaction.
What is the meaning of surplus on revaluation of fixed assets?
While in the process of revaluation of assets and liabilities, if the value of some assets increase more than the decrease in the value of some fixed assets then the difference of this increase and decrease if positive is called surplus on revaluation of fixed assets.
