Reserves & Surplus

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(Querist)


26 September 2010

Dear Sir ,

Could anybody please explain about what is Reserves and surplus ??

Thanks,

Krishna


CA Shailesh Kumar Bhagat (Expert)


27 September 2010

Reserve is created by debiting the P/L account for particular purpose as per provision of various law. However surplus is the residual amount of P/L account after all the adjustments and appropriations.


CMA. CS. Sanjay Gupta (Expert)



27 September 2010

Reserve & surplus
amounts retained in the business and not distributed to owners. Reserves can be:

* Profits made and not passed on to owners. These are some times known as retained earnings.
* Capital reserves which can not be passed on to owners and represent the perceived increase in valuation of some fixed assets.



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