Capital Reserve Vs. Reserve Capital

This query is : Resolved

Share Report Follow Query Ask a Query

Rachana

Rachana (Querist)
Follow

26 April 2008 Please
Explain me what is difference between "Capital Reserve" and "Reserve Capital"

Krishan Aggarwal

Krishan Aggarwal (Expert)
Follow

26 April 2008 Please Post my answer here which i send

Rachana

Rachana (Querist)
Follow

26 April 2008 Sir, where you have posted answer?

Rachana

Rachana (Querist)
Follow

26 April 2008 Message :
Reserve Cap: is the Capital reserved by the Comapny in other words not issued to Public, (Authorised Capital-Capital Issued to Public) Capital Reseve:Capital Reseve is the Profit part of Capital which the Company earned from Capital Part or from Long term Contracts. Capital Reserved may be used by Company only for some Specific purpose ( not like revenue reserver from where the Company may distribute the Profit) so Reserve Capital and Capital Reserve is totally different thing it cannot be said that what the difference between them. One is he Part oF Capital and the second is the part of Profit.
From : Krishan Aggarwal

Rachana

Rachana (Querist)
Follow

26 April 2008 Thank you sir

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
Follow

26 April 2008 Capital Reserve- Reserve created by the capital surpluses( distinguished from the revenue surplus) of an organisation .
Examples:

Surplus resulting from revaluation of assets of the firm to its current market value;Surplus resulting from business
purchase-the value of assets being more than the consideration paid, Long term capital gains resulting from transfer of capital assets, surplus amount on forfeiture of shares,etc., are also examples of capital reserves.

Reserve Capital- Part of the authorized capital of a firm which has not yet been called up and is available for drawing in
case of need.

It can be noted while the former is as a result of surpluses resulting from assets, the latter is contributory in nature.