Doubt regarding capital receipts

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In ICWA's study material, it is given that

"Capital receipts cannot be utilised to create a reserve fund" and also stated

"Capital receipts are sources for creating capital reserves".... I am confused, for what type of reserves, capital receipts can be used??

please can anybody clear my doubt..

Replies (1)

COST ACCOUNTANT

217 Points Joined May 2010

Dear 87pari,

There is a difference between the term "RESERVE FUND" AND "CAPITAL RESERVE"

Reserve fund creation is towards specific investment (Sinking Fund)

and the same is not as Capital Reserve.

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