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Difference between capital reserve and reserve capital
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Difference between capital reserve and reserve capital
A portion of profit set aside that can be used for specific purposes only is known as Capital Reserve. Reserve Capital is that form of uncalled share capital that can be called up by the company only in the event of the liquidation of the company.
Capital Reserve the result of accumulating capital profit, whereas Reserve Capital is created out of authorized capital.
On the equity & liabilities side of the Balance Sheet, Capital Reserve appears under the head Reserves & Surplus. Unlike Reserve Capital, which is not disclosed at all.
There is a compulsion in the creation of capital reserve by every company which is not in the case of reserve capital.
For the creation of reserve capital, the special resolution should be passed by the company at Annual General Meeting (AGM).
Capital Reserve has various uses like writing off fictitious assets, or capital losses, etc. but Reserve Capital is used only when the company goes into liquidation.
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Difference between capital reserve and reserve capital
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Difference between capital reserve and reserve capital for Class 12 2025 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Difference between capital reserve and reserve capital covers all topics & solutions for Class 12 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Difference between capital reserve and reserve capital .
Difference between capital reserve and reserve capital for Class 12 2025 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Difference between capital reserve and reserve capital covers all topics & solutions for Class 12 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Difference between capital reserve and reserve capital .
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