WebMay 11, 2024 · Dividend Equalisation Reserve; Debenture Redemption Reserve etc. Capital Reserves: They are created out of capital profits that do not arise from the normal operating activities. Such reserves are not available for distribution as dividends. These reserves can be used for writing off capital losses or issue of bonus shares in the case … WebJan 13, 2024 · To compensate for this an equalisation payment is added to the cost of new units. This is the amount of income that has arisen up to the date of purchase of the unit. …
DK Goel Solutions Chapter 17 Provisions and Reserves - BYJU
WebReserves. They are the portion of profits set aside to strengthen the financial position of a business. Generally, reserves are created to meet unknown future obligations which may arise due to miscellaneous business reasons. For example – General reserve, reserve for expansion, dividend equalisation reserve, debenture redemption reserve, capital … WebSep 23, 2024 · Specific Reserves: Reserves made out of revenue profits for a specific purpose. This may include the Dividend Equalization … gulfcoast spa port charlotte fl
Difference Between Retained Earnings and Reserves
WebThe dividend equalization reserve can be highlighted as a distributable reserve that is created to ensure that the distribution of the dividends remains stable among the shareholders despite changes in the revenue. Dividend equalization reserves belong to specific reserves. WebSome examples are Dividend equalisation reserve, Debenture redemption reserve etc. Q13: Explain the concept of ‘secret reserve’. Ans: Secret reserve is the amount by which the assets of an organization are understated or its liabilities are overstated. An entity might establish a secret reserve for competitive reasons, to hide from other ... WebJan 27, 2024 · A specific reserve is a reserve, which is created for some specific purpose and can be used only for that purpose. Examples of specific reserves are given below : Dividend equalization reserve: This reserve is created to stabilize or maintain the dividend rate. In the year of high profit, the amount is transferred to the Dividend … gulf coast speedway alvin