What is the difference between Capital reserve and Reserve Capital?

wish to know the difference between Capital reserve and Reserve capital with example please>>>

2 Answer(s)


Capital reserve is created out of capital profits (profit due to reevaluation of assets) and therefore it is not available for distribution to the shareholders, while reserve capital is that part of authorized capital of a company which is not called up by the company.

Reserve capital can be used by the company only in case of liquidation of the company while capital reserve can be used by company at any time for purchasing long term assets by the company.


differentiate between capital reserve and reserve capital

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