Capital Reserve

Posted in Finance, Accounting and Economics Terms, Total Reads: 1034
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Definition: Capital Reserve

Capital Reserve refers to a provision for long term capital investment projects or any other large and anticipated expenditure that may be incurred in the future.

They are generally created from accumulated capital surplus and such money cannot be paid as dividend by the company.

 

Contributions to the this reserve account can be made from donated funds, government subsidies,  or can be set aside from the revenue-generating operations.

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