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Difference between Reserve capital and Capital …

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Difference between Reserve capital and Capital Reserve

Posted by Prateek Seth 6 years, 9 months ago

CBSE > Class 12 > Accountancy

1 answers

Gaurav Seth 6 years, 9 months ago

<th>BASIS FOR COMPARISON</th> <th>CAPITAL RESERVE</th> <th>RESERVE CAPITAL</th>

Meaning	The profit earned by the company through special transaction, that is not available for distributing dividend to shareholders is known as Capital Reserve.	The part of uncalled capital, that is called up only on the event of company's liquidation is known as Reserve Capital.
Created out of	Capital profits	Authorized capital
Disclosure	On the equity & liabilities side of the balance sheet under the head Reserve and Surplus.	Not disclosed at all
Need of creation	Mandatory	Voluntary
Specific condition	No such conditions	Special Resolution should be passed at AGM
Utilization	To write of fictitious assets or capital losses etc.	Only when the company is about to wind up.

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