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Hello Team,
Concept And Meaning Capital ReserveThe reserve which is created out of the capital profit is known as capital reserve. Capital reserve is created out of the profit of some specific transactions of capital nature. It is not available for the distribution to shareholders as dividend. It is used to meet capital loss. Capital reserve is shown on the liabilities side of the balance sheet. Sometimes, it can be used to issue fully-paid bonus shares.Items of capital profit out of which capital reserve is created:* Profit on revaluation of assets and liabilities.* Profit on sale of assets* Profit on sale of shares and debentures* Profit on forfeiture of shares* profit on redemption of debentures* profit on purchasing running business
Regards,
Saiyid
