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When capital reserve is created and what the uses of capital reserve??

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Question ajoutée par Murtaza Sidhpur wala , Accountant and Inventory Manager , Khalid -Al-Dabbus Tailoring Material Co. W.L.L
Date de publication: 2015/04/21
Muhammad Rehan Tahir  ACCA
par Muhammad Rehan Tahir ACCA , Treasury Manager , Farouk, Maamoun Tamer & Company

 

Capital reserve is created when there is capital profit i.e. profit on sale of assets or upward revaluation of assets. These profits are held under capital reserve heading and are not for distribution of dividends to shareholder. Capital reserve have very few uses, one of them is to issue bonus share, which leaves the retained earnings figure intact and thereby allows for dividends to be paid in future years

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