Reserve capital and capital reserve are two distinct financial concepts. This article will explain the differences between them, as well as their implications for businesses and investors. It will also discuss how each concept affects a company's balance sheet.
About Difference Between Capital Reserve And Reserve Capital
| Capital Reserve | Reserve Capital |
|---|---|
| Money set aside for future investments | Funds held by a company to meet obligations |
| Used for long-term growth | Retained earnings used for short-term needs |
| Not available for distribution | Can be distributed as dividends |
| Also known as capital surplus | Also known as retained earnings |
| Created from profits and/or share issues | Accumulates over time through profits |
| Included in shareholders' equity | Part of the balance sheet |
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