RESERVES

reserves: translation

Part of shareholders' funds on a company's balance sheet. All parts of shareholders' funds apart from share capital are reserves, such as the share premium account, the profit and loss account and the revaluation reserve. Dresdner Kleinwort Wasserstein financial glossary

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reserves re‧serves [rɪˈzɜːvz ǁ -ɜːr-] noun [plural]

1. FINANCE a company's profits from previous periods of time that have not been paid to shareholders:

• They have invested their reserves very conservatively.

• It may dip into (= use part of ) its cash reserves of $800 million to pay the company in cash.

2. ACCOUNTING amounts kept aside by a company in its accounts to be used if needed.The amount a company has in reserves has to be taken away when calculating profit for a particular period of time:

• The company had a loss of $15.2 million, or 74 cents a share, after setting up reserves to reflect property depreciation (= falls in the value of property it owned ) .

ˌbad ˈdebt reˌserves ACCOUNTING

amounts shown in a company's accounts that are owed by customers etc and will probably never be paid. These are taken away when calculating profits ; = bad debt Bre:

• The increase in bad debt reserves results from financial problems at one of the company's major customers.

ˌcapital reˈdemption reˌserves also capital redemption reserve ACCOUNTING

a part of a company's reserves and capital from money invested in shares that is not allowed to be given to shareholders in the form of dividend S

ˌhidden reˈserves ACCOUNTING

amounts of money which are difficult to find in a company's accounts because they are not stated openly:

• The bank maintains hidden reserves, which can be used to boost disclosed profit figures.

revaluˈation reˌserves also revaluation reserve ACCOUNTING PROPERTY

amounts in a company's accounts showing increases in the value of property that it owns, following a re-calculation of its value:

• The investment property was valued at open market value during the year, resulting in a surplus of £40,000 which has been credited to the revaluation reserve.

3. also ˈbank reˌserves FINANCE BANKING money held by a bank and used to pay out money to customers when they ask for it. The amount that must be kept in this way is decided by government:

• The Bank of Japan slashed by 40% the reserves banks must keep at the central bank.

ˌcapital reˈserves FINANCE

money that a company, financial institution, or government has available for future spending:

• Germany has built up great capital reserves.

ˈcurrency reˌserves also ˈforeign reˌserves , interˈnational reˌserves ECONOMICS

money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign debts:

• a sharp drop in Japan's foreign reserves

• The new Government had slapped an embargo on the importation of components to conserve its diminishing currency reserves.

ˈdraining reˌserves ECONOMICS

actions that the Federal Reserve System takes to reduce the amount of money in the country's economy by restricting the amount of money banks have available to lend

ˈgold reˌserves ECONOMICS

stocks of gold, usually those held by a country's central bank:

• The nation's gold reserves rose $1 billion to $11.058 billion.

ˌloan-ˈloss reˌserves BANKING

money kept by a bank and used to cover loans it has made that will probably not be paid back:

• The bank hopes to boost loan-loss reserves to around 55% of its unsecured loans.

4. an amount of something valuable such as oil, gas etc:

• Petroleum reserves now amount to the equivalent of 142 days' supply.

• The company needs to focus on building its coal and copper reserves.

ˈproven reˌserves

the amount of oil or natural gas known to exist in a particular place:

• There are some 257 billion barrels of proven reserves in the field, 25% of the world's supply.

— see also capitalization of reserves

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A company's reserves are primarily profits retained in the business and accumulated over the years, rather than paid out by way of dividends. They are usually held as cash or in highly liquid assets. Shareholders have no rights over reserves so that a company can disburse them or not, as it sees fit, within the usual accounting rules. The term reserves is also used to describe the official foreign exchange reserves held by governments to ensure they can meet current and near-term claims.

► See also Dividend, Retained Earnings.

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reserves [plural]

► BANKING, FINANCE the amount of foreign currency or gold that a central bank has at a particular time: »It has around 8bn dollars in foreign currency reserves.
»No country has limitless reserves of gold.

► ACCOUNTING money kept by a company for a particular use, for example, a future project or emergency: use/dip into reserves »It became necessary for the company to dip into its reserves.
»cash/money reserves

→ See also BANK RESERVES(Cf. ↑bank reserves), CAPITALIZATION OF RESERVES(Cf. ↑capitalization of reserves), CASH RESERVES(Cf. ↑cash reserves), FOREIGN EXCHANGE RESERVES(Cf. ↑foreign exchange reserves), HIDDEN RESERVES(Cf. ↑hidden reserves), LEGAL RESERVES(Cf. ↑legal reserves), PROVEN RESERVES(Cf. ↑proven reserves)

Main Entry: ↑reserve

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