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generic · CBSE Class 11 English medium · ACCOUNTANCY · Page 41

Depreciation, Provisions and Reserves

Chapter 7: Depreciation, Provisions and Reserves · ACCOUNTANCY · EN medium

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true and fair profit or loss in compliance with ‘Prudence’ or ‘Conservatism’ concept. It has to be made even if there are no profits. Whereas creation of a reserve is generally at the discretion of the management. However, in certain cases law has stipulated for the creation of specific reserves such as Debenture Redemption Reserve. Reserve cannot be created unless there are profits.

📖 Accounts 7 (1) · Page 41

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true and fair profit or loss in compliance with ‘Prudence’ or ‘Conservatism’ concept. It has to be made even if there are no profits. Whereas creation of a reserve is generally at the discretion of the management. However, in certain cases law has stipulated for the creation of specific reserves such as Debenture Redemption Reserve.

Reserve cannot be created unless there are profits.

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