Companies Act statutory reserves

In the balance sheet, these reserves appear in the shareholders’ fund section under ordinary share capital at nominal value.

Share premium

Revaluation reserve

Profit and loss account

The difference between share price and nominal value of shares on the date of issue of new shares in the entity

Accumulated increase in the value of assets and investments since initial capitalisation, less accumulated decreases, less release of revaluation reserves on sale, up to the value of original cost recorded.

Accumulated realised & unrealised gains less accumulated realised & unrealised losses since the start of trading

Credit full amount to share premium reserve

Credit to Properties revaluation reserve and Investment revaluation reserve

Increase/decrease at each year end by the

Not distributable

Not distributable

Realised gains and losses are distributable to shareholders via dividends

Can only use to write off cost & discount of share issues & debenture issues, or premium on redemption of shares or debentures.

Can issue bonus shares out of share premium.

Cannot be a debit balance. Write off reduction in value of an asset in excess of credit balance on revaluation reserve to P&L.

Use for increase or decrease in MV of assets and investments, deferred tax effect of revaluations, revaluation of assets available for sale to fair value.

Dividends can only be distributed out of a credit balance on the profit and loss account. Exclude unrealised gains and losses