Capital reserve

Our group parent company wishes to strengthen our balance sheet by introducing cash into my company. They want to show the cash as a 'Capital Reserve' alongside Share Capital on our balance sheet. Our auditors, however, say that the capital reserve must be shown as a long term liability. This would not increase our net worth. Which is right?

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What do you think?

Chris Smail |
Chris Smail's picture

To show it as something akin

Carlos_Fandango |