Capital reserve

Posted by Bomillion PM | on Fri, 30/03/2012 - 12:40 781 2 comments | report

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?

Comments

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What do you think?

Chris Smail | Fri, 30/03/2012 - 14:25

To show it as something akin

Carlos_Fandango | Fri, 30/03/2012 - 17:06