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Hello professor. I will be grateful if you help me with this query.
Is revaluation reserve is capital reserve or unrealized distributable profit? Because unrealized distributable profit seems to be Revenue reserve like retained earning but unrealized profits.
I am studying Capital maintenance so it says that dividend should not be enough that it make Net Assets lower than Share Capital and other un-distributable reserve. I am confused which will be part of un-distributable reserves.
Thank you.This sentence in your post does not make sense!
“Because unrealized distributable profit seems to be Revenue reserve like retained earning but unrealized profits”
Distributable profits are those “accumulated realised profits blah blah blah less accumulated realised losses blah blah blah”
So, to answer your question, a revaluation reserve is clearly NOT a realised profit and is therefore not to be included as a realised distributable profit.
OK?
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