P2 – Difference betwee cons reserves and cons R/E

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May 31, 2014 at 11:17 am #172090
Edward
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Hi,

Can you explain the difference in the above for me and what should be included in both. Keep getting confused when completing q1 in P2 paper.

Thanks,

Ed
May 31, 2014 at 12:43 pm #172111
szparag
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R/E is retained earnings and includes just the profits from previous years and from current year.
Reserves is a much wider notion, which means everything that goes to equity, other than the share capital, ie R/E, revaluation reserves, fx exchange profit/loss, other components of equity etc.
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