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Hi! Appreciate if you could help with clarifying what exactly are revenue reserves and capital reserves.
I understood the concept that revenue reserves are generated from the operations of the business and that they are distributable to shareholders, while capital reserves are not distributable. So retained earnings is obviously an example of a revenue reserve, but what about revaluation reserve of NCA or the profit on selling of NCA? The idea is vague and I’m not too clear about the concept.
Can you help me with examples of accounts that ARE distributable and that are NOT?
Thanks for you attention! Looking forward to hear from you 😀