Difference between Reserve Capital and Capital Reserve Class 12

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Looking for what is the difference between Reserve Capital and Capital Reserve as per the syllabus of class 12 CBSE, ISC, and state Board.

I have explained this topic in detail.

Reserve capital Vs Capital Reserve

following are the distinction between Reserve capital and Capital Reserve

S.NBasis of DistinctionReserve CapitalCapital Reserve
1.Meaning and CreationIt refers to that portion of increased nominal capital or uncalled share capital which shall not be called up, except in the event of winding up.Capital Reserve is that reserve that is created out of capital profits such as profit on the sale of fixed assets, profit on revaluation of fixed assets, the premium on issue of shares and debentures, profit on redemption of debentures, etc. These profits are not earned in the normal course of business.
2.NecessityIt is not necessary to create reserve capitalIt is necessary to create a capital reserve, in case of capital profits.
3.Realized or not realizedIt refers to the amount which has not been received.It refers to the amount which has already been received.
4.Disclosure in Balance SheetIt is not shown in the company’s balance sheet.It is shown as the first item under the head, ‘Reserves and Surplus’ on the equity and liabilities side of the balance sheet.
5.ResolutionA resolution is required for its creation.No resolution is required for the creation of capital reserves.
6.Time when it can be used.It can be used only at the time of winding up of the companyIt can be used to write off capital losses or to declare a share bonus any time during the life of the company.

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