capital reserve and reserve capital means the same thing. comment

 Difference between Reserve Capital and Capital Reserve

Reserve Capital

Capital Reserve

1. Reserve Capital is the part of uncalled capital, which shall not be called except in the event of winding up of the company

1. Capital Reserve is maintained out of the capital profits of the company

2. It is not mandatory to create Reserve Capital

2. Capital Reserve is mandatory to be created in case of profit on reissue of forfeited shares

3. It is not to be disclosed in the Balance Sheet of the company

3. Capital Reserve is to be shown in liability side of the balance sheet of the company under the heading of ’Reserve and Surplus’

4. Reserve Capital cannot be used to cover capital losses

4. Capital Reserve is used to cover capital losses and to issue bonus shares to shareholder

5. Reserve capital cannot be used to issue bonus shares

5. Capital reserve realized realised in cash can be used to issue bonus shares

6. Reserve capital is not received because it is part of uncalled capital

6. Capital reserve is that profit which has been realised except in the case of profit on revaluation of assets

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