Archive about 'Provision and Reserve'

Explain briefly the difference between Statutory Reserves and Non-Statutory Reserves

Tweet In a balance sheet, we often see reserves been categorized into statutory and non-statutory reserves. Statutory reserves are reserves a company is required to set up by law and which are NOT available for the distribution of dividends And Non-statutory reserves are reserves consisting of profits distributable as dividends, if the company so desires. […]

Provision For Sales Discount /Discount Allowed

Tweet In my other articles, we have dealt with the provision for doubtful debts and provision for stock obsolescence.   Now, in this article, we shall look at a provision called: Provision for Sales Discount or Discount Allowed   To solicit for prompt payment from the company’s trade debtors, Cash discount which is an allowance […]

Difference Between Provision And Reserve

Tweet Quite a number of us use the word provision and reserves interchangeably as if they are the same but actually there is a very great difference between them. SO LET’S LOOK AT WHAT IS¬† CALLED A¬†PROVISION: A Provision: Is an amount written off to provide for depreciation, or diminution in value of assets or […]