LEGAL DECISIONS ON ACCOUNTING RESERVES.
The article focuses on legal decisions on accounting reserves. The hundreds of recent annual corporate reports which include one or more reserves in their statements of financial position, indicate that the condemned man is still eating a hearty breakfast. Despite the fact that indiscriminate use of the term 'reserve' in accounting was strongly criticised by committees of the two leading societies of professionals and educators in the field about five full years ago, one has only to notice in their reports for 1953 the 'General Reserve' which incorporated of over twenty-two million dollars. The opinions of accountants on the subject of reserves and their use is fairly well known. It was felt that an interesting investigation could be made, however, to determine what is the feeling of the law, as expressed by court decisions, on accounting reserves and to see what treatment the legal cases give to the generally recognized accounting principles involved. One of the reasons for the denunciation of the loose use of the term 'reserve' to cover a variety of different types of accounts is because in general usage, outside of accounting, a reserve is considered a fund of cash or other assets which is held or retained for a specific purpose.
- DOI
- 10.2308/tar-7061484
- Volume
- 30 (3)
- Pages
- 507-514
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref