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Is general reserve same as free reserve?
Answers (5)
Sahibdeep Singh
Yes
Just to clarify here, general reserve is a type of free reserve yeah. There could be other reserves which are included in Free reserves like Balance of Profit and Loss Account, Dividend Equalization Reserve etc. Basically, free reserves are those which are available for distribution as dividend. Happy Studying !
Nisha Manikantan
Dividend equalization reserve is a special reserve and not general reserve!
Thanks for adding value. Yes, it's a special reserve, but a free reserve only. A company may not earn consistent profits every year. To maintain similar level of dividends, it may transfer amounts to a special reserve.