general reserve

Definition

Any retained earnings from a company's profits. General reserves can be divided into either specific, general or legal. Specific reserves can include a reassignment of dividends to shareholders; general reserves are saved to offset potential future losses; legal reserves can include money set aside for litigation or revaluation.

Use general reserve in a sentence

Each company does something different with their general reserves, some may split it up and issue it out to employees as bonuses while others may keep the excess money in case of debt in the future.

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