Valuation Reserve (Noun)
Meaning
A reserve fund created by a charge against profits in order to provide for changes in the value of a company's assets.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company created a valuation reserve to account for the fluctuation in the market value of its investments.
- As required by accounting standards, the corporation set up a valuation reserve to cushion the impact of changes in asset values on its financial statements.
- To protect itself against market volatility, the investment firm established a valuation reserve that was periodically reviewed and adjusted.
- A significant portion of the company's net income was allocated to the valuation reserve, ensuring that the balance sheet reflected a realistic valuation of its assets.
- In order to provide a more accurate picture of its financial position, the firm drew upon its valuation reserve to absorb losses incurred from asset devaluation.