WordNet-Online
Free dictionary and thesaurus of English. Definitions, synonyms, antonyms and more...
Hint: double-click any word to get it searched!

	Enter your search terms Submit search form
	Web www.wordnet-online.com

Definitions from WordNet

Definitions from the Web

Term: Valuation Reserve

Description:

A valuation reserve is an accounting term referring to funds set aside to cover potential losses or fluctuations in the value of assets. It provides a cushion against unexpected changes in market conditions or asset values, ensuring stability and protection for an organization's financial position.

Senses and Usages:

1. Accounting: In accounting, a valuation reserve is a reserve created to account for potential decreases in the value of assets, such as investments, stocks, or real estate.

2. Company Accounting: In company accounting, a valuation reserve represents a portion of a company's retained earnings set aside to cover potential losses due to asset depreciation.

3. Insurance: In insurance, a valuation reserve serves as a provision made by an insurer to meet anticipated future obligations related to potential claims or liabilities.

Sample Sentences:

1. Accounting:

• The company established a valuation reserve to account for potential losses in the value of its stocks.
• Before finalizing the financial statements, the accountants recalculated the valuation reserve to reflect the latest market trends.

2. Company Accounting:

• The board of directors decided to increase the valuation reserve to safeguard against potential asset depreciation.
• With the valuation reserve in place, the company demonstrated its commitment to maintaining financial stability amid economic uncertainties.

3. Insurance:

• The insurance company reviewed its valuation reserve to ensure it could cover potential future liabilities arising from customer claims.
• By significantly increasing their valuation reserve, the insurer sought to proactively mitigate potential financial risks.

Related Products:

To explore related products on Amazon:

• Accounting Software
• Company Valuation Books
• Insurance Provision