Reserves

1. Accounting.

Reserves represent the amount of money ‘owed’ to the owner (shareholder) of the company.

In a profitable and conservative company, reserves will normally comprise a significant balance of accumulated undistributed profits.

2. Banking.

Deposits maintained by non-central bank monetary financial institutions with their central bank in the latter's capacity as 'the bankers' bank'.

These deposits are current account balances in favour of the depositing institution, effectively cash deposited at the central bank.

Central banks may require institutions to maintain minimum balances with the central bank, in which case balances in excess of the minimum are known as 'excess reserves'.

Of course banks publish accounts and use the term 'reserves' in the accounting sense too. Do not be confused by this.

3. Oil and gas.

Oil and gas underground or under the sea, especially when owned by a financial reporting entity.

For example, in reserve based lending (RBL).

4.

More generally, any physical or financial assets not required for immediate use, but available for future use.

See also

• Central bank
• Central bank money
• Conservative
• Depletion
• Dry powder
• Entity
• Equity
• Financial reporting
• Interest on excess reserves
• Merger reserve
• Official reserves
• RBL
• Reserve
• Reserve requirements
• Reserves account
• Revaluation reserve
• Shareholder
• Special drawing rights
• Trapped cash