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RESERVE CAPITAL ACCOUNT
Kanaatov Anvar Shokirovich
Tutor at Samarkand Institute of Economics and Service
Rofeyev Damirjon Shuhratovich
Student at Samarkand Institute of Economics and Service
Kucharov Umidjon Maxmud ugli
Student at Samarkand Institute of Economics and Service
Utkirov Shoxzodjon Utkir ugli
Student at Samarkand Institute of Economics and Service
Shamirzayev Umidjon Anvar ugli
Student at Samarkand Institute of Economics and Service
Annotation:
This article explores the concept of reserve capital, its formation, components, and
accounting practices. The role of reserve capital in the financial stability of an enterprise and
proper accounting procedures are analyzed.
Keywords:
reserve capital, reserve fund, financial stability, capital formation, accounting.
The essence of the reforms being carried out in our country is aimed at being on a par with
countries with developed economies. This, in turn, is a problem related to how effectively and
quickly we can make up for the economic and technological development that has stalled for
several decades. The planned economy skills that have been formed over the years are one of the
biggest obstacles to the country joining the ranks of developed countries.
The implementation of economic measures aimed at satisfying the needs of today and all times,
not limited by limited resources, and developing, first of all, requires large financial resources.
The purpose of the Resolution of the President of the Republic of Uzbekistan No. PQ-4611 dated
February 24, 2020 “On additional measures for the transition to international financial reporting
standards” is also aimed at achieving the formation of an information environment based on the
requirements of world standards in order to attract the necessary financial resources to the
country.
Reserve capital is funds allocated to cover unexpected losses that may occur in the activities of
an enterprise, ensure financial stability and guarantee the long-term development of the company.
It also serves as a reserve for investment projects or significant expenses.
Reserve capital is reserve funds intended to ensure the financial security of the company. It helps
to keep the company in a stable state in the event of a financial crisis or unexpected losses.
Reserve capital increases the creditworthiness of the enterprise and the confidence of investors.
In the process of preparing the research work, the methods of observation, comparison,
abstraction, induction, deduction, systematic approach, comparative analysis, grouping were
used. These methods ensured the achievement of the research goal and the full implementation
of the tasks assigned to it.
The observations made showed that the requirements for accounting for private capital in the
system of national accounts and in the current legislation on the organization and maintenance of
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accounting differ from the requirements of IFRS. According to the comparative table compiled
to see these differences, it can be seen that in the system of national accounts, several accounting
objects that could be included in private capital by their nature are taken into account in private
capital.
Reserve capital can be formed from the following sources:
Allocation of a certain part of the net profit of the enterprise;
Allocations from other types of capital;
Mandatory reserves established by law;
Funds allocated on the basis of special resolutions.
In many countries, the amount and procedure for forming reserve capital are strictly defined in
the legislation.
Reserve capital is maintained on separate accounts, for example: Account 84 - Reserve capital
and savings.
Accounting entries are made as follows:
Debit: 99 — Net profit (loss)
Credit: 84 — Reserve capital
In cases where reserve capital is used, for example, to cover losses:
Debit: 84 — Reserve capital
Credit: 91 — Expenses
From a financial point of view, reserve capital increases the enterprise's resilience to crises,
which ensures its long-term stable operation. From a legal point of view, the procedure for
forming and using reserve capital is regulated by the country's legislation, which increases the
transparency and reliability of the company's financial statements.
In Uzbekistan, the practice of forming and accounting for reserve capital among small and
medium-sized businesses varies, and in some enterprises this process is not fully organized. This
increases financial risks and reduces stability. Also, discrepancies in legislation and bureaucratic
difficulties hinder the effective formation of reserve capital.
Conclusions and proposals. Reserve capital plays an important role in ensuring the financial
security of an enterprise. It is the main reserve for covering losses, managing unexpected
expenses, and maintaining stability. The system of accounting and management of reserve
capital serves to improve the financial condition of an enterprise.
The redistribution of equity elements in accordance with the requirements of IFRS allows
foreign investors to reliably assess the financial condition of an enterprise. As a result of this
opportunity, investors coming to our country and their financial and technological investments
create great opportunities for ensuring the sustainable development of the economy. The
information in this article can be used by employees of the accounting department of joint-stock
companies, scientific researchers, undergraduate and graduate students of higher education
institutions, and those who want to study independent accounting. The following proposals have
been developed:
1. Further regulate the formation of reserve capital on the basis of legislation and develop
additional instructions;
2. Introduction of uniform standards for accounting for reserve capital for enterprises;
3. Regular monitoring of the formation and use of reserve capital by financial supervisory
authorities;
4. Organization of training seminars on accounting for reserve capital for financial employees of
enterprises;
5. Introduction of tax incentives and other incentive mechanisms for the formation of reserve
capital.
References
1. Accounting Part 1: Textbook / A.A. Karimov, J.E. Kurbanbayev, S.A. Jumanazarov; – T.:
“Economics-Finance”, 2020. p.
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2. Barry Elliot, Jamie Elliot. Financial accounting and reporting. London, 2015. 17th Edition.
3. Harry I. Wolk, James L. Dodd, John J. Rozycki. Accounting Theory. 8th edition. SAGE
Publications.USA, 2013.
4. Karimov A., Kurbanbayev J., Jumanazarov S., Khalilov Sh. Financial accounting and
reporting. Textbook. - T.: “Economics-Finance”, 2018.
5. Urazov K. B. Accounting and audit. Tashkent - 2004.
6. Urazov K.B. Features of accounting in other industries. Textbook. Revised and updated 2nd
edition. - T.: "Science and technology", 2019. - 540 p.
