Glossary

Free Reserves

Free reserves are a company's accumulated genuine profits or cash share premium that it can legally capitalize into a bonus issue, unlike reserves from revaluing assets.

What It Means

Free reserves are a company's accumulated profits, or share premium collected in cash, that it's legally allowed to convert into share capital for a bonus issue. Reserves created by revaluing fixed assets like land or buildings don't qualify, since that markup isn't real, distributable profit.

Free Reserves Meaning in Finance | TraderStack