hidden reserve


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Hidden Asset

Value that a person or company possesses that does not appear on its balance sheet. One may have a hidden asset due to an accounting convention. For example, a company may be required to depreciate an asset faster than its actual value declines. This results in a higher net worth for the company than would be reflected in its books. A hidden asset is also called a hidden reserve or a hidden value.

Secret Reserve

The amount by which shareholder equity in a company exceeds the amount claimed on its financial statements. Secret reserves arise when a company overstates its liabilities or understates its assets, usually because its accounting practices depart from GAAP. In such cases, the company must declare that its accounting is different from that of most other companies. The secret reserve may eventually be converted to cash and distributed to shareholders. It is also called the hidden reserve.

hidden reserve

The amount by which a firm's net worth is understated. For example, overdepreciation results in assets and net worth being carried on the firm's financial statements at less than market value.

hidden reserve

the undervaluation of the ASSETS, or overvaluation of the LIABILITIES, of a firm in its BALANCE SHEET. For example, the value of a firm's land and buildings may be shown in the balance sheet at HISTORIC COST or original cost, whereas the current market price of those assets may be considerably higher. Thus, if the assets were to be revalued to reflect current market values the difference would be formally recorded in the balance sheet as an addition to capital RESERVES. See INFLATION ACCOUNTING.

hidden reserve

the undervaluation of the ASSETS or overvaluation of the LIABILITIES of a firm in its BALANCE SHEET. For example, the value of a firm's land and buildings may be shown in the balance sheet at HISTORIC COST or original cost, whereas the current market price of those assets may be considerably higher. Thus, if the assets were to be revalued to reflect current market values, the difference would be formally recorded in the balance sheet as an addition to capital RESERVES. See INFLATION ACCOUNTING.
References in periodicals archive ?
According to a 1985 United Nations report, International Accounting and Reporting Issues: 1985 Review, hidden reserves likely are created in other ways in some countries.
6 Number that specify shipping 268 81 9 % of auctions 58 73 35 Hidden Reserve Open Open <$100 >$100 Number of auctions 280 43 Reserve not met 8 1 Month (Jan = 1) 4.
After Hidden Reserve had made a successful debut in the mares' winners' bumper, Meade said: "That's my 99th winner of the year.
This removes the hassle of bidding wars, hidden reserve prices and waiting days for an auction to end.
The Minister told the Western Mail there is no hidden reserve of money that could be made available to farmers for Tir Mynydd.
The Michael Bowe-trained Fair Ina, runner-up to Hidden Reserve on her debut in a hot mares event at Navan recently, makes plenty of appeal in the finale.
Juvenile Fillies: Barbed Wire, Cheyenne City, City Band, Critical Factor, Dunbar Hill, Hidden Reserve, Larkwhistle, Love That Jazz, Minister's Melody, Runaway Mary, Sharp Cat, Storm Song.
Let's give these banks two or three years to build up their capital again and eliminate hidden reserves in the determination of capital.
But a freshman college entomology course tapped hidden reserves of insect appreciation in the young student.
Best giving full credit for hidden reserves in the company's property portfolio, Milli Re's risk-adjusted capital on an unconsolidated basis is considered to be adequate.
New auction listings are added constantly, and bidding is easy with free bidding registration, no buyer fees, and no hidden reserves.
When a Katrina-like storm threatens to wash them all out to sea, she must find hidden reserves of strength to steer her pop to safety in a boat made from the back of a pick-up truck.