reserve for contingencies

Reserve for Contingencies

A company's retained earnings that are not reinvested but set aside to protect against future losses. A company may set up a reserve for contingencies when it is performing well to guard against the risk that it may eventually perform poorly. A reserve for contingencies allows a company to maintain its operations smoothly even when it has suffered an operating loss.

reserve for contingencies

A part of retained earnings that are set aside for potential future losses. For example, a firm may establish a reserve account to cover the possibility of losing a lawsuit to which it is a party.
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References in periodicals archive ?
The Army also has to worry about replenishing stocks of pre-positioned equipment that is held in reserve for contingencies.
Net proceeds, after payment of transaction related costs and a reserve for contingencies, will be used for the purchase and cancellation of all Class B Shares of PanOcean at a price of CDN$58.
Spending is projected to show a 1% positive variance, which is equal to the reserve for contingencies.
5 million hurricane emergency reserve for contingencies and a sizable insurance reserve fund.
4 million reserve for contingencies, the balance rises to $72.
The general fund reserve for contingencies and other available moneys represent 8.
District officials report that they expect to close fiscal 2007 with balanced operations and to maintain at least the current level of general fund reserves, including the board reserve for contingencies.
By the end of 2002, HSBC had injected USD$800 million into Bital (renamed HSBC Mexico) to fully reserve for contingencies.
The district expects to close fiscal 2006 with balanced operations and to maintain at least the current level of general fund reserves, including the board reserve for contingencies.
This range represents our best present estimate of the total amount of cash that will be available for distribution to stockholders following liquidation of all remaining assets, satisfaction of liabilities, final closeout and dissolution expenses and an adequate reserve for contingencies.
After consideration of an adequate reserve for contingencies, the balance of these funds are available for a merger or acquisition transaction.