reserve for contingencies

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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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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"That shortfall is exactly what the government seeks to meet by snatching away from the money from the central bank's contingency reserve."
A red alert notice is raised when there is severe power deficiency and zero contingency reserve, while a yellow alert means thin power reserves.
A contingency reserve is the power plant that will be ready to plug any capacity loss in the system - and often, this is equivalent to the biggest unit in a power grid; like the 647-megawatt Sual power plant for Luzon.
A red alert notice means that the projected demand exceeds available power generating capacity and there is zero contingency reserve. This prompted the National Grid Corp.
On Tuesday, demand went up to 10,267 MW, which pushed contingency reserve to fall below the prescribed level of 647 MW, the capacity of the largest unit in the Luzon grid.
The properties have been financed from the company's existing debt facilities as all equity capital raised to date has, save for a contingency reserve, been invested in income generating properties.
The company when reported Q2 increased its cost estimate for Vogtle by $700M, established a contingency reserve of $400M, recorded a pre-tax charge of $1.1B and announced the need for $800M of additional equity, Beaumont tells investors in a research note.
Moreover, BRICS had also created the contingency reserve arrangement which was aimed at ensuring liquidity for member states when they were confronted by short term balance of payment.
After promulgation of these Rules insurers shall be required to procure specified forms of collaterals and also maintain special reserve (called the contingency reserve) well in advance so that they do not find it cumbersome to honour the guarantees as and when any of these guarantees are called.
The 2016 budget for the first time includes an unallocated contingency reserve worth 22 per cent of budgeted spending to cover unforeseen expenditure.
He said the Contingency Reserve Arrangement (CRA) of the BRICS will come into force soon which will help in bringing about stability in the BRICs economies.

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