Reserve account


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Reserve account

A separate amount of cash or letter of credit to service a payment requirement such as debt service or maintenance.

Allowance for Doubtful Accounts

Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash flow problems should its credit sales not be repaid as expected. On financial statements, it is important to note that an allowance for bad debts exists for fiscal conservatism and not because one expects a large amount of bad debt to accumulate. An allowance for doubtful accounts is also called a cushion. Banks call these funds the loan loss reserve. See also: Savings account.
References in periodicals archive ?
If the estimate is too conservative, the reserve account can quickly exceed what is actually needed to make the payments.
Thus, for the purpose of recognizing premium stabilization reserves as a plan liability, it is irrelevant whether it is probable (high likelihood of occurrence) that a participating employer will request a reduction in premiums, a premium holiday, or the transfer of the positive balance in the premium stabilization reserve account to a successor trust.
The acting FHA commissioner noted that while the FHA's Capital Reserve Account will have a positive balance in 2013, according to the budget projections, the FHA plans to take further steps to ensure that the fund does rebound.
However, this requirement was scrapped in 2011 after sukukholders' approval because the reserve account had sufficient funds to cover sukuk principal repayments and profit payments until the redemption of the issued sukuk in March 2013.
Table 2 presents number of firms and total reserve account changes by year and by classifications of firms.
This worked very quickly at home and after a few stumbles with starting at the business, we are now settled into a nice routine of building the cash reserve account. A tip we employed: set up the money market in a separate bank.
The Tax Court in Findley, 25 TC 311 (1955), stated that, in the case of a debt that has become partly worthless, the charge-off is an act "to perpetuate evidence of taxpayer's election to abandon part of the debt as an asset." While merely increasing a general reserve account without specifically identifying the debt(s) to which the reserve increase relates does not provide evidence sufficient to comply with the statute (see, e.g., International Proprietaries, Inc., 18 TC 133 (1952)), increasing a reserve account for specifically identified debt(s) that are partly worthless can constitute a charge-off for purposes of Sec.
A mortgage reserve account is also available so that you can draw down up to pounds 50000 at a later date without any further underwriting.
"It is really important for limited partners and lenders to keep a watchful eye on the reserve account," said Tate, whose company manages 60 tax credit properties with 2,000 units in Texas and Colorado.
The reserve account is a book account that tracks UI contributions an employer pays as well as the benefit charges that are paid out to employees who have been laid off.
Effective July 20, 2006, the PSR policy requires Reserve Banks (1) to release interest and redemption payments on securities issued by government-sponsored enterprises (GSEs) and certain international organizations (institutions for which the Reserve Banks act as fiscal agents but whose securities are not obligations of, or fully guaranteed as to principal and interest by, the United States) only if the issuer's Federal Reserve account contains sufficient funds to cover them and (2) to align the treatment of the general corporate account activity of GSEs and certain international organizations with the treatment of the activity of other account holders that do not have regular access to the discount window and those account holders not eligible for intraday credit.
The funds are available under the Trade Adjustment Assistance (TAA) program from a reserve account established this year as part of a new way of allocating training funds to the states.