Valuation reserve

An allowance to provide for changes in the value of a company's assets, such as depreciation.

Valuation Reserve

A charge against a company's earnings set aside to account for changes in the value of a company's assets. These changes are normally due to depreciation, but also may come from bad debt.

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To arrive at the company's actual surplus, the formula would adjust statutory statement surplus by adding in any voluntary reserves for default losses on real estate and mortgages, the Asset Valuation Reserve and 50 percent of the annual statement dividend liability.

Building new boundaries for life companies

Consequently, if the Commission moves forward to adopt the proposed rules for loss accrual and valuation reserves generally, we recommend that it eliminate the references to tax contingency and valuation reserves that are already governed by FASB Statements No.

Comments on loss and valuation accrual accounts and supplementary financial information

A valuation reserve against net deferred tax assets which was released in the fourth quarter of 2012 minimized book income tax expense through June 30, 2012.