(redirected from reserve for)
Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia.
Related to reserve for: reserve bank


An accounting entry that properly reflects contingent liabilities.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.


Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The funds that are earmarked by a firm from its retained earnings for future use, such as for the payment of likely-to-be-incurred bad debts. The existence of such a reserve informs readers of the firm's financial statements that at least a part of the retained earnings will not be available to the stockholders. See also allowance for doubtful accounts, reserve for contingencies.
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.
References in periodicals archive ?
Paramena Awerial, reserve isaac Kon Anok List of provisional candidates and reserve for Legislative Assembly seats part list and women list (GONU women list): Rebecca Aluel Mayor Susan Salomon Reserve:
For example, had General Signal not "purchased" a tax planning technique and instead interpreted section 419A(c)(2) on its own, made disclosures to its employees, and volunteered financial information not otherwise required for financial accounting purposes, the Tax Court might have conceivably concluded that General Signal did indeed establish a reserve for retiree benefits in its VEBA.
As is the case with banks, state-licensed offices are also subject to some federal supervision, by the Federal Deposit Insurance Corporation (FDIC), if the branches have insured deposits, or the Federal Reserve for uninsured state-licensed offices.

Full browser ?