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Simple English definitions for legal terms
suspense reserve
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A quick definition of suspense reserve:
A suspense reserve is money that a company sets aside for a specific purpose and cannot use for other things like paying dividends. It is also called appropriated retained earnings, appropriated surplus, or surplus revenue. This money is not available for immediate use and is kept in reserve for future needs.
A more thorough explanation:
A suspense reserve is a portion of a company's retained earnings that is set aside for a specific purpose and cannot be used for other purposes, such as paying dividends. It is also known as appropriated surplus or surplus revenue.
For example, a company may set aside a suspense reserve to cover potential legal expenses or to fund a future expansion project. This reserve is not available for distribution to shareholders as dividends.
Another related term is lost earnings, which refers to income that a person could have earned if they had not lost their job or suffered a disabling injury. Lost earnings are often awarded as damages in legal cases.
Overall, a suspense reserve is a way for a company to plan for future expenses or investments while still maintaining a stable financial position.