Page 4 Advertisements Column 1

Gisborne Times, Volume XXVI, Issue 2347, 13 November 1908, Page 4

'\Y.bat is a reserve fund? asks the “Sydney Morning Herald, 5 ’ and answers :—This is a question of perennial interest. Accountants will tell us that there is onf.y one kind of reserve fund, that invested in liquid securities quite outside of the business concerned. But in practice there are many companies that- have their socalled “reserve 55 invested in the business itself, and they regard this as a perfectly sound and highly profitable proceeding. As in other things, legitimate differences are quite possible ■under different circumstances. While no one would feel satisfied if a hanking institution lent out the whole of its reserve to borrowers, the fact of some classes of trading concerns having part or even the whole of their reserve fund invested in stock or in premises cannot he regarded as equal Iy objectionable. That these latter may not he regarded as reserves in the" true sense of the term may he adanitted. A true reserve should be such as is 'available for future business needs or contingencies.' 'lf it takes the form of outside investments it may he called ia reserve fund; if in the form, say, of duplicate plant for fear of accident it would he ..a reserve. Loss on trading does notyipso facto, affect a true, reserve, though it would, of course, reduce the surplus of assets over capital and liabilities. A true ieserve is reduced by a loss in the value of the reserve itself or abandoned by the conversion of tho reserve from being a fund or other asset in a state of preparedness into a state of •present use in the business. Zyinole Trokeys clear the throat and revive the voice—important facts for all who talk or sing. Their widespread popularity shows their yalue.