Answer Posted / mr. jatin trivedi

Capital reserve is one type of special fund which is created
after the board meeting with special consideration that the
share holders will not demand for the same and it is also
not withdrawn at the time of liquidition. It is created at
the time of revaluation of assets and only part of Capital
gains not the revenue gain.

While the rreserved capital is accumulated surplus by the
firm and can be utilized when needed. This has one advantage
that it can be withdrawn at the time of liquidation and can
be converted into cash.

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