Funds set aside from company profits not distributed to shareholders in the form of dividends. This form of retained profits is different from provisions, which are set aside to cover known but unquantifiable liabilities. Reserves and issued capital together are known as shareholders' funds, being the company's capital base. Countries also hold reserves, which are usually held by central banks and are generally made up of gold and foreign exchange. See also: provisions, reserve currency, statutory reserve deposit.
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