A reserve is a planned amount, a surplus is unplanned.
reserves and surplus are shown into liability side of the financial statiment, since reserve is the money set aside from the capital for future use hence defining surplus as a debit in the business thus attributing to its liabiltiness,
Surplus Reinsurance
The excess cash formula calculates surplus funds by subtracting the minimum cash balance required from the total cash balance.
When the Government could not meet the cost of infrastructure projects and also when there is a huge deficit budget borrowing could not be avoided. But the Government has to calculate the foreign exchange reserves it has and the GDP vs External Debts ratio.
What is reserve & surplus in accounts
entries for Reserve & surplus
A reserve is a planned amount, a surplus is unplanned.
reserves and surplus are shown into liability side of the financial statiment, since reserve is the money set aside from the capital for future use hence defining surplus as a debit in the business thus attributing to its liabiltiness,
Amount appropriated out of earned surplus (retained earnings) for future planned or unforeseen expenditure.
To calculate the total surplus from a graph, you can find the area of the triangle formed by the supply and demand curves. This triangle represents the consumer surplus and producer surplus combined. The total surplus is the sum of these two surpluses.
reserves surplus
The net loss reserves to surplus ratio is a financial metric used in the insurance industry to assess the adequacy of an insurer's reserves relative to its surplus. It is calculated by dividing the net loss reserves (the funds set aside to pay future claims) by the surplus (the difference between assets and liabilities). A lower ratio indicates a stronger financial position, suggesting that the insurer has sufficient surplus to cover potential claims, while a higher ratio may signal potential financial strain. Monitoring this ratio helps regulators and stakeholders gauge the insurer's risk management and financial health.
To determine the economic surplus in a market, calculate the difference between the total value that consumers place on a good or service and the total cost of producing it. This surplus represents the benefit gained by both consumers and producers in the market.
Producer surplus is calculated by subtracting the minimum price a producer is willing to accept for a good or service from the actual price they receive. Factors that determine producer surplus include the cost of production, market demand, and the level of competition in the market.
To calculate surplus on a graph, find the equilibrium point where supply and demand intersect. The surplus is the area above the equilibrium price and below the demand curve. Subtract the equilibrium price from the highest price on the demand curve to find the surplus.
To calculate consumer surplus in a market, subtract the price that consumers are willing to pay for a good or service from the actual price they pay. This difference represents the benefit or surplus that consumers receive from the transaction.