Glossary
With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.
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Reserve For Replacement
« Back to Glossary IndexCategory: Accounting and Finance
A financial provision created by a company to cover the anticipated future costs of replacing or maintaining long-term assets. This reserve is established to ensure that, over time, funds are available to address the wear and tear or obsolescence of capital assets. Companies allocate a portion of their earnings to this reserve, anticipating the need for replacements or major repairs. By proactively planning for asset maintenance or replacement, organizations aim to mitigate financial strain and ensure the ongoing functionality of critical assets in their operations.
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