Valuation Reserve Law and Legal Definition

Valuation Reserve is an amount set aside against an unforeseen event that the valuation of assets or investments might be higher than what can be actually realized or that a liability may turn out to be greater than the valuation placed on it. Value reserves are created to help a business make use of the company’s assets if the value of the holdings of a corporation changes. It is an allowance, created by a charge against earnings, to provide for changes in the value of a company's assets. Accumulated depreciation and allowance for bad debts can be taken as examples for valuation reserve.