Crazyface
Tour Winner
What exactly is / are "Revenue Reserves"?
Account Question
- Thread starter Crazyface
- Start date
D
Deleted member 1147
Guest
Accumulated profits which have not yet been distributed to shareholders via dividends etc
SocketRocket
Ryder Cup Winner
Often to cover projected extraordinary expenditure.
Crazyface
Tour Winner
So it's money readily available in the bank?
Reason for question is that my club seems to have a lot (in my opinion) of this. £600K. Is this a lot?
Reason for question is that my club seems to have a lot (in my opinion) of this. £600K. Is this a lot?
upsidedown
Tour Winner
Wish we had 600K 
fundy
Ryder Cup Winner
could be a lot, could be sensible, could be short of what they need depending on future plans and budgets, needs to be taken in context of the rest of the finances, size of club etc
fundy
Ryder Cup Winner
Wish we had 600K
expect most would
Doh
Journeyman Pro
That's a very fortunate state of affairs the trick is not to waste it but spend it wisely, or not spend it at all until all other avenues have been explored.
ManinBlack
Tour Winner
It's not money in the bank. The reserves could be financing fixed assets. The balance sheet will tell you how much is in the bank.
D
Deleted member 1147
Guest
Important to remember that cash and profit are 2 entirely different things.
Crazyface
Tour Winner
Sorry, but what do you mean?
D
Deleted member 21258
Guest
Normally most golf clubs reserves are tied up in a course/clubhouse/equipment, rather than in 'cash'.
If you think about a fairly simple case, say I had 600k in cash/bank(which also represents the profits previously made/reserves I previously made) and did not own a golf course, then I go buy a new clubhouse/course.
I would still have 600k in reserves(ie. profits previously made would still be the same) but I now have zero in the bank but swapped it for an asset(clubhouse/course, but you could swap for machinery etc) at cost of £600k. Hence the saying asset rich, cash poor, which is normally fairly applicable to businesses(in recent times) that own property or their business is property.
Hopefully that makes sense CF, so your club may be rich in assets but have little cash/money. However it could also mean that they have money in the bank, especially after the recent VAT refunds, but on the other hand it may mean they don't. You need to look at the accounts and look at the cash in bank/hand figure to know if they have money in the bank.
Hope that helps.
