Valuation reserve

A valuation reserve is an allowance that is paired with and offsets an asset. The reserve is designed to absorb any declines in the value of the associated asset. A reserve is created by making a charge to earnings in the amount of any expected losses, thereby accelerating expense recognition into the current reporting period. Examples of valuation reserves are the allowance for doubtful accounts and the allowance for obsolete inventory.

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Accountants' Guidebook 
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Bookkeeping Guidebook