MR HANDYSIDE v. FROZEN MEAT COMPANY.

Southland Times, Issue 17654, 11 February 1916, Page 2

MR HANDYSIDE v. FROZEN MEAT COMPANY.

To the Editor. Sir, —As Mr Handyside challenges my statement with reference to the Bank of Australasia, I only wish to say 1 got the information from tlie Bank’s own advertisement in the Insurance and Banking Record, in which the following line appears, vis. : —“Reserve Fund (£500,000 invested in Consols, the remainder being used in the business) £2,750,000.’’ I assume that the Bank knows its own business even better than Mr Handyside. Mr Handyside’s catalogue of the Bank's liquid assets does not affect the argument: liquid assets and Reserve Fund are not synonymous terms. All Banks keep a large proportion of their assets in liquid form, and tlie Bank of Australasia is a model in this respect: hut it would he quite possible for a company to have all its assets liquid and yet to have no Reserve Fund. Mr Handyside’s suggestion that tlie Frozen Meat Co. should alter tlie title of its various reserve accounts to “Ad-ditions-and Extensions in land, buildings, plant, machinery, etc., for further development of the Company’s business” is unacceptable for two reasons: —(a) It would be a waste of printer’s ink and paper; (b) It would be inaccurate and misleading, because all land, buildings, plant, machinery and property of every description belonging to the Company already appear on the Assets’ side of the balance-sheet, and these Reserve accounts must appear on tlie liability side as the contra of the assets, in which they are invested. Any qualified accountant could explain this to Mr Handyside.—l am, etc., J. E. AVATSON. Feb. 10.