The textbooks on business accounting say that an appropriate amount (roughly equivalent to the annual depreciation of plant) ought be set aside from the retained profit each year to a reserve/sinking fund for eventual replacement of the assets concerned.
Deposit rates these days being so low, is it allowed that companies put the asset replacement funds into an investment account instead ?
If so, are there any state-imposed constraints on the degree of risk that ought be accepted for such funds, seeing as, on a national scale, the capability of industrial/commercial sector to replace its assets is key to their surviving trading shocks with minimal loss of employment ?
The task of investing such reserves - is this an area for general financial advisers ?
Or is it a specialist service obtainable only from certain types of financial intermediary ?
Deposit rates these days being so low, is it allowed that companies put the asset replacement funds into an investment account instead ?
If so, are there any state-imposed constraints on the degree of risk that ought be accepted for such funds, seeing as, on a national scale, the capability of industrial/commercial sector to replace its assets is key to their surviving trading shocks with minimal loss of employment ?
The task of investing such reserves - is this an area for general financial advisers ?
Or is it a specialist service obtainable only from certain types of financial intermediary ?