"Cookie jar reserves" refers to the practice of overreserving estimated obligations during good times and underestimating,or reversing previous charges,in bad times.

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Cookie jar reserves are created by companies to smooth out their earnings over time. During good times, they may overreserve estimated obligations to create a "cookie jar" of excess reserves. Then, during bad times, they can use these reserves to offset losses or reverse previous charges. This practice can be seen as a form of earnings management, as it can make a company's earnings appear more stable than they actually are.

"Cookie Jar Reserves" Refers to the Practice of Overreserving Estimated