According to the results of 2014, net accounting profit must be written off from account 99 “Profit and Loss” to account 84 “ retained earnings(uncovered loss)". But what can it be used for? This can only be decided by the owners of the enterprise. The decision on the distribution of profits is made at the general meeting of shareholders or members of the company. Most often it is spent on the payment of dividends, annual bonuses, large capital investments.

In this article, we will figure out how to reflect all these payments in accounting and at. This is especially important when preparing annual reports, since the balance of account 84 almost always differs from the profit that you reflect in sheet 02 of the income tax return. After all, the procedure for accounting for expenses is different. In addition, unallocated money can accumulate on account 84 accounting profit previous years.

What are the dangers of errors in accounting for expenses from retained earnings

If the transactions on the accounts are incorrectly reflected, then the inspectors can fine the company 10,000 or 30,000 rubles. (Article 120 of the Tax Code of the Russian Federation). The fact is that any errors in the accounts can be regarded by inspectors as gross errors in accounting for income and expenses. But that is not all.

For example, writing off dividends or bonuses from a special fund as part of tax expenses will lead to overestimation of profits and arrears. Moreover, if you reflect bonuses or capital investments from special funds bypassing expense accounts, then retained earnings on account 84 will be overestimated. current year and the amount of dividends. In this case, claims from

Dividends

Dividends in joint-stock companies and income from participation in LLCs are always paid out of the company's retained earnings (clause 2, article 42 of the Federal Law of December 26, 1995 No. 208-FZ "On Joint Stock Companies", clause 1 of article 28 of the Federal Law of February 8, 1998 No. 14-FZ "On Limited Liability Companies"). That is, dividends reduce the balance of retained earnings on account 84.

What is often wrong. They reflect annual or interim dividends on account 99, not 84. And in tax accounting, they include dividends in expenses.

How to reflect in accounting. Accrual and payment of dividends are events that occurred after the reporting date. This means that they must be taken into account according to special rules. When accruing and paying dividends for 2013, postings must be made in 2014. That is, when the accrual and issuance of money actually occur (clause 10 PBU 7/98).

Accrued dividends reflect on the debit of account 84 and account 75 sub-account "Calculations for the payment of income." Such posting is expressly provided for in the Instructions to the Chart of Accounts for accounting.

Example 1 In March 2014, the owners of Vega LLC held a general meeting following the results of the previous year. I. M. and Petrov A. I. (the owners of the company) decided to allocate a part of retained earnings on account 84 to the payment of income from participation. The total amount of net profit for distribution amounted to 580,000 rubles. Ivanov and Petrov prescribed in the decision of the general meeting of participants dated March 5, 2014 to calculate the income from participation in proportion to the shares of the founders. Ivanov's share is 70 percent, while Petrov's is 30 percent.

The accountant of Vega LLC calculated the amount of income for each participant. Ivanov's income amounted to 406,000 rubles. (580,000 rubles × 70%). And Petrov's income is 174,000 rubles. (580,000 rubles × 30%).

The accountant made entries on the accrual and payment of income based on the accounting statement. A sample reference can be found below.

And here are the wiring:

DEBIT84 CREDIT
- 406,000 rubles. - Ivanov's income was accrued;

DEBIT 84 CREDIT75 sub-account "Calculations for the payment of income"
— 174,000 rubles. - Petrov's income was accrued.

DEBIT75 sub-account "Calculations for the payment of income"CREDIT
— 36,540 rubles. (406,000 rubles × 9%) - personal income tax withheld from Ivanov's income;

DEBIT75 sub-account "Calculations for the payment of income"CREDIT68 subaccount "Calculations for personal income tax"
— 15 660 rubles. (174,000 rubles × 9%) - personal income tax was withheld from Petrov's income;

DEBIT75 sub-account "Calculations for the payment of income"CREDIT 51
— 369,460 rubles. (406,000 - 36,540) — dividends were paid to Ivanov;

DEBIT 75 sub-account "Calculations for the payment of income"CREDIT 51
— 158 340 rubles. (174,000 - 15,660) - dividends were paid to Petrov.

By the way, interim dividends (distribution of LLC profits) must be reflected in the same postings. Moreover, interim dividends accrued for the 1st quarter, half a year or 9 months will affect retained earnings in 2015.

How to reflect in tax accounting. Dividends are not included in expenses when calculating income tax. This is directly stated in Article 270 of the Tax Code of the Russian Federation.

Employee bonuses

Bonuses can be directly related to the performance of employees or be fixed from year to year. In any case, in accounting, bonuses must be reflected in expense accounts - 20, 25, 26 or 91. Confusion arises if the company's charter says that bonuses are paid from a special bonus fund, which is created from retained earnings.

What is often wrong. Reflect the payment of annual bonuses bypassing expense accounts. Premiums, bonuses, which are issued at the expense of special funds, are written off as expenses when calculating income tax.

How to reflect in accounting. Since any bonuses to employees are expenses of the company, they must be reflected in expense accounts. This conclusion follows from PBU 10/99. This also applies to the case when bonuses are paid out of a special bonus fund formed from retained earnings.

The same opinion is shared by officials in a letter dated October 20, 2011 No. 07-02-06 / 204. In this clarification, the department's specialists considered the situation when the company spent money on sports and entertainment events. The company spent them at the expense of retained earnings. As rightly noted in the financial department, since expenses are not directly related to production activities, they should be included in other expenses on the basis of PBU 10/99.

If the company pays bonuses from a special fund, then it is worth creating separate sub-accounts for account 84 - “Created bonus fund” and “Used bonus fund”. Information from these sub-accounts will give the owners an idea of ​​what the company uses the profit for. The balances on such sub-accounts will form a separate line of the balance sheet with indicators of the bonus fund.

Example 2 At the general meeting of participants of Raduga LLC, following the results of 2013, the owners decided to create a bonus fund in the amount of 800,000 rubles from retained earnings. Later, based on the results of work for the first quarter, the participants ordered to pay a bonus to the general LLC in the amount of 300,000 rubles at the expense of the fund. All these operations were accounted for by the accountant as follows:

DEBIT 84 sub-account "Retained earnings of previous years" CREDIT 84 sub-account "Created bonus fund"
— 800,000 rubles. — a bonus fund was created at the expense of retained earnings;

DEBIT26 CREDIT 70
- 300,000 rubles. — a bonus was awarded to the director based on the results of work for the 1st quarter;

DEBIT70 CREDIT 68 sub-account "Calculations for personal income tax"
— 39,000 rubles. (300,000 rubles × 13%) - personal income tax withheld from the bonus to the director;

DEBIT 70 CREDIT 51
- 261,000 rubles. (300,000 - 39,000) - a bonus was transferred to the director;

DEBIT84 sub-account "Created bonus fund"CREDIT84 sub-account "Used bonus fund"
- 300,000 rubles. - spent part of the funds of the fund.

If a company pays premiums from a special fund, then such amounts cannot be taken into account when calculating income tax. This follows from paragraph 22 of Article 270 of the Tax Code of the Russian Federation. But in other cases, bonuses can be written off as tax expenses by including provisions on them in labor or collective agreements (Article 255 of the Tax Code of the Russian Federation).

Capital investment in the purchase of fixed assets

Since capital investments (purchase of fixed assets) are associated with large expenses, the owners often dispose of paying for them at the expense of a special fund created from retained earnings. For example, at the expense of the industrial development fund.

It is important that the purchase of fixed assets must be reflected in the usual way - through accounting accounts 08 (07) and 01. It does not matter from what sources the company paid for capital investments (from a special fund or not).

If the company pays for capital investments (purchase of property) from special funds, then also make an internal entry in account 84 to show the use of funds.

What is often wrong. They reflect the purchase of fixed assets at the expense of retained earnings, bypassing accounts 08 (07) and 01. Such assets are not depreciated either in accounting or in tax accounting.

How to reflect in accounting. Purchased fixed assets account for general rules PBU 6/01. That is, collect the initial cost on account 08. And after commissioning, make a posting on the debit of account 01 and the credit of account 08.

In addition, it is worth creating separate sub-accounts, where the company will reflect operations at the expense of a special fund (similar to the cost of bonuses).

Example 3 At the general meeting of participants of Meteor LLC following the results of 2013, the owners decided to create a special production development fund at the expense of retained earnings. At the expense of it, the participants plan to buy new production equipment. The size of the created fund is 1 million rubles.

At the expense of the fund, in June 2014, LLC acquired a machine tool worth 590,000 rubles, including VAT - 90,000 rubles. In the same month, the company put the machine into operation. The accountant made the following entries in the accounting records:

DEBIT84 sub-account "Retained earnings of past years"CREDIT84 sub-account "Created production development fund"

— 1,000,000 rubles. — a production development fund was created at the expense of net profit;

DEBIT 08 CREDIT 60

— 500,000 rubles. (590,000 - 90,000) - reflects the cost of a new machine;

DEBIT 19 CREDIT 60

— 90,000 rubles. - input VAT is reflected;

Debit 60CREDIT 51

— 590,000 rubles. - the machine is paid to the supplier;

DEBIT 84 sub-account "Created production development fund" Credit 84 sub-account "Used production development fund"

— 590,000 rubles. - reflects the use of a special fund;

DEBIT 01 CREDIT 08

— 500,000 rubles. - put the property into operation;

DEBIT68 sub-account "VAT settlements" CREDIT 19

— 90,000 rubles. — accepted for VAT deduction.

How to reflect in tax accounting. It does not matter with what funds the company pays the costs of capital investments. In any case, it is necessary to decide whether the property is depreciable or not. So, fixed assets worth no more than 40,000 rubles. can be written off at a time as material expenses (Article 254 of the Tax Code of the Russian Federation). And more expensive property must be depreciated.

One of characteristic features market economy is the competition of most enterprises among themselves.

When summing up the results of the work, the most important financial indicator is profit. Its positive dynamics, along with other economic indicators, testifies to the efficiency of the business entity.

Further development is influenced by the choice of ways to distribute profits, which remain in the hands of the owners of the enterprise.

Management decisions in this matter will determine the strategy and goals for at least the next year. Annual bonuses to employees, dividends, the size of the reserve fund - all this will depend on how the profit is distributed after payment of all mandatory payments.

Undistributed (another name is accumulated) profit is the part of the profit remaining at the disposal of the enterprise after the payment of taxes, dividends, fines and other obligatory payments.

This concept closely intersects with. If the company has no deferred tax liabilities and no accrual of dividends was carried out during the year, then these figures in the annual statements are the same. However, retained earnings represent the resulting figure for the reporting year and for the entire period of existence of the company, and net income - only for the reporting period.

This term in accounting and economic understanding is interpreted in different ways. For an accountant, this is the final result of the work reflected in the statements on account 84. But it has not actually been distributed yet, since the decision on where to send retained earnings is made by the owners (shareholders) in the period from March 1 to June 30 of the next year. Therefore, in the economic sense, they consider the profit for the past year after this date, that is, when the accountant makes all the deductions according to the decision of the owners of the enterprise.

How it is formed and what is included in it

A positive or negative result from the sale of products, the provision of services is reflected in the active-passive account 90 "Sales". The debit of the account shows the full, and other costs. Loan reflects revenue. The final balance is transferred to account 99 “Profit and Loss”.

Postings are carried out:

• Dt90Kt99 - profit received;
• Dt99Kt90 - a loss has been received.

Operations of the enterprise, which are classified as operating and non-operating, are shown on account 91 “Other income and expenses”.

These include:

1. Sale and lease of assets belonging to the enterprise;
2. Markdown and revaluation of non-current assets;
3. Operations with foreign currency;
4. Investments in business shares of other companies;
5. Liquidation and donation of property;
6. Income and expenses from operations with securities.

postings are as follows:

• Dt91Kt99 - profit received;
• Dt99Kt91 - a loss has been received.

This procedure for writing off the totals for accounts 90 and 91 is called balance sheet reformation. Many economists understand this term as the direct distribution of accumulated profit from account 84.

Similarly, the balance is transferred to account 99 from accounts 76 “Extraordinary income and expenses” (for example, insurance compensation or losses from natural disasters) and 10 “Materials” (the cost of accepted inventory items that are unsuitable for production).

Retained earnings increase when errors are found in accounting reports that led to an overestimation of expenses. And also in case of unclaimed dividends by shareholders, if more than three years have passed since their accrual. Accordingly, errors that created overestimation of income will reduce the accumulated profit.

They are not always cash in the form of cash or on a current account (depreciation of fixed assets increases profits, but does not add money). This must be taken into account when conducting an economic analysis.

In the last days of the reporting year, the chief accountant conducts writing off the closing balance(profit or loss) from account 99 to account 84 "Retained earnings".

Wiring is done:

• Dt99Kt84 - when making a profit;
• Dt84Kt99 - upon receipt of a loss.

After that, account 99 is reset to zero and no operations are carried out on it until the beginning of the next year. Account 84 is active-passive. Before entering the total amount of accumulated profit in the reporting, the amount of income tax is deducted from it (subsequently it can be adjusted).

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Retained earnings and uncovered loss: common and differences

These terms are absolute indicators of the efficiency of the enterprise. There are no significant differences in accounting, except for the difference in debit and credit entries. As a rule (although not always), the loss is covered by the balance of profits of previous years, the reserve fund, authorized or additional capital. Profit in the reporting year, according to the decision of the owners, is distributed in a number of areas.

Retained earnings, which is part of the balance sheet liabilities, actually increases the equity capital of an economic entity. This states the effectiveness of the assets invested in production. A detailed analysis will show, due to which factors it was possible to achieve profit.

In the balance sheet (form No. 1), the amount of loss is reflected with a “-” sign and is taken in parentheses. If so, the causes must be carefully analyzed. This can be either a negative result of sales and a drop in the competitiveness of products, or a temporary phenomenon with large investments in production, which slowly pay off.

Procedure and calculation formula

For JSCs (joint stock companies) these are dividends to shareholders, and for LLCs (Limited Liability Companies) - payments to founders.

This data is taken from lines 1370 and 2400 . Interim payments during the year from future profits should be reflected in the order for the enterprise.

If this year profit received , That calculation formula will be the following:

NR for the year = NR for the beginning of the year + Pchist. – Double out, where
NP at the beginning year - retained earnings at the beginning of the year,
Pchist. - net income
double - dividends paid to shareholders.

If this year received a loss , That formula will change a bit:

NP for the year = NP for the beginning of the year - Dec. – Double, where
Ub. - loss for the current year.

The value of NPch.year can be negative if the loss for the current year is greater than the accumulated profit at the beginning of the year. Then this indicator will be called uncovered loss.

For businesses different forms property, the formula may change, but the principle of calculation is the same.

Display in financial statements

Undistributed profit (or uncovered loss) is included in the capital and reserves of the enterprise and is displayed in the liabilities side of the balance sheet in line 1370. In annual accounting reports, the total amount is already shown taking into account preliminary decisions based on the results of activities. That is, minus the losses of previous years (if any), accrued dividends, deductions to the reserve fund and other items of expenditure. Until the final approval of the owners of the company, these figures may change.

Past reporting years

Possible two ways of accounting accumulated profit:

• accumulative,
• weather.

With the first method, the division of profit for the reporting year and previous years by opening separate sub-accounts to account 84 is not performed. It accumulates on an accrual basis from the beginning of the operation of the enterprise. If there is a loss, it is automatically covered by the existing profit of previous years. This is typical for small businesses.

The annual method of accounting is distinguished by the presence of separate sub-accounts for the synthetic accounting of accumulated profits in different periods.

Variants of accounts of the second order may be different, for example:

• account 84.1 - Retained earnings of the reporting year;
• account 84.3 - Retained earnings of past years.

In both cases, the amount received in past years is included in the calculation of the totals for the reporting year.

For detailed information you need data from the following sources:

• explanatory note - may be attached to the balance sheet (except for small enterprises);
• accounting entries on account 84;
• reports from previous years.

If errors are found in the calculation of profit or loss for previous years, they will be taken into account in the financial result for the reporting year.

This year

To reflect the profit for the current year in the accounting department, the company can open sub-accounts to account 84, for example:

• 84.1 - Earned profit;
• 84.2 - Retained earnings;
• 84.3 - Used profit.

Received positive result the current year will be reflected in the posting Dt84.1Kt84.2. Postings involving account 84.3 mean the use of profits for various purposes.

With any accounting options, the last posting for the reporting year in the General Ledger will be a write-off from account 99 to account 84. Interim dividends or payments (if any) have already been pre-calculated from this amount of accumulated profit.

The following transactions are made:

• Dt99Kt68 - tax calculation,
• Dt84Kt75 (or Kt70) - accrual of dividends (on account 70 - bonuses to employees).

Uncovered loss

To reflect the loss of the current year, it can be sub-account 84.4 opened - Received loss. If it is not covered by the profit of the past years, the owners of the enterprise decide to pay it off from other sources or leave it on the balance sheet. In this case, it is considered uncovered and the negative value is transferred to line 1370.

With the annual method of accounting, information on uncovered loss for the current year and past years posted to sub-accounts to account 84:

• 84.2 - Uncovered loss of the current year;
• 84.4 - Uncovered loss of previous years.

Checking procedure

Information on the movements of retained earnings (uncovered loss) throughout the year is reflected in the Statement of changes in equity (Form No. 3).

Some small businesses and non-profit organizations may not include this report in their annual reporting. It contains data for 3 years, including the reporting one.

What is negative retained earnings

This is synonymous with the “uncovered loss” result. Some economists use this term when the loss is not due to negative performance.

If errors of large amounts are found in the calculation of the cost, a loss can occur even for very profitable companies.

Spending directions

After the reformation of the balance sheet, the chief accountant distributes the accumulated profit according to the decision of the owners of the enterprise. He has no right to do this on his own.

Compared to other articles, it can be disposed of more freely, but within the framework of the company's charter and the law Typical wiring on various directions of spending profits will be as follows:

1. Dt84Kt84 - covering the loss of past years. Also, this entry in the context of individual sub-accounts of account 84 (for example, 84.2 / 84.3) can reflect an investment in production through the acquisition of non-current assets;
2. Dt84Kt82 - deductions to the reserve fund (creation or replenishment);
3. Dt84Kt75 (80) - increase in authorized capital (for an LLC on a loan, account 75, and for JSC - account 80);
4. Dt84Kt83 - increase in additional capital.

It is not allowed to distribute profits if there is a debt on investment in the authorized capital (debit on account 75) from at least one of the owners. The same rule applies if the value of the net assets of the enterprise is less (or will become less after the planned distribution of profits) of its authorized capital and reserve fund, as well as in the case of. The same restrictions apply to the payment of dividends on shares.

For an LLC, the creation of a reserve fund is not necessary, but for a JSC, its size must be specified in the charter (at least 5% of the authorized capital). Enterprises of the LLC form can create various funds for spending profits (development, bonuses for employees, social sphere, charity). To reflect them in accounting, it is possible to open any sub-accounts to the necessary accounts.

For JSCs, the law provides for the possibility of creating a fund for corporatization of the company's employees. Cash from it is spent only on the purchase of securities from shareholders. In the future, employees of the enterprise can redeem free shares.

Direction of retained earnings into production(both in assets and liabilities), in fact, is an open self-financing. It is also called reinvestment or hoarding.

A feature of investing profits in the development of production is that the acquisition of property does not reduce the liability of the balance sheet. In this case, the asset increases. In fact, the profit will be spent, but this will not reduce the amount of equity capital. The amount of funds spent will be reflected in the sub-account of account 84. When the amount of accumulated profit ends (the balance of account 84 becomes debit), then it will become clear that further investments in production are made using working capital.

Sources of loss coverage

The resulting loss shows a decrease in the amount of equity capital in the liabilities side of the balance sheet. Since the other articles of Section 3 remain unchanged, allowed to write off the loss in various ways.

Transactions by sources of loss coverage:

• Dt82Kt84 - coverage at the expense of the reserve fund;
• Dt84Kt84 - coverage at the expense of the accumulated profit of previous years (posting in the context of individual sub-accounts);
• Dt83Kt84 - repayment at the expense of additional capital;
• Dt80Kt84 - a decrease in the authorized capital (it is equated to the amount of net assets) by the amount of the loss;
• Dt75Kt84 - repayment of the loss at the expense of the owners.

All participants are interested in making a profit of the enterprise and its increase economic relations. It is the main source of net income for society, raising the standard of living of the population.

What is retained earnings is described in the following video lesson:

There is one unconditional way to distinguish a newcomer to the market from an experienced businessman. It will be enough to ask about the difference between income and profit. It is no secret that these categories are not at all equivalent, moreover, often the gross income of the organization is positive, while the net profit is completely negative. And it's not about black bookkeeping, but about the peculiarities of the distribution of funds received from the sale of products or services provided.

A company that receives some cash for the results of its activities, in fact, at the time of receipt of payment, it already has a number of primary debts. At the same time, profit and retained earnings are also different concepts that should not be confused. Retained earnings is the end result that a company has after paying all priority liabilities. The distribution of retained earnings may include both taking into account existing debts to creditors, and have a different target orientation. Retained earnings in circulation can turn into both a huge opportunity for the enterprise and cause bankruptcy, for example, if account 84 constantly displays a loss.

Before answering the question of what retained earnings are, it is necessary to take into account the obligations that arise before the company after each income is received. The first such obligation is income tax. This mandatory payment is withdrawn from the amount of gross income almost in the first place, turning the received funds into net profit.

After that, the shareholders of the company receive their share of the amount received, the so-called dividends. Dividends can turn profits into losses, especially if the company is in a deplorable state. And, finally, the remaining part of the capital will be the very profit that will be spent in several possible ways. The retained earnings of an organization very often acts as an indicator of the profitability of an enterprise, as well as its attractiveness to investors. Retained earnings, or rather its accounting, is an important factor in compiling an issue prospectus for an enterprise. As a result, this may affect such a category as dividends and the number of shareholders.

Retained earnings, the formula of which takes into account income tax, as well as the cost of paying dividends to shareholders, from the point of view of an audit, is one of the areas of work of an accountant, and under the item responsible for him. Accounting for retained earnings is one of the most important functions of an accountant. According to the current standards in accounting and audit, retained earnings are displayed in the balance sheet of the enterprise under article 84. Retained earnings account 84 in the balance sheet shows the state of the enterprise at the time of the accounting period. Retained earnings for the past few years in circulation by an accountant may not leave the balance sheet he created at all, and be the subject of a number of postings that do not have a material component. Operations of this type include an increase in the authorized or reserve capital.

In each reporting period, the accountant calculates the amount of the planned retained earnings or loss, however, determining the target orientation of the funds received is the task of the competent authority in the enterprise. This body should be the board of directors, the chief director or an equivalent position. Retained earnings from previous years can accumulate, however, they often quickly find their intended use. In the balance sheet, net income and retained earnings are displayed differently. Net profit is one of the components of form 2 of accounting at the enterprise, which contains all financial results for the accounting period. Retained earnings in their original form is extremely rare in Form 2.

Can retained earnings be negative?

Of course, retained earnings can be displayed in the balance sheet as a negative number, moreover, for domestic companies - this is not at all uncommon. At the same time, one should not think that the presence of an uncovered loss for an enterprise is a guaranteed indicator of unreliability. For example, short term accounts receivable received on the eve of the balance sheet is quite capable of reducing the retained earnings, or even make it negative. Retained earnings rarely act as a specific indicator of the effectiveness of the enterprise, and more often serves as an indicator for determining the investment potential.

Target orientation of retained earnings

The two main purposes for using retained earnings are debt repayment and income capitalization, also known as profit hoarding. The latter only means investing the funds received in the company, its fixed assets. However, most often the organization prefers to pay off creditors. Looking back at the practice of past years, we can confidently state the fact that most often it is the accounts payable account that acts as the target account in postings with 84 balance sheet items. However, retained earnings may be invested in enterprises with the consent of shareholders and major creditors who are willing to wait for payments.

At the same time, this is not at all the fault of a domestic entrepreneur, unfortunately, those organizations that have not grown to medium-sized businesses often cannot withstand competition in the domestic market. The net profit of such enterprises should be used exclusively to pay off debt, if, of course, there is income at all. After all, most often such enterprises incur a loss from their activities. Undistributed profit in circulation requires stability and reliability from the enterprise, otherwise it will have only one form - a loss.

Among other things, retained earnings can be transferred to the authorized capital account of the enterprise. Organizations that have acted in this way pursue a number of goals, in particular, this is necessary to circumvent the requirements for the size of the authorized capital of the organization. Finally, one of the targets is also considered to be the organization's reserve account, also known as reserve capital.

It should be noted that this item is most rarely the reason for spending retained earnings. Which, in principle, is quite logical from an economic point of view. After all, extracting a significant amount of money from circulation to turn it into dead weight seems inefficient. On the other hand, repaying a loan secured by real estate without proof of income seems to be much more efficient. Retained earnings for a domestic entrepreneur is primarily a source for debt repayment.

Capitalization of retained earnings: what is it for?

First of all, it should be noted that the use of retained earnings for the purpose of investing in an operating company is a long-term investment, with all the ensuing consequences. In general, this is a transfer of funds received from article 84 to the account of fixed assets. Over the past few years, domestic entrepreneurs have gradually come to the conclusion that accounting for retained earnings shows more numbers for the organization that actively invests in its own production facilities. Thus, recently, capitalization has gradually become more relevant and popular, especially for an organization that intends to enter foreign markets.

In addition to improving the efficiency of the production cycle, the capitalization of retained earnings is also necessary to attract investors and their funds. At the same time, it is necessary to take into account the characteristics of each investor individually. For example, some investors prefer short-term returns on their investments and expect only stable income in the future, with no interest in the future of the company.

On the other hand, there is another category of investors who, in a couple of years, are so introduced into the activities of the enterprise that they become full shareholders. This category counts on the continuous development of the enterprise, its modernization and technological renewal. At the same time, retained earnings are an accountable indicator, and are part of the corresponding report to investors.

As for the benefits, organizations that have become committed to the policy of investing retained earnings in fixed assets in a couple of years can expect to be at the forefront in a busy market segment. Often the production cycle of such an organization is faster, more productive, more economical and more efficient. They maintain a leading position in the segment and set the pace for other enterprises. At the same time, they most often act as a leader in the category of innovative potential.

On the other hand, such use of retained earnings is not without some drawbacks. In a few years, the company turns into a structure dependent on creditors. At the same time, not everyone who has chosen this path remains an operating company on the market. Very often, the account of such a company stubbornly shows zero for several years, until the moment when the invested equipment does not bring a return, that is, it does not pay off. Beginners rarely resort to capitalization of retained earnings.

How can retained earnings affect the authorized capital?

Over the past few years, it has become clear to the entrepreneur that retained earnings are an excellent opportunity to increase the authorized capital. The natural question is what is it for. Accounting for the authorized capital is necessary for several purposes at once. First of all, this is the compliance of the authorized capital with the requirements of the state. It is no secret that over the past few years each form of entrepreneurship has received its own authorized capital, established by the state, which is necessary for the functioning of the organization in the market. In this case, the allocation of retained earnings to the accounting of authorized capital is required in order to comply with the requirements of the state.

In addition, an increase in the authorized capital at the expense of retained earnings is required to transfer the company to another category. For example, if an organization needs to obtain the status of a joint-stock company and issue shares on the stock exchange, it will have to, among other things, increase the share capital account. And, finally, retained earnings are used to increase the authorized capital in order to issue more company shares. In this case, the 84th account in the balance sheet is transferred to the accounting of the authorized capital, and the company, by simple manipulations with the balance sheet, receives a larger authorized capital at no cost.

Why is it necessary to direct retained earnings to the reserve?

The reserve fund is a kind of guarantee to creditors that in the event of the bankruptcy of the enterprise, they can count on repaying the debt. In addition, the reserve fund also serves as a warning indicator in case of force majeure. Reserve capital accounting is also regulated by the state and over the past few years has established a minimum amount of this fund for the organization of each category. Retained earnings as a source of increasing reserve capital is extremely rare, and is typical for larger enterprises.

Such a reserve fund also serves as a kind of indicator of the attractiveness of the enterprise for creditors. If retained earnings on the balance sheet are spent mainly on reserve capital, this may indicate that the company is prone to accumulating borrowed funds. However, again, this is not typical for domestic enterprises, which, in the presence of attracted funds, first of all seek to either borrow more or pay off what they already have.

Dividends, like income taxes, can seriously reduce the resulting cash flow. Over the past few years and past production cycles, the company can finally dispose of the accumulated capital at its discretion. The distribution of capital received may be different. However, in any case, retained earnings, its accounting and an increase or decrease in account 84 is an opportunity for an enterprise to slightly ease its survival in the market, or risk everything and invest the money received in fixed assets. However, if undistributed profit is a loss for the enterprise, then the board of directors is deprived of the opportunity to puzzle over its target orientation.

Over the past few years, dividends have become firmly rooted in the position of priority costs for the enterprise. Retained earnings in this case are rarely positive, and if this happens, then it is primarily directed to repay debts. Domestic shareholders are not inclined to believe that retained earnings are primarily a long-term investment.

"Construction: accounting and taxation", 2012, N 2

Over the years of activity of the enterprise (LLC), a significant amount of retained earnings has been accumulated on account 84. At the same time, according to the results of the past 2011, the amount of profit received is not encouraging. To improve this indicator, the organization's management decided to write off certain types of expenses incurred in December 2011 (for the purchase of valuable gifts, payment for services for holding a New Year's corporate party) at the expense of retained earnings of previous years, and not for other expenses. Does this decision comply with accounting rules? How is the profit of the reporting year distributed? For what purposes can the profit accumulated on account 84 be spent?

Instructions for using the Chart of Accounts<1>does not contain a clear answer to the first of questions asked. Meanwhile, the Ministry of Finance has repeatedly addressed this problem in its letters. In particular, from the Letters of 12/19/2008 N 07-05-06/260, of 06/19/2008 N 07-05-06/138, of 01/12/2006 N 07-05-06/2, of 12/19/2006 N 07 -05-06 / 302, dated 07.27.2001 N 16-00-14 / 358, it follows that the profit accumulated over the entire period of the organization's activity should be reflected in the balance sheet in full, despite the fact that these funds, being in circulation, can be used by the company in the course of its activities. At the same time, in analytical accounting, information on the directions of use of funds can be formed to the account of retained earnings. In accordance with clause 11 PBU 10/99<2>expenses of the organization for the implementation of sports, recreation, entertainment, cultural and educational events and other similar events, as well as transfers by the organization of funds (contributions, payments, etc.) related to charitable activities, are other expenses. The instructions for the application of the Chart of Accounts do not provide for the reflection of the organization's expenses on account 84 "Retained earnings (uncovered loss)".

<1>Approved by the Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n.
<2>PBU 10/99 "Expenses of the organization", approved. Order of the Ministry of Finance of Russia dated 06.05.1999 N 33n.

In other words, the Ministry of Finance considers it impossible to write off the expenses incurred at the expense of the profit accumulated on account 84 of previous years. Moreover, in this case, the goals pursued by the organization do not matter (for example, the desire to improve the profit indicator of the current year, to avoid the application of PBU 18/02<3>). Thus, the cost of purchasing valuable gifts, paying for services for holding a New Year's corporate party, etc. must be reflected in the debit of account 91-2 "Other expenses".

<3>PBU 18/02 "Accounting for corporate income tax calculations", approved. Order of the Ministry of Finance of Russia dated November 19, 2002 N 114n.

Let's move on to the second question. In accordance with paragraph 1 of Art. 30 of Law N 14-FZ<4>the company may create a reserve fund and other funds in the manner and in the amount established by the charter of the LLC. In addition, the general meeting of the company's participants has the right to make a decision on the distribution of net profit between the participants quarterly, once every six months or once a year (Article 28 of this Law). Thus, when deciding how the profit received in 2011 should be distributed, one must be guided by the charter of the organization. If the charter does not provide for the creation of reserve and other funds, or they are formed in the amounts established by the charter, the profit received by the organization can be used to pay dividends<5>.

<4> the federal law dated 08.02.1998 N 14-FZ "On Limited Liability Companies".
<5>Situations when a company is not entitled to make a decision on the distribution of its profits among the participants are listed in paragraph 1 of Art. 29 of Law N 14-FZ.

The direction of part of the profit of the reporting year for the payment of income to the founders (participants) of the organization following the approval of the annual financial statements is reflected in the debit of account 84 and the credit of accounts 75 "Settlements with the founders" or 70 "Settlements with personnel for wages" (if the recipient of dividends is an employee of the organization ). A similar entry is made when paying intermediate income (Instructions for the use of the Chart of Accounts).

The next direction of spending net profit is an increase in the authorized capital of the company (quite rarely used in practice). In this case, the entry Debit 84 Credit 80 is made in the period of making the appropriate changes to the constituent documents of the organization.

Note! Profit distribution based on the results of the reporting (2011) year is classified as events after the reporting date. In December 2011 no entries are made in the accounting accounts. And if an event occurs after the reporting date in 2012 in general order a record is made of this event. These are the requirements of paragraphs 3, 5 and 10 PBU 7/98<6>.

<6>PBU 7/98 "Events after the reporting date", approved. Order of the Ministry of Finance of Russia dated November 25, 1998 N 56n.

Next - about the retained earnings of previous years. The modern economic dictionary (under the editorship of Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B., INFRA-M, 2006) defines this concept as follows: retained earnings - profit remaining after paying taxes and paying dividends, used for the purpose of reinvestment, for the needs of development. In other words, this is a part of the net profit received for the entire period of the organization's activity, which is reinvested by the owners.

For your information. Reinvestment - funds received in the form of investment income and aimed at expanding production.

Thus, retained earnings (as part of the capital accumulating profits not paid out in the form of dividends) are essentially a free reserve, which is an internal source of long-term financial resources. The organization's retained earnings are invested in specific property or are in circulation. Their value shows how much the assets of the enterprise have increased at the expense of its own sources.

It is known that when the acquired property is accepted for accounting, the balance of retained earnings reflected in the credit of account 84 does not decrease. In particular, when crediting property to fixed assets, there is no reason to make an entry Debit 84 Credit 83 "Additional capital" (that is, to reflect a decrease in net profit as a source of financing capital investments). At the same time, as follows from the Instructions for the Application of the Chart of Accounts, analytical accounting for account 84 is organized in such a way as to ensure the formation of information on the areas of use of funds. At the same time, in analytical accounting, retained earnings used as financial support production development of the organization and other similar activities for the acquisition (creation) of new property and not yet used, can be divided. In other words, the analytics on account 84 can be organized in such a way that the division of retained earnings into those used and not used to finance the organization's production development (for the acquisition and construction of assets) can be seen. In particular, the following sub-accounts can be opened for account 84:

• 84-1 "Profit to be distributed";
• 84-2 "Retained earnings in circulation";
• 84-3 "Retained earnings used".

With this construction of accounting, the entire amount of the net profit of the reporting year will be credited to subaccount 84-1 in correspondence with the debit of account 99, from which dividends are then accrued and (if necessary) deductions are made to the reserve fund. After reflecting these operations, the credit balance of this subaccount is transferred to the credit of subaccount 84-2 (Debit 84-1 Credit 84-2).

In turn, the credit of subaccount 84-2 accumulates the total amount of profit not distributed among the participants, which shows the amount of funds at the expense of which the acquisition (creation) of new property of the organization can be made. Accordingly, when acquiring property simultaneously with postings Debit 01, 03 Credit 08, the record Debit 84-2 Credit 84-3 is reflected in the accounting. Then the credit balance on subaccount 84-2 shows the size of the free balance of retained earnings, which can be directed to the production development of the organization.

Finally, the credit balance on sub-account 84-3 is the amount of retained earnings that is spent on financing capital investments.

Thus, only internal entries are made between the indicated sub-accounts, which do not affect the overall balance of account 84. However, the described procedure for using sub-accounts is not mandatory.

Note! There are special rules in the accounting legislation that establish the obligation to make an entry on account 84.

In particular, using this account, adjustments are reflected in connection with a change in the accounting policy of the organization and the correction of previously made errors (PBU 22/2010). In addition, in accordance with clause 15 of PBU 6/01, upon disposal of an item of fixed assets, the amount of its revaluation is transferred from additional capital to retained earnings. (The Ministry of Finance, in Letter No. 07-02-06/86 dated 05.20.2011, recalled that the legislation does not establish an obligation to separately reflect such revaluation amounts on account 84.)

And one more important nuance. For many years, the question remains whether it is possible to direct the retained earnings of previous years to pay dividends. There is an opinion that this cannot be done due to the following. In paragraph 1 of Art. 28 of Law N 14-FZ says about the distribution between the participants of the net profit of the company. In turn, the net profit is the amount reflected in the Profit and Loss Statement in line 2400<7>, that is, we are talking only about the net profit of the reporting year. Proponents of a different point of view, including the Ministry of Finance and tax authorities, proceed from the fact that neither tax nor civil legislation contains restrictions on the payment of dividends from retained earnings of previous years in the absence of net profit in the reporting year and special funds, the funds of which are intended for the payment of dividends . Therefore, retained earnings of previous years can be spent on the payment of income to the participants of the company. Officials confirm this conclusion by referring to Art. 43 of the Tax Code of the Russian Federation, according to which a dividend is any income received from an organization in the distribution of profit remaining after tax on the shares owned by a participant in proportion to his share in the authorized capital of this organization. Thus, for tax purposes, income is considered dividend if the payments were made:

• at the expense of the net profit of the organization;
• in proportion to the share of the participant in the authorized capital of the company.

<7>Order of the Ministry of Finance of Russia dated 02.07.2010 N 66n "On Forms of Accounting Statements of Organizations".

This position is expressed in the Letters of the Federal Tax Service of Russia dated 05.10.2011 N ED-4-3 / 16389, the Ministry of Finance of Russia dated 04/06/2010 N 03-03-06 / 1/235 and dated 05.18.2007 N 03-08-05, UFTS on Moscow dated 06/08/2010 N 16-15 / 060619@ and others. At the same time, in the Letters of the Ministry of Finance of Russia dated 06/17/2010 N 03-03-06 / 1/415, dated 03/17/2008 N 03-04-06 -01/60 and dated 06.02.2008 N 03-03-06/1/83 it is stated that the question of the legality of paying dividends at the expense of retained earnings of previous years does not fall within the competence of the Ministry of Finance of Russia. In our opinion, taking into account the Letter of the Federal Tax Service, an organization has the right to use retained earnings of previous years to pay dividends to LLC participants, especially if this is expressly provided for by the company's charter.

Summarize. Net profit can be distributed among the participants of the LLC, used to create reserve and other funds, as well as to increase the authorized capital of the organization. The legislation does not contain a mandatory requirement for the creation of a reserve or other fund by the company. Making a decision on the distribution of net profit between the participants is a right, not an obligation of the company. It is illegal to write off the current expenses of the organization to the debit of account 84, including for charity, the purchase of gifts, payment for services for corporate parties and other cultural, educational, sports, etc. events. character.

A.I. Serova

Journal Expert

"Construction:

Accounting

and taxation"

Yu.A. Inozemtseva, expert in accounting and taxation

How to "spend" net income correctly

As you know, the net profit (NP) of the company is distributed by the owners. But whatever their decision, the accountant must reflect it in accounting and reporting. The catch is that accounting regulations only talk about how to calculate profits. clause 83 of the Regulations, approved. Order of the Ministry of Finance dated July 29, 1998 No. 34n. During the year, it accumulates on the credit of account 99 “Profit and Loss”, and when compiling annual financial statements, the amount of net profit is debited from account 99 to the credit of account 84 “Retained earnings”. The credit balance on account 84 is your retained earnings (RRP). But about how to “spend” the profit, practically nothing is said in the accounting regulations, there is only a mention in the Chart of Accounts.

The procedure for the distribution of PE is established by the Laws on JSC and LLC sub. 11 p. 1 art. 48 of the Law of December 26, 1995 No. 208-FZ (hereinafter referred to as the JSC Law); sub. 7 p. 2 art. 33 of the Law of 08.02.98 No. 14-FZ (hereinafter - the Law on LLC). At the same time, joint-stock companies are obliged to send part of the emergency to the reserve fund, and LLCs can do this at will. pp. 1, 2 art. 35 of the JSC Law; paragraph 1 of Art. 30 of the LLC Law. The rest of the profit shareholders (participants) can distribute at their own discretion. So, under certain conditions, they can send profits to pay dividends in articles 42, 43 of the JSC Law; paragraph 1 of Art. 28, art. 29, paragraph 1 of Art. 30 of the LLC Law. And sometimes the owners decide to direct the PE to purchase new fixed assets or pay bonuses to employees. But the Laws on JSC and LLC do not say how in these cases to reflect the distribution of NRP in accounting.

To understand this issue, let's first talk about what NRP is from a reporting point of view.

What is capital and profit

Retained earnings are part of the capital of the organization, it is reflected in section III "Capital and reserves" of the balance sheet.

The standards establish rules only for the recognition of assets and liabilities, and capital is the arithmetic difference between them. There are no capital accounting rules in either RAS or IFRS.

In turn, profit is the difference between income and expenses and paragraph 7 of IAS 1 Presentation of Financial Statements.

As in the case of capital, the standards establish only the rules for accounting for income and expenses, and profit is a derived value.

Accounting for income is regulated by a special standard PBU 9/99, and expenses - PBU 10/99. Moreover, the concepts of "income" and "expenses" are also defined using the categories "assets" and "liabilities".

Thus, the income of an organization is an increase in its economic benefits as a result of the receipt of assets or the repayment of liabilities, with the exception of contributions by a participant in clause 2 PBU 9/99. As can be seen from the formula for calculating capital, as a result of the receipt of assets or the repayment of liabilities, capital increases.

The organization's expenses, on the contrary, are a decrease in its economic benefits as a result of the disposal of assets and (or) the incurrence of liabilities, with the exception of a decrease in contributions by decision of the participants (property owners) clause 2 PBU 10/99. As a result of the disposal of assets or the incurrence of liabilities, the capital of the organization decreases.

Of course, this is only general definitions income and expenses, for their recognition it is necessary to comply with certain conditions established in PBU 9/99 and 10/99, but we will not consider them in this article.

Note that the increase or decrease in the economic benefits of the organization that occurred as a result of transactions with its owners (for example, the payment of dividends) is not recognized as income or expenses. True, this is directly stated only in IFRS, but in fact this rule also applies to RAS. 109 IAS 1 Presentation of Financial Statements.

CONCLUSION

Capital, including NRP, is not the property of an organization, but abstract financial categories that represent the arithmetic difference between assets and liabilities (income and expenses).

We distribute profit

The question arises: if profit is not money, but an abstract indicator of financial statements, then how can it be distributed or “spent” on something? Conventionally, we can say that profit is “spent” when its value in the balance sheet decreases. This happens when paying dividends and creating a reserve fund. Let's consider these and other options for profit distribution, as well as their impact on reporting indicators.

Dividends

The most common way to distribute profits is to pay dividends. As we have already said, the outflow of assets in connection with the payment of dividends is not recognized as an expense of the organization. Therefore, the accrual of dividends to participants is directly related to the reduction of the NRP and the capital of the organization, is reflected in the posting: debit of account 84 “Retained earnings (uncovered loss)” - credit of account 75 “Settlements with founders”.

For information on how to correctly calculate and pay dividends to LLC participants, read:

Dividends can be paid in cash or property, but in any case, the payment of dividends will lead to a decrease in the assets of the organization paragraph 1 of Art. 42 JSC Law. When paying in money, the posting will be as follows: debit of account 75 “Settlements with founders” - credit of account 51 “Settlement accounts”. And the payment of dividends by property (for example, goods) is reflected as a sale by postings:

• debit of account 76 "Settlements with various debtors and creditors" - credit of account 90-1 "Revenue" - revenue from the sale of goods transferred as payment of dividends was recognized;
• debit of account 90-2 "Cost of sales" - credit of account 41 "Goods" - written off the cost of goods;
• debit of account 75 "Settlements with founders" - credit of account 76 "Settlements with various debtors and creditors" - the debt to the participant for the payment of dividends was set off.

CONCLUSION

The distribution of profits to dividends leads to a decrease in capital (including EIR line 1370) and assets.

reserve fund

As we have already said, JSCs are obliged to create a reserve fund. Its size must be at least 5% of the authorized capital of the company, and the charter of the joint-stock company may determine a larger amount of the fund yes paragraph 1 of Art. 35 of the JSC Law. If an LLC creates a reserve fund, then its size is determined solely by the charter paragraph 1 of Art. 30 of the LLC Law.

The reserve fund is created by posting: debit of account 84 "Retained earnings (uncovered loss)" - credit of account 82 "Reserve capital". And it is reflected in the balance sheet in line 1360 in section III "Capital and reserves".

Thus, from the point of view of financial reporting, the creation of a reserve fund leads to a reallocation of amounts within section III balance sheet (part of the NRP is, as it were, “shifted” into another article of capital). As a result of this redistribution, the organization's balance sheet structure improves. After all, only NRP can be distributed as dividends, and the reserve fund will theoretically remain in the capital forever. Since, despite what is written in the Laws on JSC and LLC, it is impossible to spend the reserve capital. And in the asset balance, the reserve fund corresponds to the resources (property, money) provided by the organization's own funds, which is certainly good.

From a financial (but not legal) point of view, the reserve fund can be compared to the authorized capital. It is no coincidence that in the JSC Law, when it comes to the requirements for the structure of the balance sheet (for example, when deciding on the payment of dividends), the reserve fund is mentioned along with the authorized capital. For example, on the day the decision to pay dividends is made, net assets should not be less than the sum of the authorized and reserve capital a paragraph 1 of Art. 43 JSC Law.

The reserve fund can be used to cover losses if the owners decide to do so. On the date of its adoption, a posting is made: the debit of account 82 “Reserve capital” - the credit of account 84 “Retained earnings (uncovered loss)”. The decision by the owners to pay off losses at the expense of reserve capital must be disclosed in the explanatory notes to the financial statements. clause 10 PBU 7/98. As you understand, as a result of using the reserve fund, as well as when creating it, the capital of the organization will not change. Covering losses at the expense of the reserve fund has rather a psychological effect - a "break-even" balance sheet looks more attractive to investors.

In addition, according to the Law on Joint Stock Companies, the funds of the reserve fund can be used to redeem bonds and buy back shares. However, in our opinion, this statement does not make sense. After all, to redeem bonds (or buy back shares) means to pay money to their holder. Consequently, only assets, and not an item of capital, can be directed to the redemption and redemption of securities.

The issue of bonds is reflected in the same way as raising a loan by posting on the debit of account 51 “Settlement accounts” and the credit of account 66 “Settlements on short-term loans and loans» clause 1 PBU 15/2008.

Accordingly, the redemption of bonds is reflected in the posting: debit of account 66 “Settlements on short-term loans and borrowings” - credit of account 51 “Settlement accounts”. As a result, assets and liabilities on the balance sheet decrease simultaneously. Capital items are not affected by this operation. True, the commentary to account 82 of the Instructions for the Application of the Chart of Accounts states that the repayment of bonds at the expense of the reserve fund is reflected in the posting: debit of account 82 “Reserve capital” - credit of account 66 “Settlements on short-term loans and borrowings”. However, we cannot agree with this. Indeed, as we have already said, the credit of account 66 reflects the issue of bonds, and not their redemption.

CONCLUSION

The creation of a reserve fund at the expense of PE and its use to pay off losses leads to a redistribution of amounts within capital items. It is impossible to use the reserve fund for other purposes (for example, to redeem bonds).

Accumulation and consumption funds

Sometimes owners want to use NRP to purchase new fixed assets, pay bonuses to employees, or donate to charity. Usually in such cases they decide to create so-called accumulation and consumption funds.

The accountant needs to reflect the decision of the owners in the accounting. But how to do this, because such funds are not mentioned either in the Laws on JSC and LLC, or in the current regulations on accounting. Let's say right away that you can not create any funds in accounting.

TELLING PARTICIPANTS

Pure profits can only be spent on dividends. It is not necessary to create consumption and accumulation funds from net profit, since “live” money, and not profit, is still spent on the acquisition of assets.

The very concept of funds at the expense of profit came to us from Soviet accounting. For example, Soviet enterprises created production development funds, the funds of which were directed to the purchase of new equipment. The Instructions to the Chart of Accounts of 1985 state that the funds of such a fund intended for the purchase of equipment should be kept in a bank in a special account e