In the modern economy, all enterprisesexist on the money received when selling goods, works or services. But the participants of the society should also have their income from the company's activities. For these purposes, there is a special balance line - retained earnings.
Any enterprise starts its activities forincome generation. Members of the society expect to have additional money, regardless of whether they will work at this enterprise or not. Undistributed profit in the balance sheet is the remaining income of the firm after payment of all debts to suppliers and employees of the company.
However, when implementing an entrepreneurialthe organization may come to losses, for which the participants of the society are also responsible. The tax code allows to increase the net assets of the enterprise by means of shareholders (participants), and also the repayment of the uncovered loss is also suitable. The assistance of shareholders (participants) is vital when the enterprise incurs losses, as it threatens with bankruptcy and liquidation of the enterprise. Therefore, the owners' coverage of the loss acts as the most frequent case of recovering the value of the company's net assets.
To clarify this aspect, let us turn toRegulations on accounting, regulating the procedure for monitoring financial issues in enterprises. In accordance with paragraph 66 of PBU, retained earnings in the balance sheet are the company's own capital. It is formed not at the expense of contributions of participants, but at the expense of the efforts of the enterprise itself, while being a factor in the growth of the welfare of the organization and its owners. In other words, undistributed profit is a source of own capital not of external but of internal origin.
The received profit can be spent ondistribution of dividends between participants or remain at the enterprise in the form of additional capital, cash or fixed assets for further development of activities and payment of losses.
The account "Undistributed profit / loss" is necessary for storing information about the presence and movement of the amount of this profit or loss of the company on the balance sheet of the enterprise.
It is worth noting that the source of tax onprofit, tax sanctions is account 99 after the formation of the financial result. Undistributed profit in the balance sheet is the source of payment of dividends, deductions to funds. In this case, we are talking about the use of net profit.
When they say that the profit tax, dividendsare paid at the expense of net profit, implying the last profit after taxation, this is also true. However, the accounting clearly separates the formation of net profit during the reporting period and its use with the account of accounting for retained earnings for the statutory purposes of the enterprise.
The right to dispose of net profit belongs toowners of the enterprise, which is reflected in the relevant standards. The owners of the enterprise have the right to spend undistributed profits for various purposes, for example, on encouraging employees, charity, financing social events, holding cultural and sports events, etc. However, in most cases, this profit goes either to dividends or to the improvement and development of business.
An authorization document for postings todistribution of profits is the protocol of the participants of the enterprise. In addition, records can be made on the basis of the provisions of the charter, if they have defined the directions of using net profit and established the norms of deductions. Any other costs beyond the will of the owners of the enterprise (including so-called costs that do not reduce taxable profits) can not be written off from the account of undistributed profit / loss.
The distribution of profits is carried out at the annualmeeting of participants. If an enterprise distributes net profit for 2013, then the posting takes place in 2014, when a meeting of participants (shareholders) is held.
So, the retained earnings in the balance sheet areactive-passive account. It forms undistributed (by nature - net, that is, received after taxation) profit or uncovered loss. Debit account 84 reduces the company's own capital, the credit balance, respectively, increases. The right to dispose of net profit belongs to the owners of the enterprise. Of all other components of equity capital, profit is the most free to use, as the list of directions of its spending is open. However, it must be remembered that this does not give grounds to the enterprise freely, bypassing the will of shareholders (participants), to spend it for purposes not provided for by the charter and other documents of the enterprise.
In the analytical account, account 84 should be openedseparate sub-accounts, among which are "Dividends charging", "Charges to reserve capital", "Revaluation of the OS", etc. It is also rational that the profit (loss) of the reporting year and the retained profit of the previous year be taken into account in separate subaccounts. In addition, on account 84 (since there is no plan for a separate balance sheet account), it is possible to take into account various funds created from net profit at the enterprise's initiative: a special employee equity fund, a development fund, etc.
Of great interest is the fact that the Ministry of Financerecommendatively, within the framework of analytical accounting, separately reflect that part of the net profit that is directed to the development of the enterprise. As is known, the acquisition of fixed assets is made at the expense of property (money), and there are no mandatory postings at the source's instruction. This posting does not lead to a reduction in retained earnings and the size of the company's net assets. An enterprise can easily prove that fixed assets were acquired solely at the expense of profit, and not in another way. Identify the sources of funding can also be based on the analysis of the structure of the balance. This analysis assumes that investments are primarily made at the expense of net profit, the second - at the expense of long-term loans, in the third - at the expense of other accounts payable.
It is more profitable for an enterprise to maintain its owncapital is in the net profit, and not in the authorized or additional capital. Profit can quickly restore losses, replenish the authorized capital, if it is legislated to increase its minimum size, increase other funds in equity. The higher the amount of undistributed profits, the further the enterprise from the threat of bankruptcy, and the more optimistic its prospects.
In conclusion, it should be noted that the accountretained earnings is fully in the hands of the chief accountant. Yes, no one except company members can dispose of the company's property, but only from the chief accountant depends the calculation of the profit of the organization, the correctness of the calculation of certain amounts and a double entry in the accounts of accounting. Only the chief accountant can tell the participants of the society how to act correctly in this or that situation, where and what amounts of undistributed profits to send.