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 in regulations accounting only talks about how to calculate profit 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 the annual financial statements sum net profit debited from account 99 to the credit of account 84 " Undestributed profits". 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 a part of the state of emergency to reserve fund, and LLCs can do it 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, these are only general definitions of 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.

OUTPUT

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 financial reporting, 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 relates directly to the reduction of the NRP and the capital of the organization, is reflected in the posting: the 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.

OUTPUT

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. It must be at least 5% authorized capital company, and the charter of the joint-stock company may also determine larger size background 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 redistribution of amounts within section III of the balance sheet (part of the NRP, as it were, is “shifted” to another capital item). 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 we are talking about 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 ah, the funds of the reserve fund can be directed to the redemption of bonds and the redemption of 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. Therefore, for redemption and redemption valuable papers you can send only assets, not an item of capital.

The issue of bonds is reflected in the same way as attraction of 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.

OUTPUT

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

Check accounting 84 is used to reflect and analyze generalized information on retained earnings (uncovered loss), the amount of which is determined based on the results of the reporting fiscal year. With the help of typical postings and illustrative examples, we will help you understand the specifics of using account 84 and the features of recording operations with retained earnings.

The following entries were made in the accounting of Megapolis JSC:

Dt	ct	Description	Sum	Document
08	60	A conveyor machine was purchased (175.300 rubles - .741 rubles)	148.559 rub.	Packing list
19.1	60	The amount of input VAT on the purchased machine is taken into account	.741 rub.	Invoice
01	08	Purchased conveyor machine accepted for accounting	148.559 rub.	OS commissioning act
68 VAT	19.1	The amount of input VAT accepted for deduction	.741 rub.	Invoice
		Target financing of the cost of the purchased machine is taken into account (due to the use of net profit)	148.559 rub.	Consignment note, Fixed asset entry act, Profit and loss statement

Coverage of losses on account 84 at the expense of the founders

According to the results of 2015, Fiesta JSC received losses in the amount of 841,800 rubles. The founders of Fiesta JSC are R.N. Saveliev. (58% stake in the authorized capital) and Markov K.L. (42% share in the authorized capital). By the decision of the board, it was established that the coverage of losses in 2015 will be carried out at the expense of the founders:

at the expense of Saveliev - 488.244 rubles. (841.800 rubles * 58%);
at the expense of Markov - 353.556 rubles. (841.800 rubles * 42%).

The protocol of the decision of the board was signed in February 2016. In the same month, funds were received from Savelyev and Markov and the settlement account of Fiesta JSC.

To record operations to cover losses at the expense of own funds founders, the following sub-accounts were opened in the balance sheet of Fiesta JSC:

75.1 - Saveliev's funds aimed at repaying the loss;
75.2 - Markov's funds used to cover the loss.

The following entries were made in the accounting of Fiesta JSC:

Dt	ct	Description	Sum	Document
75.1	84	Reflected the debt of Savelyev to pay off the loss with his own funds	488.244 rub.	Minutes of the decision of the board
75.2	84	Reflected the debt of Markov to repay the loss with his own funds	353.556 rub.	Minutes of the decision of the board
	75.1		488.244 rub.	Bank statement
	75.2	Funds from Savelyev were credited to pay off the loss of 2015	353.556 rub.	Bank statement
99 PNO	68 Income tax	The amount of the permanent tax liability is taken into account (488.244 rubles * 20%)	97.649 rub.	Minutes of the decision of the board

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 others 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 liability and the accrual of dividends during the year was not carried out, 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:

Sale and lease of assets belonging to the enterprise;
Markdown and revaluation of non-current assets;
Operations with foreign currency;
Investments in business shares of other companies;
Liquidation and donation of property;
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 from accounts 76 “Extraordinary income and expenses” is transferred to account 99 (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 Chief Accountant holds 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 reporting year according to the decision of the owners, they are 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 (Companies with limited liability) – 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 in current year profit received , then 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 , then 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 enterprises of different forms of ownership, 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 shown already 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 synthetic accounting accumulated profit 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.

The received positive result of 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 in annual reporting this report may not be included. 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.

When errors are found in large sums in costing, losses can occur even for highly 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:

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;
Dt84Kt82 - deductions to the reserve fund (creation or replenishment);
Dt84Kt75 (80) - increase in authorized capital (for an LLC on a loan, account 75, and for JSC - account 80);
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 net assets the enterprise is less (or will become less after the planned distribution of profits) of its authorized capital and reserve fund, and also 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 of it are 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. She is the main source net income society, raising the standard of living of the population.

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

"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 19.12.2008 N 07-05-06 / 260, of 19.06.2008 N 07-05-06 / 138, of 12.01.2006 N 07-05-06 / 2, of 19.12.2006 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 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 applying 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. Besides, general meeting members of the company have the right to quarterly, once every six months or once a year to make a decision on the distribution of net profit between the participants (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 unpaid profits in the form of dividends) are essentially a free reserve, which is internal source financial resources long-term nature. 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 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 specified subaccounts, which do not affect the overall balance of account 84. However, the described procedure for using subaccounts 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, this account reflects adjustments due to changes in accounting policy organization and correction of previously made mistakes (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 06.04.2010 N 03-03-06 / 1/235 and dated 05.18.2007 N 03-08-05, UFTS on Moscow dated 08.06.2010 N 16-15/ [email protected] and others. At the same time, in the Letters of the Ministry of Finance of Russia of June 17, 2010 N 03-03-06 / 1/415, of March 17, 2008 N 03-04-06-01 / 60 and of February 6, 2008 N 03-03- 06/1/83 states that the question of the legitimacy of paying dividends from 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

"Building:

Accounting

and taxation"

Is it possible, if there is a decision of the founder of the LLC, to use retained earnings of previous years to pay financial assistance employees, payment for children's vouchers, bonuses for anniversaries and holidays, as well as New Year's gifts for employees' children this year? What wiring should be done in this case?

After considering the issue, we came to the following conclusion:

Debit Credit, sub-account "Retained earnings to be distributed"
- received profit at the end of the year;

Debit, sub-account "Retained earnings subject to distribution" Credit, sub-account "Retained earnings in circulation" (or, for example, the Consumption Fund, the Social Sphere Fund, etc.)

By decision of the participants, part of the profit is reserved for the implementation social benefits employees and other similar expenses (in particular, for the purchase of vouchers to sanatoriums, rest homes, children's camps, for the provision of material assistance, for bonuses to employees, to pay for various social needs, etc.).

Debit, sub-account "Other expenses incurred from the profits of previous years" Credit
- accrued material assistance (bonus) to the employee;

Debit Credit
- material assistance (bonus) issued to the employee from the cash desk;

- reflects the use of a part of the profit provided for the payment of material assistance (premiums).

When purchasing New Year's gifts for the children of employees, the entries may be as follows (also excluding possible taxes):

Debit
Loan 012 "Inventory and materials purchased as gifts for employees"
- gifts are presented (transferred) to employees.

You can familiarize yourself with the procedure for accounting for payment for vouchers for employees and members of their families in a sanatorium, camp in the material: Encyclopedia of Solutions. Accounting for payment of vouchers for employees and members of their families.

Debit, sub-account "Retained earnings in circulation" Credit "Retained earnings used"
- reflects the use of a part of the profit reserved for the purchase of New Year's gifts (vouchers for employees or members of their families, etc.).

For your information:

In fairness, we note that the practice of reflecting on the account various kinds expenses are in place. So, for example, in the decision of the FAS Volga region dated 01.02.2013 N F06-11187 / 12 in case N A65-12517 / 201, the tax authorities and courts adhered to the position of reflecting social payments directly on the debit of the account (the situation concerned the payment of UST).

Encyclopedia of solutions. Accounting for the distribution of net profit;

Encyclopedia of solutions. Accounting for non-production premiums.

Prepared answer:
Legal Consulting Service Expert GARANT
Lazareva Irina

Answer passed quality control

The material was prepared on the basis of an individual written consultation provided as part of the Legal Consulting service.
*(1) Equity organizations form authorized (reserve), additional and reserve capital, retained earnings and other reserves (clause 66 of the Regulation on accounting and financial reporting in Russian Federation, approved by order of the Ministry of Finance of Russia dated July 29, 1998 N 34n).

*(2) Because material values(gifts) are purchased specifically for giving to employees, then, in our opinion, there are no grounds for preliminary reflection of their value on the accounts of goods and materials (10 "Materials", 41 "Goods") (clause 2 PBU 5/01 "Accounting for material and production reserves").