Account 84 Retained earnings (uncovered loss)
During the reporting year, the financial result of the organization’s activities (profit or loss) is reflected in account 99 “Profits and losses”.
On December 31 of each year, when reforming the balance sheet, the amount of net profit (loss) received is written off from account 99 to account 84 “Retained earnings (uncovered loss).”
For the convenience of accounting for the use of profits, sub-accounts are opened for account 84:
- “Profit to be distributed”;
- "Retained earnings";
- "Uncovered loss."
Profit received at the end of the reporting year is reflected in the credit of account 84:
Debit 99 Credit 84 subaccount “Profit subject to distribution” - reflects the net profit of the reporting year.
The loss identified at the end of the reporting year is reflected in the debit of account 84:
Debit 84 subaccount “Uncovered loss” Credit 99 - reflects the net uncovered loss of the reporting year.
How is it calculated on the balance sheet?
Unprofitability can be recorded in the balance sheet using the following accounts:
- Profit and loss – account. 99;
- Uncovered losses – inc. 88;
- Retained earnings – account. 84;
- Settlements with founders – account. 75;
- Authorized capital – account. 80;
- Reserve capital – account. 82.
In account 99, the balance can be either debit or credit. Before verification and approval, it is taken into account at NU (account 84). An accounting entry is created: Dt 99 Kt 84.
If there is a loss on the balance sheet, accounting will be required: Dt 84 Kt 99.
At the start of the next year, business owners agree on a decision on the redistribution of income. From account 84, funds are redirected to certain purposes.
If cash transfers to business owners are planned from profit funds, then the following entry is created in the balance sheet: Dt 84 Kt 75.
If the amount of losses is significant, then it is advisable to use reserved funds to cover them: Dt 82 Kt 84.
Dividend payments to business owners are not accrued until losses are fully covered.
Use of profits
The decision on the distribution of net profit is made by the owners (founders) of the organization at the general meeting of shareholders (in a JSC) or the general meeting of participants (in an LLC). This decision is usually made at the beginning of the year following the reporting period.
The distribution of net profit is within the exclusive competence of the general meeting of participants (shareholders) and cannot be carried out by the sole direction (order) of the head of the organization.
The meeting of shareholders (participants) of the organization may decide not to distribute the profit received at all (or leave some part of it undistributed).
Net profit can be used for:
- payment of dividends to shareholders (participants) of the organization;
- creation and replenishment of reserve capital;
- repayment of losses from previous years.
In the first two cases, the use of net profit is reflected in the debit of account 84:
Debit 84 subaccount “Profit subject to distribution” Credit 75 (70) – dividends accrued to shareholders (participants) of the organization;
Debit 84 subaccount “Profit subject to distribution” Credit 82 – net profit was directed to the creation and replenishment of the organization’s reserve capital.
If the owners of the organization decided to use the net profit to pay off losses of previous years, an entry is made in the accounting for the subaccounts of account 84:
Debit 84 subaccount “Profit subject to distribution” Credit 84 subaccount “Uncovered loss” - net profit is aimed at paying off losses of previous years.
After you have recorded the use of profits (repayment of losses), the balance in the “Profit to be distributed” subaccount of account 84 shows the amount of retained earnings. This amount can be transferred to the appropriate subaccount:
Debit 84 subaccount “Profit subject to distribution” Credit 84 subaccount “Retained earnings” - reflects the amount of the organization’s retained earnings.
Uncovered loss
The decision on how to pay off the resulting loss is also made by the owners (founders) of the organization (general meeting of shareholders or meeting of participants in an LLC).
The loss can be repaid through:
- targeted contributions from shareholders (participants) of the organization;
- reserve capital funds;
- funds of retained earnings from previous years.
In the first two cases, entries are made to the credit of account 84:
Debit 75 (70) Credit 84 sub-account “Uncovered loss” - targeted contributions from the organization’s shareholders (participants) were sent to repay the loss.
Debit 82 Credit 84 subaccount “Uncovered loss” - reserve capital funds were used to repay the loss.
If the owners of the organization decided to pay off the loss using retained earnings from previous years, an entry is made in the accounting to the subaccounts of account 84:
Debit 84 subaccount “Retained earnings” Credit 84 subaccount “Uncovered loss” - retained earnings from previous years are used to repay the loss.
The loss can also be written off from the balance sheet if the general meeting decides to reduce the authorized capital to the amount of the organization’s net assets.
After the corresponding changes in the constituent documents have been registered, make the following entry:
Debit 80 Credit 84 subaccount “Uncovered loss” - the authorized capital is reduced to the amount of the organization’s net assets.
Step-by-step instruction
On January 17, I.I. Ivanov, who is a participant in TEKHNOMIR LLC (50% share in the management company), left the Company. As a result, he was paid the actual value of the share.
The share of the withdrawing participant passed to the Company. The authorized capital of TEKHNOMIR LLC is 1,000,000 rubles, incl. in the shares of the owners:
- 30% (300,000 rubles) - Druzhnikov Georgy Petrovich;
- 20% (RUB 200,000) - Zarya LLC;
- 50% (RUB 500,000) share belongs to the company itself - TEKHNOMIR LLC.
On June 1, at the general meeting of the company’s participants, a decision was made to redeem the share of the withdrawing participant by reducing the authorized capital. The company's participants refused to purchase the share of the withdrawing participant, and the sale of the share to third parties is prohibited in accordance with the company's Charter.
On June 22, the Company submitted documents for state registration to amend the authorized capital.
On June 25, changes in the authorized capital were registered in the Unified State Register of Legal Entities.
Let's look at step-by-step instructions for creating an example. PDF
| date | Debit | Credit | Accounting amount | Amount NU | the name of the operation | Documents (reports) in 1C | |
| Dt | CT | ||||||
| Withdrawal of a participant from the Company | |||||||
| January 17 | 80.09 | 80.09 | 500 000 | Transfer of a share from a participant to the Company at nominal value | Manual entry - Operation | ||
| 81.09 | 75.02 | 2 000 000 | Reflection of the Company's debt to the withdrawing participant in the amount of the actual value of the share | ||||
| The decision of the meeting of participants to repay the company’s share at the expense of the management company | |||||||
| June 25 | 80.09 | 81.09 | 500 000 | Redemption of the company's share by reducing the capital in the amount of the nominal value of the share | Manual entry - Operation | ||
| 91.02 | 81.09 | 1 500 000 | Reflection of expenses for the repurchase of a share by the company in the amount of the excess of the actual value of the share over the nominal value | ||||
Instructions 84 count
Instructions for using the chart of accounts for accounting the financial and economic activities of organizations in accordance with Order No. 94n dated October 31, 2000:
Account 84 “Retained earnings (uncovered loss)” is intended to summarize information about the presence and movement of amounts of retained earnings or uncovered losses of the organization.
The amount of net profit of the reporting year is written off with the final turnover of December to the credit of account 84 “Retained earnings (uncovered loss)” in correspondence with account 99 “Profits and losses”.
The amount of the net loss of the reporting year is written off with the final turnover of December to the debit of account 84 “Retained earnings (uncovered loss)” in correspondence with account 99 “Profits and losses”.
The direction of part of the profit of the reporting year to pay income to the founders (participants) of the organization based on the results of approval of the annual financial statements is reflected in the debit of account 84 “Retained earnings (uncovered loss)” and the credit of accounts 75 “Settlements with founders” and 70 “Settlements with personnel for wages” " A similar entry is made when paying interim income.
The write-off of the loss of the reporting year from the balance sheet is reflected in the credit of account 84 “Retained earnings (uncovered loss)” in correspondence with accounts: 80 “Authorized capital” - when the amount of the authorized capital reaches the value of the organization’s net assets; 82 “Reserve capital” - when funds from reserve capital are used to pay off losses; 75 “Settlements with founders” - when repaying the loss of a simple partnership at the expense of targeted contributions of its participants, etc.
Analytical accounting for account 84 “Retained earnings (uncovered loss)” is organized in such a way as to ensure the generation of information on the areas of use of funds. At the same time, in analytical accounting, funds of retained earnings used as financial support for the production development of the organization and other similar activities for the acquisition (creation) of new property and not yet used can be divided.
Alternative measures
It is possible that after writing off the loss, the financial picture will improve. However, there are several legal ways to pay income to the founder if there is no profit.
"Surcharge"
If the founder is an employee of his own company, he can receive his income in the form of an increased (compared to the usual “rates”) salary (do not forget to draw up a staffing table).
The amount of the “surcharge” will reduce income tax. From the point of view of salary taxes, it needs to be subject to all of them in full. This will also reduce taxes.
The founder-employee will have to pay personal income tax at a rate of 13% (it is the same for salary and dividends). Of course, from paying income to the founder in the form of additional wages, the company will suffer significant losses in the form of “real” money.
"Present"
You can choose the option with a gift. Whom to reward and in what amount is a matter for the company. The main thing is that it is not often and in accordance with a written gift agreement. Remember: giving money is not prohibited. The amount of the gift cannot be included as expenses, but insurance premiums do not need to be charged. The main thing is to check whether the issuance of gifts is provided for in the employment or collective agreement. If provided, then they are part of the remuneration. This means that insurance premiums will have to be calculated, even if there is a written gift agreement.
As for personal income tax on a gift, it will have to be withheld from an amount exceeding 4,000 rubles - in accordance with the general procedure. In general, be careful - there are quite a lot of nuances associated with the “gift issue”.
Gifts can be presented on the occasion of a specific event (birthday, wedding, New Year, other public or professional holiday) or for no reason.
According to the gift agreement, the donor (clause 1 of Article 572 of the Civil Code of the Russian Federation):
- transfers or undertakes to transfer ownership of an item (including money and gift certificates) to the donee free of charge;
- transfers free of charge or undertakes to transfer to the donee a property right (claim) to himself or to a third party
- releases or undertakes to release the donee from a property obligation to himself or to a third party.
To avoid the need to charge and pay insurance premiums on the value of the gift, the fact of its transfer must be properly documented. The agreement for the donation of movable property must be concluded in writing in the case where the donor is a legal entity and the value of the gift exceeds 3,000 rubles (clause 2 of Article 574 of the Civil Code of the Russian Federation).
Companies can give gifts only to individuals, for example, employees (including former employees), clients, and employees of counterparties.
If a gift agreement is concluded when transferring a gift, you will not have to pay contributions on its value (letter of the Ministry of Finance of Russia dated December 4, 2017 No. 03-15-06/80448, letter of the Ministry of Labor of Russia dated September 22, 2015 No. 17-3/B-473). In this case, the object of taxation by insurance premiums does not arise regardless of the value of the gift.
Payments made under civil law contracts, the subject of which is the transfer of ownership or other proprietary rights to property, are not subject to insurance premiums. Such agreements include a gift agreement (Article 572 of the Civil Code of the Russian Federation). Therefore, gifts formalized by a gift agreement are not included in the base subject to insurance contributions (Part 4 of Article 420 of the Tax Code of the Russian Federation).
note
If the available sources to repay the uncovered loss of the reporting year are not enough, the uncovered loss is left on the balance sheet. However, an organization that has suffered a loss at the end of the year should pay special attention to the value of its net assets.
Officials also note that the donation agreement for movable property must be made in writing in the case where the donor is a legal entity and the value of the gift exceeds 3,000 rubles (Clause 2 of Article 574 of the Civil Code of the Russian Federation). Does this mean that if the value of the gift is less than 3,000 rubles, such an agreement can be concluded orally and insurance premiums do not need to be charged on its value?
We will find the answer in letters from the Ministry of Health and Social Development of Russia dated March 5, 2010 No. 473-19 and the Pension Fund of the Russian Federation dated September 29, 2010 No. 30-21/10260. It says that the object of taxation by insurance premiums does not arise if the gift agreement is concluded in writing, regardless of the value of the gift.
In addition, if the issuance of gifts is provided for in the employment or collective agreement, then they are part of the remuneration. This means that the cost of gifts must be included in the calculation base for calculating insurance premiums.
The courts do not have a uniform approach to the situation.
Loan day
Now consider the option of an interest-free or low-interest loan from the company. This method has its negative sides. Firstly, the recipient’s income will be savings on interest - the so-called material benefit. It is determined on the last day of each calendar month and is subject to personal income tax at a rate of 35%.
If an employee receives a loan from an organization, then a material benefit arises provided that he pays interest for the use of funds at a rate that is lower than 2/3 of the refinancing rate (key rate) of the Bank of Russia (for loans issued in rubles) or 9% per annum (for loans issued in foreign currency). The rate of personal income tax levied on amounts of material benefits at preferential interest, as already mentioned, is 35%.
The tax is imposed on the difference between the amount of interest calculated based on 2/3 of the refinancing rate (key rate) of the Bank of Russia (for ruble loans) on the date of actual receipt of income or 9% per annum (for foreign currency loans), and the amount of interest that a person must pay on loan according to the agreement. The date of actual receipt of income in the form of material benefits from savings on interest is determined as the last day of each month during the period for which borrowed (credit) funds were provided (subclause 7, clause 1, article 223 of the Tax Code of the Russian Federation). Let us recall that previously, until January 1, 2021, income in the form of material benefits on loans was determined on the day of payment of interest on the borrowed funds received.
Please note: the company must withhold and pay tax on income from material benefits.
To determine the amount of material benefit, the accountant must:
- calculate the amount of interest on borrowed funds based on 2/3 of the refinancing rate (key rate) of the Bank of Russia (for loans issued in rubles) on the date of actual receipt of income or 9% per annum (for loans issued in foreign currency);
- deduct from the amount of interest determined based on 2/3 of the refinancing rate (key rate) of the Bank of Russia (for loans issued in rubles) on the date of actual receipt of income or 9% per annum (for loans issued in foreign currency), the amount of interest that should repay the employee's loan.
The amount of interest is calculated based on 2/3 of the refinancing rate (key rate) of the Bank of Russia (for loans issued in rubles) on the date of actual receipt of income according to the formula.
Formula for calculating the amount of interest on loans in rubles
The amount of interest is calculated based on 9% per annum (for loans issued in foreign currency) according to the formula.
Formula for calculating the amount of interest on loans in foreign currency
Income in the form of material benefits when using an interest-free loan arises as long as the borrower uses the loan provided to him.
When using a loan received for the construction or purchase of housing, tax is not withheld, even if the interest on it is below 2/3 of the current refinancing rate of the Central Bank of the Russian Federation. The right to tax exemption must be confirmed by a notification from the tax office, since it is associated with a property deduction (clause 1 of Article 220 of the Tax Code of the Russian Federation).
If the company forgives the borrower's debt, income in the form of material benefits no longer arises. The former borrower acquires the right to dispose of all the money received (or the outstanding part) at his own discretion, that is, he already receives economic benefits. Such income is also subject to personal income tax. The amount of the forgiven debt (gift) is the taxpayer’s income, subject to personal income tax at a rate of 13% (letter of the Ministry of Finance of Russia dated July 15, 2014 No. 03-04-06/34520).
Please note: the tax accrued on material benefits is not excessively withheld and does not need to be returned (letter of the Ministry of Finance of Russia dated January 10, 2018 No. 03-04-05/310).
Finally, the loan will have to be repaid sooner or later. If the return was not expected, and the company forgives the borrower’s debt, there will be no income in the form of material benefits. But income will appear in the form of economic benefit, and such income - this will be a non-repaid loan - is subject to personal income tax at a rate of 13%. The date of receipt of income upon debt forgiveness is the date the debt is written off from the organization’s balance sheet. This date can be delayed if the borrower confirms his debt from time to time and extends the statute of limitations.
When writing off a loan debt, there is no need to pay insurance premiums, since in this case there is no taxable object. There is another method, but it is safe to use if there are several founders and you just need to come up with an additional form of payment for them, and the founders themselves are not against providing financial assistance to the company . The main thing is that everyone’s share in the authorized capital is less than 25%.
The founder, whose share is less than 25%, provides the company with a loan at a very high interest rate. He will receive his income in the form of this percentage and pay personal income tax on it at a rate of 13%. There is no need to accrue contributions, because in this case, just like in the previous one, there is no object of taxation.
And the company will have accountable expenses. There is virtually no risk of negative consequences. The inspectorate cannot control prices when the transaction does not relate to controlled transactions between related parties (Article 105.14 of the Tax Code of the Russian Federation).
Interdependence is determined by the authority to appoint the company's management, official subordination, and family ties. And one of the cases of recognizing persons as interdependent is their participation in the authorized capital of another person, if the share of direct or indirect participation is more than 25%. In our case, the share is less than 25%.
There are no specific accounting features or restrictions on the amount of interest on debt obligations on transactions between related parties if such transactions are not recognized as controlled.
You can establish the “needed” percentage to be paid by comparing the financial result without it and the acceptable (or desired) financial result taking it into account.
Sergey Danilov,
PB correspondent
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Typical postings for account 84
By debit of the account
| Business transactions | Debit | Credit |
| Expenses were paid from retained earnings (by decision of the founders of the organization) | 84 | 51 |
| Expenses were paid from retained earnings from a foreign currency account (by decision of the founders of the organization) | 84 | 52 |
| Expenses were paid from retained earnings from a special bank account (by decision of the founders of the organization) | 84 | 55 |
| Dividends (income) are accrued to the founders (participants) who are employees of the organization | 84 | 70 |
| Dividends (income) accrued to the founders (participants) of the organization | 84 | 75-2 |
| Income accrued to the participants of the simple partnership (on a separate balance sheet of the joint activity) | 84 | 75-2 |
| Net profit is aimed at covering the loss from the activities of the branch, allocated to a separate balance sheet (posting in the accounting of the head office of the organization) | 84 | 79-2 |
| Net profit is aimed at covering losses of the head office of the organization (posting in the branch accounting) | 84 | 79-2 |
| The authorized capital was increased due to net profit | 84 | 80 |
| Reserve capital has been formed (increased) at the expense of net profit | 84 | 82 |
| Aimed at forming (increasing) additional capital and net profit | 84 | 83 |
| Subaccounts reflect the use of net profit for production development | 84 | 84 |
| The loss of previous years was repaid at the expense of net profit (posting to subaccounts) | 84 | 84 |
| The loss of the reporting year during the balance sheet reformation is reflected | 84 | 99 |
By account credit
| Business transactions | Debit | Credit |
| The loss is covered by targeted contributions from employees | 73 | 84 |
| The loss is covered by targeted contributions from the founders (participants) of the organization | 75 | 84 |
| The share of net profit due to a separate division of the organization is reflected (posting in the accounting of the head office of the organization) | 79-2 | 84 |
| The authorized capital is reduced to the amount of net assets (after amendments to the constituent documents) | 80 | 84 |
| Reserve capital used to cover losses | 82 | 84 |
| Additional capital is written off upon disposal of fixed assets that were revalued | 83 | 84 |
| Additional capital used to pay off losses | 83 | 84 |
| The net profit of the reporting year is reflected during the balance sheet reformation | 99 | 84 |
Accounting operations on the movement of authorized capital
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| No. | Contents of operation | Debit | Credit |
| The authorized capital of the organization is declared, the debt of the founders to contribute their share to the capital of the organization is reflected | 75-1 “Calculations for contributions to the authorized (share) capital” | 80 “Authorized capital” | |
| Property and cash were accepted as contributions from the founders to the authorized capital | 07,08,10,41,50,51, 52,58 | 75-1 | |
| The increase in the authorized capital is reflected due to: - additional capital - retained earnings | 83 “Additional capital” 84 “Retained earnings (uncovered loss)” | 80 "Authorized capital" | |
| The debt of the company to the retired participant upon liquidation of the company is reflected | 80 "Authorized capital" | 75-1 “Calculations for contributions to the authorized (share) capital” | |
| The authorized capital is reduced by directing part of it to cover losses (in cases where the size of net assets is less than the authorized capital) | 80 "Authorized capital" | 84 “Retained earnings (uncovered loss)” | |
| Purchased own shares of a joint-stock company or shares in the authorized capital of an LLC for cash, by bank transfer, for foreign currency | 81 “Own shares (shares)” | 50,51, 52, 55 | |
| The negative difference between the actual costs of repurchasing shares (interests) and their nominal value is included in other income | 81 “Own shares (shares)” | 91-1 “Other income” | |
| The positive difference between the actual costs of repurchase (shares) and their nominal value is included in other expenses | 91-2 “Other expenses” | 81 “Own shares (shares)” | |
| The decrease in the authorized capital is reflected in connection with the cancellation of own shares (stakes) purchased from shareholders (participants) | 80 "Authorized capital" | 81 “Own shares (shares)” | |
| The amount of lost repurchased shares was attributed to the guilty parties | 73 “Settlements with personnel for other operations” | 81 “Own shares (shares)” |
The repurchase of own shares is reflected in correspondence with account No. 80 “Authorized capital” and No. 81 “Own shares (shares)”.
Accounting for reserve capital
A reserve fund is created in the joint-stock company in the amount provided for by the charter of the company, but not less than 5% of its authorized capital (Article 35 of Federal Law No. 208-FZ of December 26, 1995 (as amended on July 18, 2009 No. 181-FZ, as amended on July 27, 2010).
The reserve fund of the company is formed through mandatory annual contributions until it reaches the size established by the charter of the company. The amount of annual contributions is provided for by the company's charter, but cannot be less than 5 percent of net profit until the amount established by the company's charter is reached. The company's reserve fund is intended to cover its losses, as well as to repay the company's bonds and repurchase the company's shares in the absence of other funds. The reserve fund cannot be used for other purposes.
The company's charter may provide for the formation of a special fund for the corporatization of the company's employees from the net profit. Its funds are spent exclusively on the acquisition of shares of the company, sold by the shareholders of this company, for subsequent distribution to its employees. In the event of a paid sale to the company's employees of shares acquired at the expense of the company's employees' corporatization fund, the proceeds are used to form the said fund.
The reserve fund is also created by joint ventures, general partnerships and limited partnerships. The size and procedure for the formation of funds are provided for in the charters of organizations and in current legislation.
Generalization of information on the movement of reserve capital formed at the expense of the organization’s profits is carried out on the passive synthetic stock account of the same name No. 82 “Reserve Capital”.
Table 72
Accounting entries for accounting for reserve capital
| No. | Contents of operation | Debit | Credit |
| Deductions were made from net profit to the reserve fund | 84 “Retained earnings (uncovered loss)” | 82"Reserve capital" | |
| The direction of the amounts of the reserve fund for the redemption of bonds of a joint-stock company, a limited liability company is reflected | 82"Reserve capital" | 66 “Settlements for short-term loans and borrowings”, 67 “Settlements for long-term loans and borrowings” | |
| The direction of the reserve fund amounts to repay the loss of the reporting year is reflected | 82"Reserve capital" | 84 “Retained earnings (uncovered loss)” |
The credit balance on account No. 82 “Reserve capital” shows the amount of unused reserve at the beginning of the month, credit turnover - deductions to reserve capital from profit, debit turnover - the use of the reserve for strictly established purposes: directing it to cover the organization’s loss for the reporting year, to repay long-term and short-term bonds of a joint-stock company (LLC, partnership).
Accounting for additional capital
There is one more type in the structure of equity capital - additional, which is formed due to the increase in the value of non-current assets during revaluation and share premium (the difference between the sale and par value of shares received in the process of forming the authorized capital of the joint-stock company).
Table 73
Accounting entries for the movement of additional capital
| No. | Contents of operation | Debit | Credit |
| The cost of fixed assets increased as a result of revaluation | 01 "Fixed assets" | 83 “Additional capital” | |
| Accrued depreciation was adjusted when revaluing fixed assets | 83 “Additional capital” | 02 “Depreciation of fixed assets” | |
| The share premium when placing own shares is reflected (the excess of proceeds from the sale of shares over their par value) | 75-1 “Calculations for contributions to the authorized (share) capital” | 83 “Additional capital” | |
| Positive exchange rate difference on contributions of non-residents in foreign currency to the authorized capital of the organization is reflected | 75-1 “Calculations for contributions to the authorized (share) capital” | 83 “Additional capital” | |
| The direction of additional capital funds to increase the authorized capital is reflected | 83 “Additional capital” | 80 “Authorized capital” | |
| Used amounts of budget allocations were allocated to the increase in additional capital | 86 “Targeted financing” | 83 “Additional capital” | |
| Additional capital is aimed at repaying the loss of the reporting year | 83 “Additional capital” | 84 “Retained earnings (uncovered loss)” | |
| The value of fixed assets has been reduced during revaluation (depreciation), if previously this object was revalued towards an increase in value (revaluation) | 83 “Additional capital” | 01 "Fixed assets" | |
| An adjustment was made to accrued depreciation during the revaluation (devaluation) of fixed assets, if previously this object was revalued upward in value (revaluation) | 02 “Depreciation of fixed assets” | 83 “Additional capital” | |
| The distribution of amounts of additional capital between the founders of the organization is reflected | 83 “Additional capital” | 75-2 “Calculations for payment of income” | |
| The use of the amount of revaluation of fixed assets upon their sale and other disposal is reflected | 83 “Additional capital” | 84 “Retained earnings (uncovered loss)” |
Additional capital funds are used to increase the authorized capital, distribute among the founders of the organization, repay the amounts of decrease in the value of non-current assets as a result of revaluation and cover losses. Synthetic accounting of additional capital is carried out on the passive fund account of the same name No. 83 “Additional capital”.
The credit of account No. 83 “Additional capital” reflects the formation of capital, the debit reflects the use (write-off), the credit balance reflects the amount of the balance of additional capital at the beginning or end of the reporting period.
Accounting for organization reserves
In a market economy, the creation and proper use of reserve funds becomes important. Reserves for future expenses are created by making equal deductions from production and distribution costs, and equalizing the financial results of the organization throughout the year:
- reserve of expenses for payment of upcoming regular vacations of the organization’s employees (including payments for social insurance and security);
- reserve for the payment of annual remuneration for length of service;
-reserve for expenses for repairs of fixed assets;
-reserve for warranty repairs and warranty service of products, work and services;
- reserve for future costs for land reclamation and implementation of other environmental measures;
- reserve for upcoming costs for preparatory work due to the seasonal nature of production.
The size of each of the reserved amounts must be justified by calculation. For this purpose, estimates are drawn up for planned repairs of fixed assets, expenses for the payment of vacation pay and remuneration for long service, etc.
Table 74
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