For joint-stock companies, other companies and other organizations, the amount is not covered in the manner prescribed by law from their own sources.

The uncovered loss is determined taking into account payments to the budget and other expenses repaid at the expense of, and shows the amount of uncovered loss for reporting date regardless of the time of its formation.

A loss may result from:

• excess of expenses over income in terms of financial economic activity and non-operating operations;
• identification of significant errors from previous years in the reporting year;
• changes .

Reasons for receiving an uncovered loss:

• receiving actual negative results from the company’s activities due to excess costs over income;
• influenced financial condition company changes in accounting policies;
• found in this year mistakes made in previous years that affected the financial result.

In accounting, an uncovered loss is reflected in a separate account “Retained earnings (uncovered loss)” (see), is recorded as its debit, and amounts used to cover the loss are recorded as a credit. The debit balance of the account can be shown either in the asset of the balance sheet (its currency increases by this amount), or in the liability of the balance sheet with a decrease in the amount of the uncovered loss in the balance sheet currency.

The loss (both previous years and the current year) can be covered at the expense of (the fund) and targeted contributions owners of the company. 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. If the organization does not have sources to repay losses, then the founders of the company may decide to cover them through additional contributions.

The write-off of a loss for the reporting year from the balance sheet is reflected in the credit of the account “Retained earnings (uncovered loss)” in correspondence with the accounts: “Authorized capital” - when the amount is increased authorized capital up to the value net assets organizations; “Reserve capital” - when funds from reserve capital are used to pay off losses; “Settlements with founders” - when repaying the loss of a simple partnership at the expense of targeted contributions of its participants, etc.

The account “Retained earnings (uncovered loss)” is organized in such a way as to ensure the formation of information on the areas of use of funds.

Uncovered loss is the final financial result obtained based on the results of the organization’s activities for the reporting year; characterizes the decrease in its capital. Distinguish uncovered loss without taking into account the decision to cover the loss fully or partially at the expense of relevant sources (distribution of losses between participants) and uncovered loss taking into account the decision to cover the loss(distribution of loss between participants) - the first is shown as a net loss, the second - in (section “Capital and reserves”).

Retained earnings on the balance sheet are the part of certain profits that remains with the organization after it has paid all mandatory payments.

Definition

Retained earnings on the balance sheet are the portion of certain profits that remains with the organization after it has paid all and other payment obligations.

To assess the company's performance the most important indicator The report shows the profit for a certain period of time.

Based on its positive or negative dynamics, one can understand how effectively the organization operated in a given period of time.

In order to increase productivity, and as a result, the growth of income received, it is necessary to correctly direct funds from retained earnings.

The allocation of these resources is influenced by the decisions of the firm's management. They will be jealous of where the retained earnings will be directed:

• employee bonuses;
• dividend payment;
• increase in the amount of authorized capital;
• increase reserve fund;
• distribution of funds for other purposes aimed at the development of the organization.

Important:retained earnings cannot be accumulated until the organization has completed all monetary obligations for a certain period of time.

The concept of retained earnings closely intersects with the concept of net profit.

However, their difference is that retained earnings are primarily a performance indicator for a period of one calendar year or for the period from the launch of the organization to the present moment.

Net profit necessary to reconcile indicators for the period.

It should be taken into account that retained earnings in the organization are interpreted differently.

The accountant evaluates such profit as the result of the final work for the year and reflects its indicator in the 84th account.

The profit itself is distributed by the owners of the organization in the person of its owners.

The economic meaning of retained earnings will be that its indicators will be considered the next year after the date of its actual calculation and distribution by the accountant, based on the decision of the enterprise management.

Formation process and content

Active-passive account 90 is responsible for sales. It actually reflects all the results of the company’s direct activities, expressed in:

• production and sales of products;
• provision of services.

The debit of the account will reflect the full amount of the cost of manufactured products, the amount calculated, as well as other expenses related to production.

The account credit will contain the full amount of proceeds from the sale of goods. The balance, as a final calculation, is transferred to account 99.

Based on these calculations, the following entry is made

The financial actions of the organization, expressed in activities that are not related to the main one, will be entered into account 91, which is responsible for other income of the company that differs from the main one.

These types of calculations will include:

• selling the company's existing assets;
• leasing of company assets;
• conducting markdowns on assets that are outside the main circulation of funds;
• carrying out additional valuation of assets that are outside the main turnover;
• carrying out external actions with foreign currencies;
• investment Money to other organizations;
• carrying out liquidations of movable or immovable property;
• transfer of movable or immovable property as a gift;

In the above cases, actions will be recorded in the following form:

Similarly, when working with the above accounts, balances are transferred to accounts responsible for unplanned receipts of income or such unplanned receipt of losses.

An example of such income or expense could be the receipt of an insurance payment for a specific case or the loss of any asset on the balance sheet of the enterprise as a result of natural disaster or disaster.

In other words, such income and expenses are not predicted and are of a spontaneous (emergency) nature.

In the same way, the balance is transferred from the account responsible for materials.

For example, it records the price of any types of property or materials received by the organization that are not required for production.

Important:retained earnings can be increased according to the indicators in the reporting, in a situation where the accountant makes a mistake, expressed in an incorrectly inflated expense indicator.

The growth of retained earnings can also be affected by payments in the form of dividends if they are not used by investors within 3 years from the date of their accrual.

Except financial assets, expressed in one form or another, profit can be material.

It is important to understand this when you need to carry out economic analysis on the work of the organization for a selected specific period of time.

At the end of the year, the accountant needs to carry out an operation in the organization’s balance sheet related to writing off the final balance from the main account to account 84.

This action is formalized as follows

After this posting is completed, account 99 from which the funds were written off must be reset, and the first entries on it will appear only at the beginning of next year.

General points and differences from uncovered losses

Both retained earnings and uncovered losses are necessary for conducting and reconciling indicators on the efficiency of the organization.

When preparing accounting documents special distinction No.

In some situations, the differences will be in the net amounts of profit that were paid to the owners of the enterprise or the amount of retained earnings as a whole for the period of time indicated in the financial statements.

Retained earnings, which is a liability on the balance sheet, actually increases the amount of capital in the organization.

This is a reflection of how effectively these funds were invested in the development of production facilities.

With a detailed analysis, it is possible to determine which of the factors became more suitable for obtaining such a profit.

The loss itself in the organization’s balance sheet is always displayed with a minus sign and is enclosed in parentheses.

When it occurs, management needs to conduct a thorough analysis to determine why such a deviation in the direction of profit occurred.

A common reason for such situations is a decrease in the competitiveness of the product on the market or the investment of large amounts of investment in production. Which take a long time to pay off.

How is it calculated

Important indicators that you should know when calculating retained earnings are:

• the amount of retained earnings at the beginning of the year;
• net profit or loss for the year;
• amounts received by the owners.

According to the last point, these amounts can be in the form of dividend payments to shareholders of the enterprise or payments sums of money founders.

Indicators are taken from line 1370 responsible for balance sheet and line 2400 responsible for the financial results report.

The interim payment, which is assigned during the year from the projected profit, must be reflected in the organization’s orders.

If a profit is made for the current year, then it will be calculated using the following formula

If there is only a loss for the current year, then calculation formula will be slightly modified

The first value can also be negative if losses in the current year exceed the calculated amount of profit at the beginning of the year.

If this happens, then such an indicator will be designated as an uncovered loss.

The calculation formula can also be supplemented and modified depending on what form of ownership and type of activity the organization has.

Reflection in reports

This profit must be reflected in the company's capital or in its reserves.

When compiling annual reports, the total amount of profit will be reflected excluding pre-made deductions.

This means that the following were subtracted:

• loss for last year;
• payment on dividends;
• transfers of funds from reserve funds;
• and other items of expenses of the enterprise.

All numerical indicators for the above points may be modified until the management of the organization finally approves them.

Previous year report

• accumulation calculation;
• calculation by year.

In the first option, dividing profits into previous years and the reporting year with the further opening of a separate sub-account, which will relate to account 84, is not required.

Profit is recorded on an accrual basis from the moment the enterprise starts operating.

In the event that losses occur with this form of calculation, they will overlap with the profits that were received in previous years.

This type of calculation is only effective for small organizations.

The main difference between the calculation by year is the presence of a separate sub-account for keeping records of the amounts of profit received for different periods of time.

Subaccount options may vary. For example, such accounts might look like this:

In 2 situations presented in the example, the amounts that were received in previous years will be included in the calculations at the end of the year.

In order to receive detailed information, you need to take the following types of indicators:

• explanatory notes that can go along with the balance sheet of the enterprise;
• accounting entry for account 84;
• reports for previous years.

Attention:If errors are discovered in the calculations of profit or loss for the previous year, information about them will be included in the financial results for the current year.

Report for the current year

If you need to display the profit for the current year in the company’s accounting department, you can open additional accounts for account 84.

An example might look like this:

If a positive result is obtained in the current year, based on the example, the posting will look like this:

Dt 84.1 Kt 84.2

If the posting is applied to an 84.3 account, then this will mean that the profit will be used for various funds.

In any of the accounting options, the closing entry at the end of the reporting year will be noted in the general ledger.

This posting will be an operation to write off funds from account 99 to account 84.

From the amount used must already be deducted, as well as interim payment of dividends and other forms of payments.

Therefore, the following type of wiring is done

Uncovered losses

An additional account 84.4 is opened for the purpose of displaying all losses that arose in the current year.

If a situation arises that the resulting loss cannot be covered with the help of income generated during last year, then the organization’s management takes actions aimed at repaying the loss from other possible sources.

In a situation where this is not possible, the loss remains on the balance sheet.

In such a situation, it will be recognized as not closed. Then it will be transferred to the corresponding field with a negative indicator.

If the calculation of profit by year is used, then data on the loss that was not covered in the current year will be transferred through additional accounts to account 84.

It looks like this

Check procedure

The statement of changes in equity serves as a source where all data regarding profits that were recorded as uncertain are entered.

This also includes records of losses that have not been covered since the beginning of the year.

When preparing annual reports, some small businesses and non-profit firms may not file reports for the current year.

The report on changes in capital itself stores information for the past 3 years of the organization’s activity.

Definition of Negative Profit

In some organizations, this expression is used when losses arose through no fault of the company's own activities.

If an error is discovered, as a result of which a significant amount of debt or an overestimation of the cost of production is determined, then losses may arise even for a sufficiently big companies.

Where to send consumables

According to the decision of the organization's management, the entire amount of retained earnings is directed to the sources chosen by it.

Attention:The accountant does not have the right to independently make decisions on the distribution of profits. The basis for starting the relevant postings will be the act issued by the management of the organization.

Unlike other income accounts, management can dispose of retained earnings quite freely.

However, such an order should not go beyond the scope of the organization’s charter, and also current legislation.

Example typical postings the following actions may occur:

Management cannot make decisions on the distribution of profits if one of them has debts on investments in the authorized capital.

The same rule will apply in situations where:

• the size of the organization's net asset is lower than the size of the authorized capital;
• the size of the organization's net asset is lower than the size or reserve fund;
• in cases where the organization is in bankruptcy proceedings.

With such restrictions, it is prohibited to pay amounts intended for dividends from the company's shares.

Legal entities have the right not to create reserve funds.

This rule applies for joint stock companies, where the size of the fund must be at least 5% of the amount of the authorized capital.

An LLC can create various funds, the purpose of which will be to distribute profits.

To reflect the actions taken on them, it is enough to open additional accounts for the main ones, from which this profit will be distributed.

Joint-stock companies, on the basis of current legislation, can create a fund for the corporatization of employees.

The entire amount will be used only for purchases. valuable papers from their owners. JSC employees also have the right to buy back parts of free shares.

If retained earnings are directed to the development of the organization, then such an action is called self-financing.

A feature of this type of distribution will be considered a fact that is associated with changes in the balance.

Thus, when purchasing additional equipment necessary to modernize production, there will be no decrease in the liability balance sheet.

In this case, the asset will move in the direction of decrease. Such transactions will not affect the company’s capital in any way.

The accountant must display all funds spent on the balance sheet for additional accounts related to account 84.

At the moment when the accumulated income is spent, that is, the balances of account 84 go into debit, it will be noted that further transfer of funds to improve production will be carried out using funds in the organization’s circulation.

Determining sources for covering losses

Liability in capital shows how the amount of losses received decreases.

Since other sections remain unchanged, the accountant has the right to post a write-off of losses using various means.

In practice, transactions for writing off losses are displayed as follows

To increase the company's profit growth, management must make effective decisions on the distribution of incoming profits, based on the analysis and prepared annual reports, or reports for the entire period of the enterprise's activity.

Equity: Retained Earnings

Account 84 of accounting is an active-passive account “Retained earnings (uncovered loss)”, it belongs to section Ⅶ “Capital” of the chart of accounts and usually makes up a significant part of the organization’s capital. Using standard wiring and practical examples Let's look at the specifics of using account 84 and the features of reflecting transactions with retained earnings.

Retained earnings- this is the net profit after tax at the end of the reporting year, received by the organization, but not yet distributed among shareholders in the form of dividends, to replenish capital or to repay uncovered losses.

Accounting account 84 is used for accounting financial result activities of the enterprise for the entire period of its operation, from the moment of registration to liquidation. The account is replenished during the balance sheet reformation, that is, at the end of the reporting year.

Only the owners of the enterprise can dispose of accumulated profits. The decision on the distribution of income or loss is made by its owners, documented in minutes following the results of the general meeting of shareholders or participants.

Account 84 of accounting is active-passive, therefore, the uncovered loss is reflected in the debit, and the amount of net profit is reflected in the credit of the account.

Subaccounts of account 84 of accounting, which are active-passive, are presented below in the figure:

Transfers of funds to special funds, for example, dividends on preferred shares, corporatization, material incentives for employees, and their expenditure can be reflected in additional subaccounts of 84 accounts, but they must be taken into account in the balance sheet in the amount of reserve capital.

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Typical entries for account 84 “Retained earnings (uncovered loss)”

The correspondence of accounts and the main entries for account 84 “Retained earnings (uncovered loss)” are presented in the table:

Dt	CT	Wiring description
99	84.01	Reflection of the amount of net profit based on the final turnover for the reporting year (December)
84.01	75.02/70	Reflection of dividend payments (as of the date of decision making)
84.01	82/80	Net profit attributed to reserve capital/authorized capital
80	84	Reflection of the reduction of the authorized capital to the amount of net assets (as of the date of state registration)
84.02	99	Reflection of the amount of loss based on the final turnover for the reporting year (December)
99	84.03	Reflection total amount retained earnings between shareholders
82/75/80	84.02	Reflection of coverage of losses at the expense of reserve capital (as of the date of the decision)/ own funds founders/authorized capital (after state registration of these changes)
84.03	84.02	Covering the loss with the accumulated amount of retained earnings
84.03	84.04	Reflection of the fact of use of retained earnings when creating property

Examples of transactions with transactions on account 84

Example 1. Payment of dividends and replenishment of the reserve fund

At the end of 2016, JSC Merod received a net profit of 175,300 rubles. On general meeting shareholders decided to distribute it to pay dividends (70%) and replenish the reserve fund (10%).

Table of transactions for account 84 – payment of dividends:

Example 2: Loss Coverage

As of January 2017, Fenkh LLC had reserve capital in the amount of 70,000 rubles, and the loss at the end of 2016 amounted to 130,000 rubles. At the general meeting of the company’s participants, it was decided to cover the loss partly with reserve capital, and partly with their own funds in proportion to the share of the participants in the authorized capital:

• Ottis E.A. – 75%, subaccount 75.01;
• Korev A.I. – 25%, subaccount 75.02.

Table of entries for account 84 – Covering losses using own funds and reserve capital:

Dt	CT	Amount, rub.	Wiring description	A document base
84.02	99	130 000	Reflection of uncovered loss	Income statement
82	84.02	50 000	Repayment of part of the loss using reserve capital	Minutes of the general meeting
75.01	84	60 000	Reflection of debt Ottis E.A.	Accounting information
75.01	84	20 000	Reflection of debt Korev A.I.
51	75	80 000	Reflection of coverage of losses by contributions from owners	Payment order

Line 1370 “Retained earnings (uncovered loss)”

By line 1370 the amount is reflected retained earnings or uncovered loss of the organization:

Interim reporting:

[Account balance 99 “Profits and losses”]

plus/minus

[Account balance 84

minus

[Account balance 84 “Retained earnings (uncovered loss)”]
(in terms of interim dividends accrued in the reporting period)

Annual reporting:

The amount of retained profit (uncovered loss) of the reporting period is equal to the amount of net profit (net loss) of the reporting period, i.e. profit (loss) after tax. Therefore, if the organization does not have retained earnings (uncovered loss) from previous years and the distribution of interim dividends during the reporting period, then the value of line 1370 coincides with the value of line 2400 “Net profit (loss) of the reporting period” of Form No. 2.

In a number of cases, an organization is obliged to make adjustments to balance sheet indicators during the inter-reporting period as of January 1 of the reporting year:

1. Retained earnings (uncovered loss) include the results of revaluation of intangible assets if:

• the amount of depreciation of intangible assets exceeds the amount of its revaluation credited to Extra capital organization as a result of revaluation carried out in previous reporting years;
• intangible assets that were not previously undervalued are discounted;
• intangible assets, which were previously discounted, are revalued and the amount of its writedown carried out in previous reporting years is charged to retained earnings (uncovered loss) in previous reporting years.

2. The amount of retained earnings (uncovered loss) is adjusted when the estimated values ​​of intangible assets (i.e., the residual value of intangible assets) change:

• in case of clarification of the deadline beneficial use NMA;
• in case of clarification of the method of calculating depreciation for intangible assets.

3. Retained earnings (uncovered loss) include the results of revaluation of fixed assets if:

• the asset is revalued, which was previously discounted and the amount of its depreciation carried out in previous reporting periods, attributed to retained earnings (uncovered loss) in previous reporting years;
• the amount of depreciation of an asset exceeds the amount of its revaluation credited to the organization’s additional capital as a result of the revaluation carried out in previous reporting years;
• OS, which was not previously undervalued, is discounted.

4. The amount of retained earnings (uncovered loss) is adjusted for changes accounting policy:

• caused by changes in the legislation of the Russian Federation or regulations on accounting(except when otherwise provided by the relevant legislation or regulation);
• in other cases, changes in accounting policies.

No adjustment is made to retained earnings if the monetary consequences of a change in accounting policy for periods prior to the reporting period cannot be estimated reliably.

5. Retained earnings (uncovered loss) include the results of recalculation of deferred tax assets and liabilities caused by changes in income tax rates in accordance with the legislation of the Russian Federation.