Account 84 Retained earnings (uncovered loss)

How to reflect profit or loss from sales in accounting

Transactions for ordinary activities are recorded on the account. 90 "Sales". Here, revenue, cost, VAT, and excise tax indicators are collected in separate subaccounts. The financial result from this activity will be obtained arithmetically, and the accounting entries will look like this:

• Dt 90.9 Kt 99 - for fixing profits;
• Dt 99 Kt 90.9 - to record losses.

To learn how the cost price is collected, read the publication “What costs does the commercial cost of production include?”

The practical guide to preparing financial statements from ConsultantPlus shows in detail the procedure for reflecting retained earnings in the balance sheet.

Net profit in form 2

PE is shown on page 2400 of the Profit and Loss Statement. It is formed from:

• gross profit/loss, which in turn is defined as the difference between “Revenue” (line 2110) and “Cost of sales” (line 2120);
• commercial (p. 2210) and administrative (p. 2220) costs;
• income from participation in other companies (line 2310), interest receivable (line 2320) and payment (line 2330), other income (line 2340) and expenses (line 2350);
• adjustments to PBU 18/02: current tax (line 2410), deferred taxes (line 2430 and 2450).

See the material on the specifics of entering information into Form 2 “Filling out Form 2 of the balance sheet (sample).”

Where in accounting is information about net profit collected during the year?

To reflect the financial results of the enterprise's activities during the year, an account is used. 99 "Profits and losses." It is to this account that the financial results from sales and other activities are written off. In addition, on the account. 99 hit:

• accrual of conditional income tax;

What is a conditional expense and income tax income and how to correctly display it in accounting, find out in ConsultantPlus. Study the material by getting trial access to the K+ system for free.

• accrual of a single tax under the simplified tax system;
• accrual of a single tax for UTII;

ATTENTION! Starting from 2021, UTII will no longer be valid. Read more here.

• tax sanctions;
• losses associated with extraordinary circumstances;
• income received as a result of emergency circumstances;
• write-off of deferred tax assets and liabilities;
• other income or expense items.

As a result of analyzing the account turnover for the year, you can understand whether the enterprise’s activities were profitable or not. If the debit turnover exceeds the credit turnover of the account. 99, then the organization worked at a loss, and if vice versa, then the year ended with a profit. The balance sheet reformation ends with a record reflecting the financial results of all the organization’s activities for the year:

• Dt 99 Kt 84 - profit accrued;
• Dt 84 Kt 99 - the entry means that the activity for the year was unprofitable.

To better understand the process of generating profit or loss, read about which accounts are active.

What is net profit?

Net profit (hereinafter referred to as NP) is calculated at the end of the year by resetting the totals in the accounting accounts.
This indicator consists of the company's revenues and expenses, adjusted for tax payments. Moreover, if the company’s expenses exceed its income, then a loss is formed. The line-by-line occurrence of emergencies is presented more clearly in the Profit and Loss Statement.

For information on the use of accounting indicators in economic analysis, see the material “Methodology for analyzing the balance sheet of an enterprise.”

Retained earnings and its use in accounting

Retained earnings (uncovered loss) are reflected in the account of the same name. 84. Its debit balance indicates accumulated loss, and its credit balance indicates profit. By decision of the owners of the enterprise, expenses can be made at the expense of the organization’s profits or losses can be repaid from any sources.

The practical guide to preparing financial statements from ConsultantPlus shows in detail the procedure for reflecting retained earnings in the balance sheet. If you do not have access to the K+ system, get a trial online access for free.

Retained earnings can be used for the following expenses:

• payment of dividends - Dt 84 Kt 75 (or Dt 84 Kt 70, if one of the dividend recipients is an employee of the enterprise);
• formation of reserve capital - Dt 84 Kt 82;
• increase in authorized capital - Dt 84 Kt 80.

The loss, by decision of the owners, can be repaid:

• from profit - Dt 84 Kt 84 using the corresponding subaccounts;
• founders' funds - Dt 75 Kt 84;
• reserve capital - Dt 82 Kt 84;
• authorized capital (but with the condition that its amount does not become less than the amount of net assets) - Dt 80 Kt 84;
• additional capital, if there are no other sources - Dt 83 Kt 84.

How to take advantage of net profit?

Having completed the year, the company can decide to distribute profits. Options for this procedure are varied, for example:

• reduction in the amount of losses of previous periods (Kt 84);
• transfer of dividends (Kt 75);
• staff bonuses or material payments (Kt 70);
• replenishment of the Criminal Code (Kt 80);
• formation of various types of funds (Kt 82).

For options for using the state of emergency, see the material Expenses not taken into account for tax purposes in accordance with Art. 270 Tax Code of the Russian Federation.

Results

The results of an enterprise's economic activities are collected on several accounting accounts.
The main thing to remember is that profit is collected on credit, and loss on debit. This means that the debit balance on the account. 99 during the year, as well as the accumulated account balance. 84 speak about the organization’s loss, and credit residual indicators speak about its profit. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Dividend accounting entries

Accounting support for operations related to the distribution of part of the organization’s net profit between the founders is carried out in the following sequence:

• generation of information on the amount of retained net profit;
• adoption of a decision by the general meeting of owners (shareholders) on the amounts and timing of payments;
• accrual of dividends separately for each participant;
• taxation of amounts;
• dividend payment;
• transfer of taxes;
• writing off unclaimed amounts.



Dividends mean part of the net profit of a legal entity (joint stock companies or LLC), which is the income of the founders (shareholders). They are distributed among the participants in proportion to the shares they own in the company.

The frequency of payments and the amount of retained earnings to be paid to the owners are determined at the general meeting of shareholders (founders of the LLC) and are specified in the organization’s charter.

The payment procedure can be changed: adjustments are registered in the company's Charter and registered with the Federal Tax Service. Based on the results of the meeting, a protocol is drawn up, on the basis of which the distribution of income begins.

Payments can be made quarterly, at the end of six months or at the end of the year.

Note from the author! The maximum period for the distribution of net profit between owners is established by law - no more than 60 days from the date of the decision at the general meeting (the date of the minutes); no more than 10 days for payments to nominee shareholders and trustees and no more than 25 days to the remaining shareholders in the JSC.

Accounting for undistributed net profit is carried out on an accrual basis on the account. 84. It is active-passive: debit balance is the presence of an uncovered loss based on the results of the company’s activities, credit balance is part of the net profit subject to subsequent distribution (after payment of all necessary taxes and contributions).

Basic entries for the accrual and payment of dividends

Accounting for dividend payments depends on the status of the founder:

1. The founders of the company are individuals who are employees of the company: mutual settlements on accrued amounts are displayed in the company’s accounting records in correspondence with the account. 70, to which additional accounting can be opened for the distribution of employee payments.
   Dt84 Kt70 – calculation of dividends from the company’s net profit.

   Dt70 Kt50.51 – cash payment or non-cash transfer of funds to the founders.

   Note! Monitoring of amounts collected on the account. 70 is carried out separately for each employee of the organization for an in-depth assessment of mutual settlements with personnel.

2. The founders of the company are individuals who are not employees of the organization and legal entities: accounting of mutual settlements with owners is carried out on the account. 75, to which a separate active-passive sub-account is opened.
   Author's addition! Accounting for mutual settlements on the account. 75 is carried out similarly to the 70 account: data is recorded separately for each participant.

   Dt84 Kt75.02 – accrual of dividends on the basis of the general meeting of shareholders or founders of the LLC.

   Dt75.02 Kt50.51 – payment of accrued amounts.

Taxation of payments

Since dividends represent the income of the founders (individuals and legal entities), these payments are subject to income tax in accordance with current legislation:

1. Founders - individuals: personal income tax 13% for citizens of the Russian Federation and 15% on amounts due to foreign citizens.
2. Founders are legal entities: amounts are subject to income tax of 13% for companies created in Russia and 15% for dividends of foreign companies.

Note! If an organization is the recipient of a portion of its own dividends, the tax base may be reduced when calculating income tax when the total amount allocated for distribution among the company's participants is reduced. The tax base in this case will be calculated as follows: the amount to be issued minus the amount of dividends received.

Based on the protocol for the distribution of net profit between the participants of a legal entity, it is necessary to immediately calculate taxes, since they are transferred no later than the working day following the payment.

Tax accounting is carried out on the account. 68 for the corresponding subaccounts:

1. Dt70 Kt68 – accrual of personal income tax on payments to the founders - employees of the company.
2. Dt75 Kt68 – calculation of taxes for the remaining founders.
3. Dt68 Kt51 – transfer of taxes to the Federal Tax Service of Russia.

Unclaimed amounts

There are situations when a company participant has not received the amount of dividends due to him on time. He has the right to demand payment within 3 subsequent years (the period can be extended to 5 years, if determined by the Charter of the company) from the date of signing the protocol in joint-stock companies or the completion of the 60-day period after the decision is made in limited liability companies.

If the participant has not claimed these amounts within 3-5 years, then they are transferred to the company’s net profit:

Dt70.75 Kt84.

Case Study

Based on the results of 2021, Compass LLC determined the amount of retained net profit: 100 thousand rubles. At the annual meeting of the founders of the company, the following decision was made: to distribute 60 thousand rubles between 3 founders, 20 thousand rubles each, since they have equal shares in the company. Transfer the remaining amount of funds to the reserve fund.

Note! One of the founders is the general director of the company, and an employment contract has been concluded with him.

Accounting entries for transactions:

1. Dt99 Kt84.
   100 thousand rubles - the undistributed part of net profit is displayed.
2. Dt84 Kt75.02.
   20 thousand rubles - dividends were accrued for payment to 1 founder.

   20 thousand rubles - dividends were accrued for payment to the 2nd founder.

3. Dt75.02 Kt68.
   5,200 rubles – personal income tax is charged, which will be withheld.
4. Dt84 Kt70.
   20 thousand rubles. – payment was accrued to the founder - general director of the company.
5. Dt70 Kt68.
   2,600 rubles – personal income tax is charged, which will be withheld.
6. Dt84 Kt82.
   40 thousand rubles – replenishment of the reserve fund from the company’s net profit.
7. Dt75.02 Kt51.
   34,800 rubles - funds were transferred to the founders.
8. Dt70 Kt51.
   17,400 rubles - the CEO's dividends were transferred to his current bank account.
9. Dt68 Kt51.
   7,800 rubles – tax paid to the Federal Tax Service.

Accounting for dividends by the recipient - a legal entity

Dt76 Kt91 – accrual of payments due (posting date – date of decision on distribution of net profit).

Something to keep in mind! The amounts of dividends due must be reflected minus income tax, which will be withheld by the tax agent organization.

Dt51 Kt76 – actual receipt of funds.

Loss from previous years: postings

It happens that after the business owners approve the annual financial statements, an accounting error is discovered that affects the company's final results. For example, the results of a losing transaction were not taken into account in a timely manner, i.e. revenue is unreasonably inflated. It is no longer possible to make the necessary corrections in last year's reporting forms. Therefore, it is necessary to enter clarifying information in the current year, defining it as a loss from previous years.

PBU 10/99 defines losses from previous periods as other expenses if distortions in accounting are considered insignificant. Materiality categories are established by the company independently and are fixed in its accounting policies. If the amount of the loss turns out to be significant (i.e., meets the materiality criteria established by the company’s management), then this fact is recorded in account 84 (PBU 22/2010). Reflects the amount of loss in the month the error was discovered:

In what documents is this amount reflected?

To reflect revenue from the sale of products (performance of work or provision of services) in accounting, it is necessary to have documents that confirm the transfer of property rights to these products to the buyer. Sources of information about the company’s revenue are the following documents:

1. Source documents:
   contracts with clients for the sale of products, services and works;
2. waybills;
3. invoices;
4. invoices for delivery of finished products;
5. requirements for product release;
6. warehouse cards;
7. log of received and issued invoices;
8. sales book;
9. invoices for the sale of finished products, bills of lading, cargo customs declarations;
10. turnover sheets, quantitative and total cards;
11. certificates of services rendered or work performed.
12. Analytical and synthetic accounting registers:
    main book;
13. order magazines No. 10, No. 11 and No. 15;
14. statement No. 16.

Are dividends due to the founder of an LLC: posting, payment, accrual, taxes

When registering an LLC, the founders of this company must be approved, who contribute their own funds or materials, equipment, etc. in shares to the authorized capital.

They are prescribed in the Charter of the enterprise and their percentage is determined. According to this contribution, the share of each founder is determined and the profit received as a result of the activities of the LLC is subsequently distributed.

Are dividends due to the founder of an LLC?

The part of the enterprise's profit that must be paid to the founders is called dividends. In 2021, the owners of the enterprise are required to pay dividends. In order for the founders to be able to receive the profit due to them, they must first determine the amount of this profit.

In this case, it is advisable to pay it once a year, after paying all taxes and fees. Since each enterprise has its own nuances in its work, the profit may be uneven quarterly. That is, in the case when the organization’s profit is seasonal, it is possible to receive both profits and losses in different quarters.

The video below will tell you whether the founder of an LLC is entitled to dividends:

How to pay them

In order to pay the money due to two or more founders of the enterprise, it is necessary to draw up a protocol, which will indicate the amount of net profit that is allocated for payment.

This procedure is established by paragraph 6 of Article 37 No. 14-FZ and Article No. 208-FZ.

The law does not establish a special sample protocol, so each organization has the right to develop it independently.

But despite this, the protocol must reflect the following information:

• The period for which the farm's profit will be distributed;
• The amount of profit to be distributed among the founders;
• How the profit will be distributed according to the invested funds;
• Dividend payment terms;
• Methods of issuing profits.

In the case where the organization has only one founder, dividends can be paid without a protocol. Here, Article 39 No. 14-FZ, paragraph 3 of Article No. 208-FZ is included in the work, which allows for independent signing of a decision on the issuance of financial profit.

Step by step procedure

Since the issuance of dividends is not mandatory for the organization, it has the right to independently decide on their payment.

The law does not prohibit making additions and changes to the Charter on the ratio of payments in proportion to the invested funds.

Therefore, most often, company management convenes a general meeting of founders at which a decision on payments is made. At the meeting, a report from the accounting department on the financial situation of the organization is heard.

In addition, accounting documentation and reports must be submitted.

1. The general meeting determines the timing of dividend payments and the procedure for distributing profits among the founders.
2. After the meeting, the management of the LLC issues an order setting out the essence of the meeting.

By law, dividends must be paid within two months from the date of the decision on payment by the general meeting. If other deadlines were approved, this must be enshrined in the charter.

The payment of dividends to the sole founder of the LLC is described in this video:

Taxation

After the due dividends have been accrued to their legal owners, it will be necessary to withhold personal income tax in favor of the budget. The tax should be:

• accrued at a rate of 13% for taxpayers permanently residing in Russia,
• and at a rate of 15% for all non-residents.

The deadlines for paying personal income tax to the budget are established by law and oblige them to be deducted no later than the next day after the payment of dividends. After taxes have been entered into the budget, the data should be recorded in the quarterly and annual reports (6-NDFL and 2-NDFL).

Accounting entries

Let's consider the situation when dividends are accrued to the founders, what the payers' postings look like:

• D 84 – K 75 – for individuals and legal entities not connected by labor relations with the organization paying them money;
• D 84 – K 70 – for individuals working in an enterprise that pays them dividends;

Calculation of tax subject to withholding on dividends:

• D 75 – K 68 – for legal entities and individuals not working in the organization;
• D 70 – K 68 – for individuals working in an organization.

Dividend payment:

• D 75 – K 51(50) – legal entities and individuals who are not connected by labor relations with the organization paying dividends;
• D 70 – K 51(50) – to individuals who officially take part in the labor activities of the dividend payer’s organization.

Payment of taxes:

• D 68 – K 51 – you need to make a detailed posting for taxes.

After this, you need to write off unpaid and unreceived dividends for previous years to profit:

• D 75 – K 84 – those that were previously taken into account in account 75;
• D 70 – K 84 – respectively, listed on account 70.

And now, accordingly, you should look at what entries are used when calculating dividends from their recipients.

• When a decision is made to pay dividends in accounting, this is reflected by entries D 76 - K 91
• When dividends have already been received by the founders, this is recorded as D 51 - K 76.

Important! For tax accounting, the payment of dividends is recorded based on the actual date of their payment.

Alimony from dividends

• If the founder of an LLC is one person, then he can independently decide whether to receive dividends or not. In the event that a decision is made to receive funds, he is obliged to pay alimony from the money received.
• But if he does not decide to pay dividends to himself, then, accordingly, he will not receive any profit, and, therefore, there is nothing to pay alimony from.
• If a citizen is registered as an individual entrepreneur, then all profits are considered personal income of the individual entrepreneur. Accordingly, alimony is calculated for this amount.
• If the founder is a person who simply invested free funds in the company as shares, this is also considered a source of income. It doesn’t matter whether a citizen is an employee of this organization or not, alimony must be collected from all income received.

How to calculate accruals

You can consider the issue of calculating dividends using a specific example. Let's take the organization StroyServis LLC. Over the past reporting year, the organization earned a profit of 216,400 rubles, which can be distributed among participants according to their share in the authorized capital.

1. A.I. Soloviev has a 40% stake in the management company. RUB 86,400 was credited.
2. A.L. Olezhko has a 27% stake in the management company. RUB 58,428 accrued.
3. D.V. The final share in the management company is 20%. RUR 43,299.8 accrued.
4. WELL. Beregovaya – share in the management company 13%. RUB 28,132 accrued.

We calculate personal income tax using the formula: personal income tax = PR start. x%, where PR start. this is the amount of dividends accrued to the shareholder. After calculating and deducting taxes, you can see the final picture of the funds received in your hands:

1. A.I. Soloviev - 86,400 rubles accrued. Personal income tax deducted 13% - 11,232 rubles. Total to be issued – RUB 75,168;
2. A.L. Olezhko - 58,428 rubles accrued. Personal income tax deducted - 13% in the amount of 7595.6 rubles. Total for issue – 50,832.4 rubles;
3. D.V. Nakonechnaya - 43,299.8 rubles accrued. 13% tax has been deducted in the amount of RUB 5,629. To be issued 37,670.8 rubles;
4. WELL. Beregovaya - 28,132 rubles accrued. Taxes deducted 13% in the amount of 3657.2 rubles. Total for issue – 24,474.8 rubles.

Important! If you were given dividends in full along with taxes, you must immediately pay them yourself to the state budget. This must be done no later than the next day after the citizen received the funds. This obligation is fixed in Articles 226 and 287 of the Tax Code of the Russian Federation. Otherwise, you can part with a larger amount.

The calculation of dividends to founders in 1C is described in the video below:

Other uses of the account

Also, account 99 is used to reflect losses/surpluses of fixed assets and inventory items received under force majeure circumstances (natural disasters, accidents, nationalization, etc.):

Account 99 reflects the amounts of losses/surpluses of funds identified in emergency circumstances on current accounts and in the cash register:

Accounting for unproductive expenses and losses

This same group of expenses includes the costs of repaying long-term bank loans and interest on them. In the process of analysis, it is necessary to study the dynamics of the share of profit that goes to the payment of dividends to shareholders of the enterprise, self-financing of the enterprise (reinvested profit), social fund, material incentives for employees, and such indicators as the amount of self-financing and the amount of capital investments per employee, the amount of wages and payments per employee. Moreover, these indicators must be studied in close connection with the level of profitability, the amount of profit per employee, per ruble of fixed production assets. If these indicators are higher than at other enterprises or higher than the normative ones for a given industry, then there are prospects for the development of the enterprise. High debt on short-term loans also means large amounts of interest paid to commercial banks.

Step-by-step instructions for recording in accounting

When reflecting revenue in accounting, the following entry is used: D 62 K 90.1 – revenue from the sale of finished products is reflected, the products are shipped to the buyer (work is performed or services are provided).

Simultaneously with this operation, the cost of production is written off. If an organization accounts for finished products at actual cost, then the write-off is reflected by the following entries: D 90.2 K 43 - products written off at actual cost .

If an organization keeps records of finished products at planned (standard) cost, then the write-off is reflected in accounting in the following way:

• D 43 K 40 – finished products are accepted for accounting at planned cost.
• D 90.2 K 43 – finished products are written off at planned cost.
• D 40 K 20 – actual cost is reflected (at the end of the month).
• D 90.2 K 40 – deviations of actual from standard costs (overexpenditure) are written off.
• D 90.2 K 40 – reversal: deviations of actual and standard costs are written off (savings).
  Important! The cost of services provided or work performed is not reflected in account 43 “Finished products”, and the actual costs for them are written off to account 90 “Sales” from the production cost accounts.
• D 90.2 K 20 – costs for services/work are written off.

6.5.1. expenses from net profit

Attention

In the first case, the net profit received is used to create (replenish) special funds, the formation of which is provided for by the constituent documents or the decision of the founders for the coming year. Such special funds formed from net profit include accumulation funds, social sector fund, consumption fund and other similar funds for production development, social development of the team, material incentives). The special funds formed (replenished) at the expense of net profit (debit of subaccount 81-2, credit of account 88 for the corresponding subaccounts) subsequently serve as a source of financing for activities carried out at the expense of net profit, since they represent distributed net profit (debit of account 88, credit accounts 46, 47, 48, 50, 51, 52, 56, 60, 67, 68, 69, 70, 71, 76, 90, 92, 94, 95) depending on the nature of the expenses.

Determining the financial result for account 99 using an example

Based on the results of August 2015, Comfort LLC:

• goods sold for the amount of RUB 2,342,000, VAT RUB 357,254;
• cost of goods sold—RUB 1,052,000;
• warehouse, administrative, and transportation costs amounted to RUB 841,000.

The balance sheet of Comfort LLC as of 31..2015 contains the following information:

Closing the period, the accountant of Comfort LLC made entries to close account 99: