How to close 99. Determining financial results and closing the year. What is the financial result

The reformation of the balance sheet at the end of the year consists in closing the accounts, which during this period reflected the financial performance of the enterprise. This procedure begins after all business transactions are recorded in the documentation. Let us consider further how the balance sheet reformation is accounted for.

General information

The reformation of the balance sheet includes zeroing the balance of all sub-accounts open to the account. 90 and 91. During the procedure, the account is also closed. 99. The resulting losses or profits during the reformation of the balance sheet are transferred to account 84. As a result, the company starts a new period anew. At the beginning of the year, the company's accounts for accounting for financial results and sub-accounts opened for them were reset to zero. The procedure is formalized by the closing entries dated December 31 of the reporting period.

Closing accounts 90 and 91

Throughout the year, the "Sales" account records the company's income and expenses for ordinary activities. sch. 91, respectively, reflects the remaining costs and receipts. These accounts are closed every month. This is indicated in the Instructions for the use of the Chart of Accounts. At the end of each month, therefore, one should compare the credit and debit turnovers on the sub-accounts of the account. 90 and establish the financial result from the implementation for the reporting period.

The revealed result is deducted from the subaccount. 90.9 per account 99. Similarly, throughout the reporting year, the account is closed. 91. When comparing the debit turnover on the subaccount. 91.2 and a loan for subaccounts. 91.1 is determined by the balance of other income and expenses. The result obtained at the end of the month is deducted from the subaccount. 91.9 on account 99.

Balance reformation: postings

When identifying income from sales or other activities, the following entry is made: Db 90.9 (91.9) Cd 99 - write-off of the amount of income received per month.

If losses are detected, then the entry will be as follows: write-off of the loss received during the month.

As a result, at the end of each month, a zero balance is formed on accounts 90 and 91. It should be remembered that the balances continue to be stored on sub-accounts. They accumulate during the year and are reset by the reformation. Thus, this procedure consists in zeroing sub-accounts. Articles to the account 90 are closed by internal entries on the subaccount. 90.9, and sub-accounts of account 91 - according to sub-accounts. 91.9. When the balance sheet is reformed, the postings will be as follows:

Db 90.1 Cd 90.9 - closing a sub-account for accounting for sales proceeds.

dB 90.9 Cd 90.2 - closing subaccount. at cost of sales (excise taxes, VAT).

Db 91.1 Kd 91.9 - closing a sub-account for other income.

Db 91.1 Cd 91.2 - closing subaccount. accounting for other expenses.

sch. 99

The "Profit and Loss" account is used to form the final financial indicator of the enterprise's activities for the entire reporting period. During this time, it reflects income and losses from ordinary types of activities, the balance of other expenses / income. In addition, c. 99 fixes penalties and fines for fees and taxes, the amount of calculated income tax and its recalculations.

Important point

If an enterprise uses PBU 18/02, it cannot reflect the accrual of income tax with an entry on Db account. 99 and Kd sc. 68. To calculate the amount of the mandatory contribution of such a company, the conditional income/expense should be adjusted. At the same time, in accordance with clause 20 of PBU, this indicator must be taken into account as a separate sub-account to the account of losses and receipts. It follows from this that such a company additionally according to the account. 99 reflects the amounts of calculated contingent income tax expense/income and tax (permanent) liabilities/assets.

Account closing 99

Unlike sch. 90 and 91, this account is not reset throughout the year. The balance formed on it reflects the interim results of the financial and economic work of the enterprise. When a balance sheet is reformed, the debit and credit turnover of the account is compared. 99. Kd balance reflects net income. The debit balance will show that the company has received a loss.

When reforming the balance sheet. 99, according to the Instruction, is closed by the final entry of December 31. The amount of net income received is transferred to Kd account. 84. In case of formation of a loss following the results of the period, it is attributed to Db account. 84. Thus, the entry will be as follows: Db 99 Cd 84, subsch. "Undistributed income of the reporting period" - write-off of the net (retained) profit of the year.

Or: db 84, subsch. "Uncovered losses of the reporting period", Kd 99 - reflects the uncovered loss for the reporting year.

As a result, the balance 99 will be reset. At the same time, sub-accounts are also opened for this account. Let's see what to do with them.

Sub-accounts of account 99

The instruction does not contain indications that when the balance sheet is being reformed, these sub-accounts must be closed. However, experts recommend doing with the account. 99 in the same way as with accounts 90 and 91. In other words, when the balance sheet is being reformed, it is advisable to open an additional subaccount. 99.9. It will reflect the final financial result - net income or losses for the reporting period to be transferred to the account. 84. At the end of the year, all sub-accounts that were opened to the account. 99 are closed by means of internal records. They are made, respectively, on subsch. 99.9.

Note

Opening sub-accounts to the account. 99, one should be guided by indicators f. No. 2. This means that, if necessary, you can generate articles of several orders. For example, to subsch. 99.1 it is advisable to open at least two more:

Multilevel analytical system

If it is provided for at the enterprise, then the reformation of the balance according to the account. 99 is being implemented in stages. In the case of the formation of sub-accounts of the second order, the balances from them are transferred through internal records to the corresponding article of the first order. After that, the balance formed on the first sub-accounts is written off to the account. 99.9. And only then the net loss or income for the reporting period is transferred to dB or Kd sc. 84. The enterprise must approve the work plan for the accounts in its accounting policy.

Distribution of net income

The decision to direct profits for certain purposes is made in LLC at a general meeting of participants (in JSCs - shareholders). Usually, the net income received at the end of the period is distributed to the payment of dividends and replenishment of the reserve.

If there are uncovered losses of previous years, by decision at the general meeting, the proceeds can be used to pay them off. In any case, before the meeting, the accountant is not entitled to make any entries. As an exception, there are cases when the company's charter contains a specific indication of where net income should be directed, and a fixed amount of deductions is also established. In these situations, the accountant, without waiting for the decision of the meeting, reflects in the reporting the appropriate distribution of amounts and informs the participants of the company about this.

Dividend payment

If part of the income is directed to these purposes, the entries will be as follows:

DB 84, subaccount. "Retained earnings of the reporting period", Kd 70 - shows the debt to pay dividends to shareholders (participants) who are employees of the company.

DB 84, subaccount. "Retained earnings of the year", Kd 75.2 "Calculation on the payment of profit" - reflects the debt on the payment of dividends to other participants (shareholders).

It should be noted that payments on certain types of preferred shares can also be made at the expense of special JSC funds that were previously formed specifically for these purposes.

When should dividends be recorded?

The announcement of payments based on the annual result of the company's activities refers to events after the balance sheet date. This is indicated in PBU 7/98 (clause 3). If the event occurred after the final date, information about it is disclosed in the notes to the balance sheet and reporting documentation on losses and receipts. But during the reporting period, no entries need to be made. Dividend payment transactions are recorded only when the meeting of shareholders takes place and a decision is made on the appropriate distribution of the amounts.

Account 99 in accounting is maintained by sub-accounts, depending on the calculations of profit and loss:

• balances on accounts 90 and 91 form the financial result on account 99;
• income tax from account 68.04 is closed to account 99;
• temporary and permanent differences form a conditional income/expense;
• the reformation of the balance sheet closes account 99 for retained earnings (uncovered loss) on account 84.

 

Account 99 "Profit and Loss" is characterized as accumulative for positive and negative financial results of economic activity of enterprises.

How is the structure formed?

In accounting, account 99 refers to active-passive, since on a loan you can see generalized information about the profits received, on a debit - all losses incurred as a result of reflected expenses.

Profits and losses are generated by:

• 90 "Sales" - used by companies to reflect income and expenses from the sale of core activities;
• 91 “Other income and expenses” - it accumulates income and expenses from other activities;
• conditional income/expense from the application of the tax is accrued;
• penalties are reflected.

Permanent and deferred tax liabilities and assets take an active part in the formation of the results.

Important point! Score 99 is synthetic. Analytical accounting should be kept without fine detail, grouping the information necessary to generate a report on financial results.

Sub-accounts on which information is collected:

1. 99.01 "Profits and losses from economic activities."
2. 99.02 "Income tax".
3. 99.07 "Other profits and losses".
4. 99.09 "Net profit/loss".

In turn, sub-accounts are subdivided into smaller groups. So, 99.02 is formed as a result of movements:

• 99.02.01 "Contingent income tax expense";
• 99.02.02 "Conditional income from income tax";
• 99.02.03 "Permanent tax liability (asset)";
• 99.02.04 "Recalculation of deferred tax assets and liabilities".

Transfer of income and expenses

Account 99 is an indicator of the final financial result from the company's activities, whether it will be negative or positive, depends on the movements in accounts 90 and 91.

Accounts 90 and 91, according to accounting rules, must be closed monthly, that is, the balance is reset to zero. They are closed with the help of correspondence from 99 accounts.

Account 99 example

The company receives income from the rental of premises. Acts and invoices for rent must be issued on the last day of the month, which is confirmed by the letter of the Department of Tax and Customs Policy of the Ministry of Finance of Russia dated June 5, 2018 No. 03-07-09 / 38397.

Therefore, the revenue is finally formed at the end of the month and must be closed immediately to reset the balances to zero. Recordings are being made:

• Dt 62.01 “Settlements with buyers and customers” Kt 90.01 “Revenue” - rent in the amount of 5,000,000 rubles was accrued;
• Dt 90.03 "Value Added Tax" Kt 68.02 "Value Added Tax" - VAT payable in the amount of 18% of the amount of revenue of 762,711.86 rubles is charged;
• Dt 90.02 "Cost" Kt 20 "Main production" - the cost of rent is reduced from the costs incurred in the amount of 3,200,000 rubles.

When comparing the results in the reporting period on sub-account 90.01, a positive credit balance is obtained in the amount of 1,037,288.14 rubles. Account closing posting:

• Dt 90.01 Kt 99.01 in the amount of 1,037,288.14 rubles profit was received from the sale of services.

If the result was a loss, it should be closed to debit 99 of the account.

How is income tax reflected?

In addition to sales, the necessary influence on the formation of 99 accounts is exerted by income tax. Unlike accounting, tax accounting may or may not accept certain incomes and expenses for taxation purposes. Differences between accounts are called permanent and temporary.

Reference! The differences form deferred tax assets (DTA) or deferred tax liabilities (DLT) depending on who remains in debt as a result of the firm's operation.

If the company's debt to the IFTS is obtained, then ITs begin to arrive, which are recorded on account 77 "Deferred tax liabilities".

The debt of the IFTS to the enterprise obtained as a result of calculations is designed to ensure the reduction of IT. They are recorded on account 09 "Deferred tax assets".

Accounts 09 and 77 correspond with 68.04 " Profit tax", Which must be closed monthly on account 99. In this way, income tax is accrued in accounting and transferred to account 99 for reflection in the income statement. Posting plan:

• Dt 68.04 Kt 77 - tax with IT has been assessed;
• Dt 99 Kt 68.04 - the conditional income tax expense was reduced;
• Dt 09 Kt 68.04 - there was a loss with IT;
• Kt 68.04 Dt 99 - conditional income from the company's losses is accrued.

Why reset the profit and loss totals in accounting?

After all the numbers fall on the 99th account, you need to close it. Regardless of other accounts involved in the formation, account 99 will be reset to zero during the annual balance reformation. All data of the organization with the help of this routine operation will be reflected in the account "Retained earnings (uncovered loss)":

• Dt 99 Kt 84 - net profit received;
• Dt 84 Kt 99 - there was a current loss.

The purpose of operations on account 99 is the plan of the enterprise to see the end of their labors to make a profit. For reporting, it can be used when reconciling with Form No. 2.

Important point! Account 99 in the balance sheet after closing at 84, the result is reflected in special line 1370 in section III "Capital and reserves" of the liability. By subtracting this line from the other lines of the section, a very significant indicator for organizations of any sphere is obtained - net assets, by which one can judge financial stability.

The legal status depends on the current fiscal policy, as the Tax Code is constantly being amended.

20 Mar 2010 10:37

The reformation of the balance sheet consists in closing the accounts that reflected the financial results of the company during the year. It includes zeroing the balance of all sub-accounts opened to accounts 90 "Sales" and 91 "Other income and expenses", and closing account 99 "Profits and losses".

As a result, the revealed amount of net profit or loss for the past year is transferred to account 84 "Retained earnings (uncovered loss)". Thus, the organization starts the new financial year, as it were, from scratch - with zero balances on the accounts for recording financial results and sub-accounts opened for them.

The reformation of the balance sheet is carried out at the end of the reporting year, after all business transactions for the year are reflected in the accounting records of the company. In accounting, it is drawn up by the final entries dated December 31 of the reporting year.

Step 1. Close accounts 90 "Sales" and 91 "Other income and expenses"

During the year, account 90 takes into account the income and expenses of the organization for ordinary activities, and account 91 - other income and expenses.

Note. Income from ordinary activities is the proceeds from the sale of products and goods, as well as receipts related to the performance of work and the provision of services (clause 5 of PBU 9/99).

Note. Expenses for ordinary activities are expenses associated with the manufacture and sale of products, the purchase and sale of goods, the performance of work, the provision of services (clause 5 of PBU 10/99).

Accounts 90 and 91 must be closed monthly. This is stated in the Instructions for the Application of the Chart of Accounts for Accounting for the Financial and Economic Activities of Organizations (hereinafter referred to as the Instruction). That is, at the end of each month, it is necessary to compare the debit and credit turnovers on the sub-accounts of account 90 "Sales" and determine the financial result from sales for the reporting month. The result obtained by the final turnover for the month is debited from sub-account 90-9 "Profit/loss from sales" to account 99 "Profit and loss".

Similarly, during the year, account 91 "Other income and expenses" is also closed. Comparing the debit turnover on subaccount 91-2 "Other expenses" and the credit turnover on subaccount 91-1 "Other income", the accountant determines the balance of other income and expenses on a monthly basis. The revealed result (profit or loss) at the end of the month is debited from sub-account 91-9 "Balance of other income and expenses" to account 99.

Reference. What about other income and expenses?

In accordance with paragraph 7 of PBU 9/99 and paragraph 11 of PBU 10/99, other income and expenses are income and expenses related to:

With the provision for a fee for temporary use or temporary possession and use of the organization's assets (if this is not the subject of the company's activities);

Granting for a fee the rights arising from patents for inventions, industrial designs and other types of intellectual property (if this is not the subject of the company's activities);

Sale, disposal and other write-off of fixed assets and other assets other than cash (except for foreign currency), products, goods;

Participation in the authorized capital of other organizations (if this is not the subject of the company's activities).

In addition, other income (expenses) includes:

Fines, penalties, forfeits received (paid) for violation of the terms of contracts;

Receipts in compensation for losses caused to the organization (expenses for compensation for losses caused by the organization);

Profits (losses) of previous years, identified (recognized) in the reporting year;

Interest received for the provision of the organization's funds for use (paid by the organization for the receipt of funds, credits, loans for use);

Amounts of accounts payable and depositor (receivable) indebtedness for which the limitation period has expired;

Receipts (expenses) arising as a consequence of emergency circumstances of economic activity (natural disaster, fire, accident, nationalization, etc.);

Amounts of revaluation (markdown) of assets;

Exchange differences;

Other income and expenses.

Other income is also recognized as assets received free of charge, profit from joint activities (profit received by the organization under a simple partnership agreement), as well as interest for the bank's use of funds held on the organization's account with this bank.

Other items include expenses on payment for the services of credit institutions, contributions to valuation reserves and funds directed to charity, sports, cultural and other similar events.

If profit from sales or other activities is revealed, an entry is made in accounting:

Debit 90-9 (91-9) Credit 99

Written off the amount of profit received per month.

In the event of a loss, the posting looks like this:

Debit 99 Credit 90-9 (91-9)

Written off the amount of loss received per month.

Thus, at the end of each month, accounts 90 and 91 have a zero balance. However, the sub-accounts of these accounts continue to have balances that accumulate throughout the reporting year and are reset only through the reformation of the balance sheet as of December 31.

Note. Postings for the closure of accounts 90 and 91 must also be made at the end of December of the reporting year.

In other words, the reformation of accounts 90 and 91, carried out at the end of the year, just consists in zeroing the balances of all sub-accounts open to them. Sub-accounts to account 90 are closed by internal entries to sub-account 90-9 "Profit / loss from sales", and sub-accounts to account 91 - to sub-account 91-9 "Balance of other income and expenses". At the same time, the following entries are made in accounting as of December 31 of the reporting year:

Debit 90-1 "Revenue" Credit 90-9 "Profit / loss on sales"

Closed sub-account for accounting of sales proceeds;

Debit 90-9 "Profit / loss on sales" Credit 90-2 "Cost of sales" (90-3 "VAT", 90-4 "Excises")

A sub-account for accounting for the cost of sales (VAT, excises) was closed;

Debit 91-1 "Other income" Credit 91-9 "Balance of other income and expenses"

A sub-account for accounting for other income was closed;

Debit 91-9 "Balance of other income and expenses" Credit 91-2 "Other expenses"

The sub-account for other expenses was closed.

Example 1. LLC "Reformation" is engaged in the wholesale trade in food products. During 2008, the organization received proceeds from the sale of goods in the amount of 9,440,000 rubles. (including VAT - 1,440,000 rubles). The cost of goods sold amounted to 4,500,000 rubles, general business expenses and sales expenses - 1,700,000 rubles. The amount of other income (balance on subaccount 91-1) for 2008 is 220,000 rubles, other expenses (balance on subaccount 91-2) - 320,000 rubles. The balances on the sub-accounts of accounts 90 and 91 as of December 31, 2008 are presented in Table. 1.

Table 1. A fragment of the balance sheet of Reformation LLC for 2008

		balance at the end of period
	Name
	Cost of sales
	Profit/loss on sales
	Other income and expenses
	Other income
	other expenses
	Balance of other income and expenses

According to the results of 2008, the organization received a profit from sales in the amount of 1,800,000 rubles. (9,440,000 rubles - 1,440,000 rubles - 4,500,000 rubles - 1,700,000 rubles) and a loss from other activities - 100,000 rubles. (320,000 rubles - 220,000 rubles).

With final entries dated December 31, 2008, Reformatsiya LLC closes sub-accounts opened for accounts 90 and 91:

Debit 90-1 Credit 90-9

RUB 9,440,000 - the sub-account for accounting of sales proceeds is closed;

Debit 90-9 Credit 90-2

RUB 6,200,000 (4,500,000 rubles + 1,700,000 rubles) - a sub-account for accounting for the cost of sales was closed;

Debit 90-9 Credit 90-3

RUB 1,440,000 - closed sub-account for VAT;

Debit 91-1 Credit 91-9

220 000 rub. - the sub-account for accounting of other income is closed;

Debit 91-9 Credit 91-2

320 000 rub. - closed sub-account for other expenses.

Step 2. Close account 99 "Profit and Loss"

Account 99 "Profits and losses" is intended for the formation of the final financial result from the work of the organization in the reporting year. During the year, it reflects profits or losses from ordinary activities and the balance of other income and expenses (in correspondence with accounts 90 and 91, respectively). In addition, fines and penalties on taxes and fees, as well as the amount of accrued income tax and recalculations on it are taken into account on account 99.

At the same time, if an organization applies PBU 18/02, it cannot reflect the accrual of income tax by making an entry on the debit of account 99 and the credit of account 68. To determine the amount of tax, such a company must adjust the conditional expense (income) for tax on profit. Moreover, according to paragraph 20 of PBU 18/02, the conditional expense (income) for income tax should be accounted for on a separate sub-account opened to the profit and loss account. Consequently, organizations applying RAS 18/02 additionally reflect on account 99 the amounts of accrued conditional income tax expense (income) and permanent tax liabilities (assets).

Note. The conditional expense (conditional income) for income tax is determined as the product of accounting profit (loss) for the reporting period and the income tax rate (clause 20 PBU 18/02).

Note. A permanent tax liability (asset) is understood as the amount of tax that leads to an increase (decrease) in tax payments for income tax in the reporting period (clause 7 PBU 18/02).

Unlike accounts 90 and 91, account 99 does not close during the year. The balance formed on it shows the intermediate results of the financial and economic activities of the organization.

At the end of the reporting year, it is necessary to compare the debit and credit turnover on account 99. The credit balance on account 99 reflects net profit, and the debit balance means that the organization received a loss at the end of the reporting year.

In accordance with the Instruction, account 99 is closed with a closing entry dated December 31, and the amount of net profit received is transferred to the credit of account 84 "Retained earnings (uncovered loss)". If, based on the results of the organization’s work for the year, a loss is generated, its amount is debited to the debit of account 84. That is, you need to make one of the following entries:

Debit 99 Credit 84, sub-account "Retained earnings of the reporting year",

Written off net (undistributed) profit of the reporting year;

Debit 84, sub-account "Uncovered loss of the reporting year", Credit 99

The uncovered loss of the reporting year is reflected.

Thus, the balance on account 99 becomes zero. But after all, sub-accounts are also opened for account 99. What to do with them?

The Instruction does not say anything about the need to close sub-accounts opened for account 99. Despite this, it is advisable to reform account 99 according to the same rules as account 90 or 91. In other words, we recommend introducing an additional sub-account 99-9 "Balance" to account 99 profit and loss". It will form the final financial result - net profit or loss for the reporting year, which at the end of the year is subject to transfer to account 84. At the end of the reporting year, all subaccounts opened to account 99 are closed by internal entries to subaccount 99-9. Such postings for zeroing sub-accounts are dated December 31 of the reporting year.

Note. The construction of analytical accounting for account 99 should ensure the formation of the data necessary for compiling a profit and loss statement (section VIII of the Instruction).

Recall that when opening sub-accounts to account 99, you need to focus on the composition of the indicators of Form N 2 "Profit and Loss Statement". That is, if necessary, to account 99, you can open sub-accounts of several orders. For example, to subaccount 99-1 "Profit/loss before taxation" (subaccount of the 1st order), it is advisable to provide at least two more subaccounts of the 2nd order, namely:

Sub-account 99-1-1 "Profit / loss from sales";

Sub-account 99-1-2 "Balance of other income and expenses".

If there is a multi-level analytics on account 99, the reformation of this account is carried out in stages. If subaccounts of the 2nd order are opened, the balances on them are transferred by internal records to the corresponding subaccount of the 1st order. Then the balance formed on sub-accounts of the 1st order is written off to sub-account 99-9. Only after that, the balance formed on subaccount 99-9 (net profit or loss for the reporting year) is transferred to the debit or credit of account 84.

Note. The working chart of accounting accounts, including synthetic and analytical accounts (sub-accounts), the organization approves as part of the accounting policy (clause 3, article 6 of the Federal Law of November 21, 1996 N 129-FZ).

Example 2. Let's use the condition of example 1. Let's say Reformation LLC applied PBU 18/02 in 2008. Balances on sub-accounts opened by the organization to account 99, as of the end of 2008, are given in Table. 2.

Table 2

		balance at the end of period
	Name
	Profit and loss
	Profit/loss up to taxation
	Profit/loss on sales
	The balance of other income and expenses
	income tax
	Conditional expense/income per income tax
	Permanent tax liabilities (assets)
	Tax sanctions
	Profit and loss balance

In accounting, LLC "Reformation" closes the sub-accounts of the account with 99 entries dated December 31, 2008:

Debit 99-1-1 Credit 99-1

RUB 1,800,000 - closed sub-account 99-1-1 for profit / loss from sales;

Debit 99-1 Credit 99-1-2

100 000 rub. - closed sub-account 99-1-2 for profit/loss from other activities;

Debit 99-1 Credit 99-9

RUB 1,700,000 (1,800,000 rubles - 100,000 rubles) - subaccount 99-1 was closed for accounting for profit / loss before tax;

Debit 99-2 Credit 99-2-1

408 000 rub. - closed sub-account 99-2-1 for recording conditional income/expenditure for income tax;

Debit 99-2 Credit 99-2-2

12 000 rub. - closed sub-account 99-2-2 for recording permanent tax liabilities (assets);

Debit 99-9 Credit 99-2

420 000 rub. (408,000 rubles + 12,000 rubles) - subaccount 99-2 was closed for accounting accruals for income tax;

Debit 99-9 Credit 99-3

1000 rub. - sub-account 99-3 for tax sanctions was closed.

After all subaccounts of the 2nd and 1st orders are closed, the organization compares the debit and credit turnover on subaccount 99-9. The debit turnover on this sub-account amounted to 421,000 rubles. (420,000 rubles + 1,000 rubles), credit - 1,700,000 rubles. The credit balance for subaccount 99-9 is 1,279,000 rubles. (1,700,000 rubles - 421,000 rubles). This means that according to the results of 2008, LLC "Reformation" received a profit in the amount of 1,279,000 rubles.

With the final entry dated December 31, 2008, the organization closes subaccount 99-9 and transfers the net profit of the reporting year to the credit of account 84:

Debit 99-9 Credit 84, sub-account "Retained earnings of the reporting year",

RUB 1,279,000 - written off net profit for 2008.

Step 3. We reflect the distribution of net profit

In a limited liability company, only the general meeting of its participants has the right to decide on the direction of the net profit of the organization for certain purposes, and in a joint-stock company - the general meeting of shareholders. The fact is that the decision on this issue belongs to the exclusive competence of the general meeting of participants (shareholders) of the company. The basis - paragraphs. 3 p. 3 art. 91 and paras. 4 p. 1 art. 103 of the Civil Code of the Russian Federation.

As a rule, the net profit received according to the results of the financial year is directed to the payment of dividends to the participants or shareholders of the company and to replenish the reserve fund. If the organization has uncovered losses of previous years, by decision of the participants (shareholders) of the company, the net profit of the reporting year can be used to pay off such losses. However, prior to the annual meeting of participants (shareholders) of the company, the accountant is not entitled to make any postings on the distribution of net profit in accounting. For example, if there are losses of previous years and profits of the reporting year, he does not have the right to offset these indicators.

An exception to this rule are cases when the goals for which net profit should be directed and a fixed amount (in percentage terms or in the form of a certain amount) of deductions for them are indicated directly in the charter of the company. Then, without waiting for the appropriate decision of the general meeting of participants (shareholders), the accountant records the distribution of net profit for such purposes: annual deductions to the reserve fund or partial repayment of losses from previous years. Naturally, it is necessary to inform the participants (shareholders) of the company about the fact of distribution of profits and specific amounts of deductions before the annual meeting.

Note. The procedure for distributing net profit can be prescribed directly in the charter of the company.

Here are other options for using net profit:

Increasing the authorized capital of the company (subject to the introduction of appropriate amendments to the constituent documents);

Creation of special-purpose funds (accumulation fund, production and social development fund, consumption fund, charitable fund, social sphere fund, corporatization fund for company employees, etc.).

The decision on the distribution of the company's net profit for specific purposes is formalized in the minutes of the general meeting of participants (shareholders). This document serves as the basis for making appropriate entries in accounting.

According to the rules enshrined in the Instruction, analytical accounting on account 84 should provide information on the directions for the use of funds. That is, the organization has the right to open the sub-accounts it needs for this account.

Payment of dividends to participants (shareholders)

If part of the profit of the reporting year is directed to the payment of dividends to the participants (shareholders) of the organization, the following entries are made in accounting:

Debit 84, sub-account "Retained earnings of the reporting year", Credit 70

The debt on the payment of dividends to the participants (shareholders) who are employees of the organization is reflected;

Debt on payment of dividends to other participants (shareholders) is reflected.

Note. Dividends on preferred shares of certain types may also be paid out of special funds of the joint-stock company formed earlier for these purposes.

At what point should these entries be made - on December 31 of the reporting year or on the date of the general meeting of participants (shareholders) of the company, that is, already next year?

The announcement of annual dividends based on the results of the organization's activities for the reporting year is classified as an event after the reporting date. So it is said in paragraph 3 of PBU 7/98. If an event occurs after the reporting date, information about it should be disclosed in the notes to the balance sheet and income statement. However, no entries in accounting in the reporting period need to be made (clause 10 PBU 7/98). The organization will reflect the postings on the accrual of dividends only in the period in which the general meeting of participants (shareholders) decides on the direction of profit for the payment of dividends. In other words, these recordings will be made next year.

Note. An approximate list of facts of economic activity that can be recognized as events after the reporting date is given in the Appendix to PBU 7/98.

Example 3. Let's use the conditions of examples 1 and 2. The annual meeting of the participants of LLC "Reformation" was held on March 2, 2009. It approved the organization's reporting for 2008 and decided to use the net profit received in 2008. Part of the profit in the amount of 300 000 rub. It was decided to distribute among the participants of the company in proportion to their shares in the authorized capital.

Information about the declared dividends for 2008 LLC "Reformatsia" disclosed in the explanatory note to the annual financial statements, and in the accounting for 2008 no additional entries were made. The company recorded the accrual of dividends with an entry dated March 2, 2009:

Debit 84, sub-account "Retained earnings of the reporting year", Credit 75-2 "Calculations for the payment of income"

300 000 rub. - the debt to the participants for the payment of dividends for 2008 was taken into account.

Note! When paying dividends, the value of net assets is important

A limited liability company is not entitled to make a decision on the distribution of its profits among the participants, if at the time of such a decision the value of its net assets is less than the authorized capital and reserve fund or becomes less than their size as a result of this decision (clause 1, article 29 of the Federal Law dated 08.02.1998 N 14-FZ).

A joint-stock company is not entitled to make a decision (announce) on the payment of dividends on shares if (clause 3, article 102 of the Civil Code and clause 1, article 43 of Law N 208-FZ):

The value of the company's net assets is less than its authorized capital and reserve fund;

As a result of the payment of dividends, the value of the company's net assets will become less than its authorized capital and reserve fund;

On the date of the decision to pay dividends, the value of the company's net assets is less than its authorized capital, reserve fund and the amount of excess of the liquidation value of the placed preferred shares over their nominal value;

As a result of the payment of dividends, the value of the company's net assets will become less than its authorized capital, reserve fund and the excess of the liquidation value of the placed preferred shares over their nominal value.

The procedure for assessing the value of net assets of joint-stock companies was approved by the joint Order of the Ministry of Finance of Russia N 10n and the Federal Commission for the Securities Market N 03-6/pz dated 01.29.2003. Limited liability companies may also be guided by this document. After all, a separate normative act has not been developed for them.

Contributions to the reserve fund

The obligation to form a reserve fund is established only for joint-stock companies. Limited liability companies have the right to create a reserve fund on a voluntary basis (Article 30 of the Federal Law of 08.02.1998 N 14-FZ).

Joint stock companies form a reserve fund according to the rules set forth in paragraph 1 of Art. 35 of the Federal Law of December 26, 1995 N 208-FZ (hereinafter - Law N 208-FZ). The size of the fund is specified in the charter of the company, but its value cannot be less than 5% of the authorized capital.

The reserve fund of a joint-stock company is formed by mandatory annual deductions, which are made until the established value of the reserve fund is reached. The minimum amount of annual deductions is 5% of net profit, and the specific amount of deductions is specified in the charter.

The reserve fund can only be used for the purposes listed in paragraph 1 of Art. 35 of Law N 208-FZ.

Note. The reserve fund is intended to cover the losses of a joint-stock company, as well as to redeem bonds and buy back company shares in the absence of other means (clause 1, article 35 of Law N 208-FZ).

The formation and use of the reserve fund are accounted for on account 82 "Reserve capital". Since the amount of annual deductions to the reserve fund is established in the charter of the organization, the accountant has the right, without waiting for the annual meeting of shareholders, to reflect in the accounting records the replenishment of the reserve fund by such an entry:

Annual contributions to the reserve fund were made.

Example 4. Based on the results of 2008, Balance OJSC received a net profit of 270,000 rubles. The authorized capital of the organization is 1,000,000 rubles, the amount of the reserve fund as of January 1, 2008 is 33,000 rubles. The charter of the company states that annually 5% of the net profit of the reporting year is deducted to the reserve fund until the value of the reserve fund reaches 50,000 rubles. (1,000,000 rubles x 5%).

Based on the size of the organization's net profit received in 2008, the amount of annual contributions to the reserve fund for this year should be 13,500 rubles. (270,000 rubles x 5%). Taking into account these deductions, the value of the reserve fund will not yet reach 50,000 rubles. [(33,000 rubles + 13,500 rubles)< 50 000 руб.]. Поэтому в бухучете ОАО "Баланс" 31 декабря 2008 г. делает запись:

Debit 84, sub-account "Retained earnings of the reporting year", Credit 82

13 500 rub. - deductions were made to the reserve fund for 2008.

Repayment of losses of previous years

As already mentioned, in the presence of uncovered losses of previous years, the general meeting of participants (shareholders) of the company has the right to use the net profit of the reporting year to pay them off. Moreover, the entire amount of the net profit of the reporting year or only a part of it (for example, remaining after the payment of dividends) can be directed to these purposes. What amount is directed to cover the losses of previous years, is indicated in the minutes of the general meeting.

Note. For tax purposes, an organization has the right to reduce the taxable profit of the current tax period by the amount of losses of previous years (Article 283 of the Tax Code of the Russian Federation).

Suppose an organization has a significant amount of uncovered losses accumulated over past years. Participants (shareholders) of the company have established the following procedure for their redemption. If in the reporting year the organization receives a net profit, then 10% of its amount is directed to pay off the losses of previous years, the rest of the profit is distributed at the annual meeting of participants (shareholders). This procedure is prescribed in the company's charter. In such a situation, the accountant has the right, even before the annual meeting, to reflect in the accounting operation for the partial repayment of losses from previous years.

It should be noted that subsequently the general meeting of participants (shareholders) may decide to allocate an additional part of the net profit of the reporting year to pay off old losses, for example, another 5% of the amount of net profit. Then an entry on the repayment of losses in accounting must be made twice: as of December 31 of the reporting year (on the allocation of 10% of net profit for these purposes) and on the date of the annual meeting (on the use of another 5% of net profit).

Repayment of losses of previous years at the expense of the net profit of the reporting year is reflected in the entry:

Debit 84, subaccount "Retained earnings of the reporting year", Credit 84, subaccount "Uncovered loss of previous years",

Part of the loss of previous years has been repaid.

Use of profit for other purposes

If the participants (shareholders) of the company decided to direct the net profit of the reporting year to increase the authorized capital, the accounting entry must be made:

Debit 84, sub-account "Retained earnings of the reporting year", Credit 80

The authorized capital has been increased.

The Chart of Accounts does not provide for separate accounts or sub-accounts for accounting for special-purpose funds (accumulation fund, consumption fund, social sphere fund, charitable fund, corporatization fund for employees of the company, etc.). Organizations that form these funds record them on account 76 by opening appropriate sub-accounts for it. So, the creation of a fund for the social sphere is reflected in the entry:

Debit 84, subaccount "Retained earnings of the reporting year", Credit 76, subaccount "Social Sphere Fund",

The creation of a fund for the social sphere is reflected.

Note. The corporatization fund for employees of a joint-stock company is spent exclusively on the acquisition of company shares sold by its shareholders for the subsequent placement of shares among employees (clause 2, article 35 of Law N 208-FZ).

Funds of special purpose funds are spent exclusively for the purposes provided for in the charter or other local documents of the company. Let's say at the end of the year on account 76 there were amounts of unused funds. Do I need to write them off to account 84? The accountant has no right to make such decisions independently. After all, all issues related to the use of the organization's net profit are decided by its participants or shareholders. If the annual meeting decides to capitalize the unspent funds of the funds, the accountant will reflect this in the following entry:

Debit 76, subaccount "Accumulation Fund" ("Consumption Fund", etc.), Credit 84, subaccount "Retained earnings of past years",

Included in retained earnings is the unused portion of the fund.

If such a decision is not followed, the funds of the fund that have not been spent in the past year continue to be listed on the corresponding sub-account of account 76 and are intended for use for the same purposes next year.

Suppose the participants (shareholders) of the company decided not to distribute the net profit received in the reporting year. Then the accountant needs to record:

Debit 84, subaccount "Retained earnings of the reporting year", Credit 84, subaccount "Retained earnings of previous years",

The capitalization of the profit of the reporting year was made.

Note. The procedure for the formation of special-purpose funds from net profit and the expenditure of funds from these funds must be prescribed in the charter of the company.

What to do if there is a loss

The loss of the reporting year can be repaid at the expense of undistributed profits of previous years, additional capital (except for the amount of increase in the value of property for revaluation), reserve fund, target contributions of the founders.

In addition, the company has the right to reduce the size of the authorized capital to the value of net assets. After all, the value of the company's net assets should not be less than its authorized capital (clause 4, article 90 and clause 4, article 99 of the Civil Code of the Russian Federation). In this case, the accounting entry is reflected:

Debit 80 Credit 84, sub-account "Uncovered loss of the reporting year",

Decreased share capital.

Note. If, at the end of the second and each subsequent financial year, the value of net assets turns out to be less than the authorized capital, the company is obliged to reduce the authorized capital (Articles 90 and 99 of the Civil Code of the Russian Federation).

The decision on how to cover the loss of the reporting year is made by the general meeting of participants (shareholders) of the company. This is set out in para. 3 p. 3 art. 91 and paras. 4 p. 1 art. 103 of the Civil Code of the Russian Federation.

As with the distribution of net profit, the repayment of the loss of the reporting year is reflected in the accounting records as of the date of the decision by the annual meeting. If the loss is covered by retained earnings of previous years or additional capital, the accountant makes entries:

The loss of the reporting year was repaid at the expense of the profit of previous years;

Debit 83 Credit 84, sub-account "Uncovered loss of the reporting year",

The loss of the reporting year was repaid at the expense of additional capital.

Note. An increase in the authorized capital of a company to cover the losses incurred by it is not allowed.

Joint-stock companies create a reserve fund, the funds of which can be used, among other things, to cover losses. We emphasize that the funds of the reserve fund are used to pay off losses only if there are no other sources - if the company does not have retained earnings of past years and its receipt is not expected in the coming years.

Limited liability companies that have formed a reserve fund on a voluntary basis are entitled to spend its funds for the purposes specified in the charter. In other words, they can use the reserve fund to cover the losses of the reporting year, even if there are retained earnings from previous years.

Note. If the sources available to the organization are insufficient to cover the loss of the reporting year, the general meeting of participants (shareholders) decides to reflect the uncovered loss in the balance sheet.

The operation to pay off the loss of the reporting year at the expense of the reserve fund is reflected as follows:

The loss of the reporting year was repaid at the expense of the reserve fund.

Coverage of losses at the expense of additional targeted contributions of the founders is documented by the entry:

Debit 75, subaccount "Calculations on targeted contributions", Credit 84, subaccount "Uncovered loss of the reporting year",

The loss of the reporting year was written off at the expense of the founders.

Example 5. In 2008, Balance LLC received a loss in the amount of 717,000 rubles. As of January 1, 2009, the organization's accounting records retained earnings of previous years in the amount of 420,000 rubles. and a reserve fund - 27,000 rubles. The general meeting of participants, held on March 6, 2009, decided to allocate 50% of retained earnings of previous years and the entire reserve fund to pay off the loss of 2008. The remaining amount of the loss cannot be written off, since there are no other means for this.

Debit 84, subaccount "Retained earnings of previous years", Credit 84, subaccount "Uncovered loss of the reporting year",

RUB 210,000 (420,000 rubles x 50%) - part of the loss of the reporting year was repaid at the expense of retained earnings of previous years;

Debit 82 Credit 84, sub-account "Uncovered loss of the reporting year",

27 000 rub. - part of the loss of the reporting year was repaid at the expense of the reserve fund;

Debit 84, subaccount "Uncovered loss of past years", Credit 84, subaccount "Uncovered loss of the reporting year",

RUB 480,000 (717,000 rubles - 210,000 rubles - 27,000 rubles) - an uncovered loss is reflected.

Print (Ctrl+P)

Information for users 1C: Integrated automation 1.1

Document « Determination of financial results" and Document "Closing of the year"

Basic provisions

The financial result (profit or loss) of the current month is reflected in a separate synthetic account 99 “Profit and Loss”.

• Debit 99 - Losses (losses, expenses)
• Loan 99- Profits (income)

Turnover 99 (Dt-Kt) - Final financial result (net profit or net loss for the month). At the same time, net profit is the amount of profit of the current reporting period minus income tax due to be paid to the budget.

Account 99 has the following sub-accounts:

• 01 Profit and loss (excluding income tax)
• 02 Income tax
• 09 Other gains and losses

Account 99 has correspondence with many accounts, but in this information we are only interested in the following transactions:

1. The amount of profit from the sale for the month - Dt 90.9 / Kt99.01
2. The amount of loss from the sale for the month - Dt 99.01 / Kt90.9
3. Profits from other activities for the month: Dt 91.9 / Kt 99.01
4. Losses from other activities for the month; Dt 99.01/Kt 91.9
5. Retained earnings for the year Dt 99.01/Kt 84.01
6. Uncovered loss for the year Dt 84.02/ Kt 99.01

Document "Determination of financial results" is used to calculate the amounts 90.09 and 91.01 and make postings No. 1, No. 2, No. 3 and No. 4 at the end of the month.

Document "Closing of the year" is available for holding only for the period “December” and will happen to reform the balance at the end of the year, namely, all balances of subaccounts of accounts 90 and 91 of accounting are written off to the corresponding subaccounts with code 9. All balances of subaccounts of account 99 “Other income and expenses” are written off to account 99.01.1, and the balance of this account is debited to account 84 “Retained earnings (uncovered loss)” (postings No. 5 and No. 6).

Important! Accounts 90 and 91 do not have to have a balance every month, but sub-accounts of account 90 and 91 have a balance at the end of each reporting month. At the end of each year, after carrying out after determining the financial results, it is necessary to carry out the “year-end closing” document to close the sub-accounts of accounts 90 and 91

Closing Account 90 - Sale

Account 90 - Sales has the following sub-accounts

• 01 Revenue
• 02 Cost of sales
• 03 Value added tax
• 04 Excises
• 05 Export duties
• 07 Selling expenses
• 08 Administrative expenses
• 09 Profit / loss on sales

When posting the document “Determination of financial results” with the flag “Closing account 90” checked, the financial result reflected during the month on account 90 “Sales” will be calculated and a posting will be generated to write off the identified result from sub-account 90.09 “Profit / loss from sales” to the account 99.01 "Profit and loss (excluding income tax)".

The financial result (Profit / loss) is determined by the formula:

Result= Kt90.01 - (Dt 90.02-Kt90.02) - (Dt 90.03 - Kt90.03) - (Dt 90.04 - Kt90.04) - (Dt90.05-Kt90.05)

That is, the financial result is determined by the turnover of the loan 90.01 minus the turnover of accounts 90.02, 90.03, 90.04, 90.05

If result > 0, then the organization made a profit in the reporting month.

The amount of profit is reflected in the posting: Dt 90.9/Kt99.01

If the result< 0 , then the organization received a loss in the reporting month ..

The amount of the loss is reflected in the posting: Dt 99.01/Kt90.9

Thus, the sub-accounts of account 90 “Sales” have a balance at the end of each reporting month, but account 90 itself should not have a balance at the end of the month. At the end of the year, all sub-accounts of account 90 that have a balance must be closed with the “closing of the year” document

Sub-accounts are closed by the following transactions:

Dt90.1 / Kt90.9 - closing of account 90.1 "Revenue" at the end of the year.

Dt90.9 / Kt 90.2 - closing of account 90.2 "Cost of sales" at the end of the year.

Dt 90.9 / Kt 90.3 - closing of account 90.3 "VAT" at the end of the year.

D 90.9 / K 90.4 - closing account 90.4 "Excises" at the end of the year

D 90.9 / K 90.5 - closing of account 90.5 "Export duties" at the end of the year.

Closing of account 91 "Other income and expenses"

Account 91 has the following sub-accounts:

91.01 Other income

91.02 Other expenses

91.09 Balance of other income and expenses

The financial result on account 91 is the balance of other income and expenses. It is determined at the end of each month by the formula

Result \u003d Kt 91.1 - Dt 91.2.

If Result > 0, then the organization made a profit (credit balance) and is reflected in the posting

Dt 91.9/ Kt 99.01– reflection of profit from other activities;

If Result< 0 , then the organization received a loss (debit balance) and is reflected in the posting

Dt 99.01/Kt 91.09– reflection of loss from other activities;

At the end of the year, all sub-accounts of account 91 must be closed with the “Closing of the Year” document. When you post a year-end closing document, the following postings are made:

Dt 91.01 / Kt 91.09 - sub-account 91.1 is closed at the end of the year.

Dt 91.09 / Kt 91.02 - sub-account 91.2 is closed at the end of the year.

Closing of account 99 "Profit and Loss" at the end of the year in correspondence with account 84

Account 84 - Retained earnings (uncovered loss) has the following sub-accounts

• 01 Profit to be distributed
• 02 Loss to be covered
• 03 Retained earnings outstanding
• 04 Retained earnings used

If at the end of the year the organization made a profit, then the posting is formed:

Dt 99.01 / Kt 84.01 - reflects the net profit of the reporting year.

If loss, then posting:

Dt 84.02 / Kt 99.01 - uncovered loss of the reporting year is reflected.

Account 99 "Profit and loss" used to reflect the financial result of the organization. Income is reflected in the Credit of the account, loss is reflected in the Debit.

Wiring:

No. p / p		Debit	Credit
	Determined retained earnings
	Amount of net loss written off
	Written off loss from sales for the main activity
	Reflected profit from the main activity
	Reflected loss from other income and expenses
	Reflected profit from other income and expenses
	The balance of the unused reserve of future expenses is allocated to increase in profit
	Written off the cost of materials lost as a result of extraordinary circumstances
	Charged to the account of the perpetrators of the amount of extraordinary expenses
	Accrued income tax

emergency are losses or gains associated with unplanned events. For example, receipts of insurance compensation, losses due to natural disasters, fires and other emergencies.

Analytical accounts "99"

99.1 - profits and losses;

99.2 - income tax;

99.3 - extraordinary income (expenses);

99.6 - tax sanctions;

99.9 - other losses and profits.

For detailed display of information organizations can create subaccounts of the 3rd or 4th levels for these subaccounts.

Closing account "99"

At the end of the reporting year, account 99 is closed to account 84 “Retained earnings (loss)”, and there is no balance left on it.

Profit is reflected by posting Dt 99 - Kt 84,

Received loss: Dt 84 - Kt 99.

During the year with monthly account closure 99 the balance Dm means loss, the balance Km means profit. At the end of the year, in correspondence with account 84, the debit balance will mean profit, and the credit balance will mean loss.

Postings and examples of using 99 accounts

Example 1

In December 2014, Kalina LLC purchased equipment worth 800,000 rubles, with a useful life of 5 years, the depreciation method in accounting is the declining balance method and in tax accounting it is linear.

For 2015-2016, the accumulated depreciation amounted to: in accounting - 288,000 rubles, in tax - 320,000 rubles.

Loan interest charged

Reflected profit for the month (118,000 - 18,000 - 42,000)

Accounting information

Reflection of conditional income (58,000 x 20%)

Accounting information

Example 3: Closing the year

As of this date, the accounting records show:

1. 90.1 (revenue) - 1,888,000 rubles, incl. VAT 288 000 rub.
2. 90.2 (cost) - 520,000 rubles.
3. 90.3 (VAT) - 288,000 rubles.
4. 90.5 (general expenses) - 115,000 rubles.
5. Kt 90.9 - 965 000 rub.
6. 91.1 (other income) - 210,000 rubles.
7. 91.2 (other expenses) - 230,000 rubles.
8. Dt 91.9 (balance of other income-expenses) - 20,000 rubles.
9. 99.1 (profit and loss) - 640,000 rubles.
10. 99.2 (calculations for NP) - 195,000 rubles.
11. 99.3 (tax sanctions) - 10,000 rubles.

When forming a scheduled operation at the end of the year, postings are created:

		Operation description	Amount, rub.	Document
		Closing 90.1		Accounting reference
		Closing Reflection 90.2		Accounting reference
		Closing Reflection 90.3		Accounting reference
		Closing Reflection 90.5		Accounting reference
		Closing 91.1		Accounting reference
		Closing 91.2		Accounting reference
		Closing 99.1		Accounting reference
		Closing 99.2		Accounting reference
		Closing 99.3		Accounting reference

RUB 1,800,000

Revenue from the sale of goods for August 2015

Cost of goods sold

VAT on the cost of goods sold

Implementation costs

Postings for closing 99 accounts:

			Sum	Base
		Selling expenses are written off against the cost of goods		Expense Report
		The amount of profit received is reflected (1,800,000 rubles - (800,000 rubles + 324,000 rubles + 120,000 rubles))		Accounting information

Example 5

In the month of August, Kalina LLC:

Legal services were rendered in the amount of 150,000 rubles;

Bala accrued a salary to lawyers - 60,000 rubles;

Insurance premiums were accrued - 18,000 rubles.

As of September 30, the lawyers' salaries had not been issued, payment for the services performed had not been received.

On September 15, lawyer Ivanov K.K. held a representative meeting with clients of Kalina LLC, these expenses amounted to 3,000 rubles. They were reimbursed to Ivanov in full and included in the calculation of income tax of 2,400 rubles. (60,000 rubles x 4% at the rate).

Wiring:

		Description	Sum	Document
		Revenue from rendered legal services		Acts of rendered services