retained profit
Retained earnings is the accounting of the balance sheet of corporations designated part of the profits . The opposite is the accumulated loss .
General
Balance sheet profit / balance sheet loss are commercial law terms that are by no means identical with the profit / loss actually incurred in the financial year . A balance sheet profit can still be shown even if a loss has occurred. The balance sheet profit is calculated as follows from the reconciliation of § 158 Paragraph 1 AktG for AG and KGaA:
Jahresüberschuss/Jahresfehlbetrag + Gewinnvortrag aus dem Vorjahr oder - Verlustvortrag aus dem Vorjahr + Entnahmen aus der Kapitalrücklage + Entnahmen aus Gewinnrücklagen - Einstellungen in Gewinnrücklagen = Bilanzgewinn/Bilanzverlust
If, according to this list, one assumes an annual deficit and only a withdrawal from the revenue reserve that exceeds this, then a balance sheet profit is shown. Net profit / net loss are the same as net profit / net loss for the year only if the positions in between are unoccupied or cancel each other out.
Balance sheet profit / balance sheet loss are shown on the liabilities side of the balance sheet in accordance with Section 268 (1) HGB , in accordance with Section 266 (3) HGB under item A IV. At AG / KGaA, the annual surplus / net loss must be added to the balance sheet profit / balance sheet loss to be continued in accordance with Section 152 (2) and (3) AktG.
use
A balance sheet profit arises only if the balance sheet was drawn up after partial use of the profit. The time at which the balance sheet is drawn up is decisive for the disclosure of a balance sheet profit. If the decision on the distribution of profits has not yet been taken at the time the balance sheet is drawn up and no appropriation of profits is prescribed by the Articles of Association or the law, the entire annual surplus is available for distribution. The net profit then corresponds to the net profit for the year plus the profit carried forward from the previous year. According to Section 268 (1) of the German Commercial Code (HGB), the balance sheet may also be drawn up after partial appropriation of the profit, so that the balance sheet profit / balance sheet loss takes the place of the annual surplus / annual deficit and the profit / loss carried forward. If the Management Board and the Supervisory Board have decided to transfer part of the annual surplus to the reserves, the balance sheet profit is reduced by this amount. If the general meeting has finally decided on the amount of the dividend, this is taken from the net profit and booked as other liability . Any remaining balance sheet profit will be carried forward in the next financial year.
Based on the annual surplus / net loss according to § 275 HGB or § 231 UGB (Austria) , the balance sheet profit / balance sheet loss is a residual amount that can be distributed as a dividend at the AG / KGaA and GmbH to the shareholders / partners . Section 58 (2) AktG regulates the determination of the net profit. According to this, the management board and the supervisory board can transfer a maximum of 50% of the annual surplus to the revenue reserves. Shareholders according to § 58. 4, § 60 AktG claim on the net profit, GmbH partner according to § 29 , para. 1, sentence 2 GmbHG. Once the annual financial statements have been approved, the general meeting decides on the appropriation of the net profit in accordance with Section 174 (1) AktG. In the appropriation resolution, pursuant to Section 174 (2) AktG, the balance sheet profit is to be stated under No. 1, under No. 2 the amount to be distributed, under No. 3 the amounts to be transferred to the revenue reserves, under No. 4 a profit carried forward and under No. 5 the due tax expenses incurred in accordance with this resolution.
If the balance sheet is drawn up after the full appropriation of the results, the item of the balance sheet profit is omitted; the undistributed parts of the net profit are shown under reserves . In the case of stock corporations, it is the rule that the balance sheet is drawn up according to the partial appropriation of profits and thus the disclosure of a balance sheet profit.
From the above diagram it can be seen that the balance sheet profit can easily be influenced by changing the reserves and is therefore unsuitable as an indicator of the company's success. Business metrics use the annual surplus or profit instead.
Fictitious balance sheet profit
In fiscal unity relationships with profit transfer agreements , the profit of the dependent company recognized as an expense in accordance with Section 277 (3) sentence 2 HGB and to be transferred to the controlling parent company is added back to the annual profit. Then we speak of a fictitious balance sheet profit, which represents the amount of profit to be transferred to the controlling company. However, this invoice is for explanatory purposes only and is not part of the annual financial statements. In the case of subsidiaries, profit or profit and loss transfer agreements usually mean that the net profit is "zero".
Balance sheet loss
Since in the case of the AG and GmbH, the general or shareholders' meeting cannot make any decisions on the use of a recognized balance sheet loss, a balance sheet loss remains and is automatically transferred to the item loss carryforward in the next financial year (Section 266 (3) A IV HGB). In the income statement , the loss carryforward must only be shown for the AG in accordance with Section 158 (1) No. 1 AktG. In order to avoid a balance sheet loss - which is viewed negatively by the public - the companies usually ensure compensation by dissolving the same amount of retained earnings.
literature
- Rudolf Heno: Annual financial statements in accordance with commercial law, tax law and international standards (IFRS) . Springer, 2006
Individual evidence
- ↑ Wolfgang Lück (Ed.), Lexikon der Betriebswirtschaft , 1990, p. 190 f.
- ↑ Wolfgang Breuer / Thilo Schweizer / Claudia Breuer, Gabler Lexikon Corporate Finance , 2013, p. 75
- ^ Jan Wilhelm, Corporation Law, 2009, p. 500
- ↑ Jens Kuhlmann / Erik Ahnis, corporate and transformation law , 2007, p. 260
