Profit carried forward
The profit carried forward (engl. Profit carry forward ) is a balance position , which the rest of the unused earnings contains from the previous year. The opposite is the loss carryforward .
Germany
General
The profit carried forward is provided as a separate balance sheet item for corporations in the commercial classification scheme ( Section 266 of the German Commercial Code). A comparable regulation applies to certain limited liability companies (in particular GmbH & Co. KGs) ( Section 264c HGB). In the case of partnerships that do not fall under Section 264c of the German Commercial Code (e.g. limited partnerships, general partnerships), the profit is allocated to the shareholders in full at the end of the financial year, so that no profit to be carried forward remains. In the articles of association, however, it can be agreed that the profit will only be appropriated through a shareholders' resolution, so that in principle all partnerships can result in profit carryforwards depending on the resolution and the provisions of the articles of association.
The profit carried forward can be used to fully or partially offset an annual deficit that occurs in the following year . In the case of stock corporations, the profit carried forward will often only comprise a non-distributable peak amount that is not sufficient to increase the dividend .
Accrual to net profit
If the full or partial use of the annual surplus is already taken into account when the annual financial statements are drawn up, no profit carryforward is shown. The remaining sum of the annual surplus and profit carried forward is then to be presented as retained earnings. The consideration of the appropriation of earnings when preparing the annual financial statements is mandatory for stock corporations ( Section 158 AktG).
The decision on the appropriation of profits is generally made by the general meeting (AG) or the shareholders' meeting (GmbH). The use of results, e.g. B. in the form of an allocation to reserves, but may be prescribed by law or the articles of association. The right of the general meeting to carry forward the balance sheet profit as profit is expressly regulated in Section 58 (3) sentence 1 AktG ; Section 29 GmbHG applies to the GmbH . According to this, the shareholders of the GmbH are entitled to the annual surplus plus a profit carried forward and minus a loss carried forward.
Determination of the profit carried forward
To determine the balance sheet profit, the following reconciliation is to be used in accordance with Section 158 AktG. The profit carried forward for the current financial year is then derived from this calculated profit.
Jahresüberschuss/Jahresfehlbetrag
- Verlustvortrag (Vorjahr) + Gewinnvortrag (Vorjahr)
+ Entnahmen aus 1. Kapitalrücklage 2. Gewinnrücklagen a) gesetzlicher Rücklage b) Rücklage für eigene Anteile c) satzungsmäßigen Rücklagen d) anderen Rücklagen
- Einstellungen in a) gesetzliche Rücklage b) Rücklage für eigene Anteile c) satzungsmäßige Rücklagen d) andere Rücklagen = Bilanzgewinn/Bilanzverlust
- Dividende - Einstellungen in andere Rücklagen - zusätzlicher Aufwand
= Gewinnvortrag
IAS
According to IAS 16.41, any revaluation reserve is to be released directly in favor of a profit carried forward without affecting the income statement . Here, the profit carried forward is to be presented as an “accumulated result” in a special change calculation of the equity. This function is taken over by the reconciliation of § 158 AktG.
