Calculation formula of undistributed profit

The calculation formula of undistributed profit is: undistributed profit at the end of the enterprise = undistributed profit at the beginning+net profit realized in the current period-surplus reserve drawn in the current period-profit distributed to investors in the current period.

Compared with other parts of owners' equity, enterprises have greater autonomy in the use and distribution of undistributed profits. Because surplus reserve fund and undistributed profit belong to retained earnings of enterprises, there are many regulations and restrictions on the extraction and use of retained earnings besides the independent behavior of enterprises.

In accounting treatment, undistributed profits are accounted by the "profit distribution" account. The subjects of profit distribution include statutory surplus reserve, arbitrary surplus reserve, cash dividends or profits payable, profit from share conversion, surplus reserve to cover losses and undistributed profits.

When accounting for undistributed profits, we should pay attention to the following issues:

(1) Undistributed profit accounting is conducted through the "Profit Distribution-Undistributed Profit" account.

(2) Undistributed profit accounting is generally carried out at the end of the year. At the end of the year, the net profit realized this year will be carried forward to the credit of "profit distribution-undistributed profit". At the same time, transfer the profit distribution amount of this year to the debit of the "profit distribution-undistributed profit" account.

(3) The credit ending balance of the "profit distribution-undistributed profit" carried forward at the end of the year reflects the accumulated undistributed profit, and the debit ending balance reflects the accumulated uncompensated loss.