Principles of construction of the report on financial results

There are five basic economic principles for preparing a statement of financial results:

1. The principle of calculating the financial result using the gross method provides for the prevention of offsetting income and expense items. This principle provides for the reflection of all income and expenses in full without offsets. The net method implies the summation (reconciliation) of homogeneous income and expenses, while only the result of the addition is reflected. The gross method should be applied by all business entities. Exceptions are allowed only on the basis of separate legal provisions for small businesses using a simple form of accounting.

2. The principle of detailing income and expenses by types is related to their nature and means that all income and expenses of the reporting period must be structured in a certain way – income and expenses from ordinary activities and other income and expenses.

3. The principle of constructing a report on financial results by management functions involves attributing income and expenses to certain areas of the organization’s activities – production, marketing, management, and thus assess their economic impact.

4. The principle of periodization is that the income and expenses of the enterprise relate to the period in which, according to the accrual principle (the temporal certainty of the facts of economic activity), they took place, regardless of the actual time of receipt or payment of funds associated with these facts.

5. The principle of dividing the financial result into the result from the main and other activities. This principle proceeds from the fact that income and expenses should be separated in the statement of financial results in such a way that the main and other components of the financial result are recognizable. This division allows external users of financial statements to clear the obtained financial result from random factors, and internal users to make appropriate management decisions to maximize profits and reduce losses.

Content and structure of the income statement

The report is compiled on an accrual basis from the beginning of the year. The statement of financial results characterizes the financial results of the organization’s activities for the reporting period and the same period of the previous year.

In the new form of the income statement, in the special column “Explanations” next to each article, it will be necessary to indicate in which paragraph of the explanations this or that indicator is disclosed.

In the new form of the statement of financial results, there is no breakdown into sections “Income and expenses from ordinary activities” and “Other income and expenses”, although such a qualification is maintained.

It is necessary to fill out the statement of financial results in accordance with the requirements of PBU 9/99 “Income of the organization” and PBU 10/99 “Expenses of the organization”, PBU 18/02 “Accounting for settlements on corporate income tax” (approved by order of the Ministry of Finance of Russia dated November 19, 2002 No. No. 114n).

The report grouped the following articles:

1. Line 2110 “Revenue”. This article shows the proceeds from the usual types of activities for the enterprise (sale of products and goods, performance of work, provision of services) excluding VAT, excises and export duties. What is considered ordinary business, the company determines independently (clause 4 PBU 9/99 “Income of the organization”).

When filling in the line, take into account only the revenue that:

– can be determined

– the organization has the right to receive;

– the organization knows when it will receive (or has already received).

Information on income that makes up at least 5 percent of the total income of the organization must be reflected in the report separately (paragraph 18.1 of PBU 9/99). If the accounting policy provides for a different criterion of materiality, when compiling the Report, disclose income in accordance with it (paragraph 2, clause 11 of PBU 4/99). Also reflect the costs associated with obtaining such income separately (paragraph 21.1 of PBU 10/99). The procedure for disclosing information about income and related expenses in the financial statements is not defined by regulatory documents. Therefore, they can be reflected:

– directly in the report (in additional lines);

– in the notes to the balance sheet and income statement.

A specific option should be fixed in the accounting policy of the organization (clause 7 PBU 1/2008).

However, small businesses that are not required to conduct an audit are entitled to submit Form No. 2 without transcripts.

When reflecting the proceeds from the sale of goods, products, works, services, an entry is made in accounting: Debit 50, 51, 62 Credit 90/1 “Revenue”.

This line is filled in according to analytical accounting data for account 90 “Sales” (journal-order No. 11 or a similar accounting register). From the turnover on the credit of subaccount 90/1 “Proceeds”, the amounts reflected in the debit of subaccounts 90/3 “VAT”, 90/4 “Excises”, 90/5 “Export duties” are deducted.

The proceeds are taken taking into account various discounts or markups, as well as interest due from the buyer for installment payment. But the amount of VAT, excises, export duties is excluded from the amount of revenue. In addition, money received by an intermediary from buyers for goods belonging to the committent (principal or trustee), advances received and amounts received as collateral, deposit, etc. are not considered income.

2. Line 2120 “Cost of sales”. This line reflects information on expenses for ordinary activities that formed the cost of goods sold, products, works, services (excluding amounts reflected in the line “Administrative expenses”).

Accounting records may include:

Debit of account 90 “Sales” sub-account 2 “Cost of sales” Credit of accounts 20 “Main production”, 40 “Output of products (works, services)”, 43 “Finished products”.

Trade, supply and marketing and similar organizations reflect in the line “Cost of sales” the purchase price of goods, the proceeds from the sale of which are shown in the line “Revenue”.

In accounting, these transactions are recorded as:

Debit of account 90 “Sales” sub-account 2 “Cost of sales” Credit of account 41 “Goods”.

If the goods were accounted for at selling prices, then the share of the trade margin attributable to the goods sold is excluded (reversal entry: Debit of account 90 “Sales” subaccount 2 “Cost of sales” Credit of account 42 “Trade margin” ).

The costs associated with the sale of products (goods) are not included in these lines “Cost of sales”.

The line “Cost of sales” is filled in according to the debit turnovers of analytical accounts to sub-account 90/2 “Cost of sales” (journal order No. 11 or a similar accounting register).

When filling out this article, only those expenses are taken into account:

– produced on the basis of a contract or the requirements of legislative and regulatory acts;

– can be defined;

– on the basis of the expense, there has been (or will be) a decrease in the economic benefits of the organization.

If the report discloses revenue by type of activity, then, accordingly, for each of them, you need to indicate the cost.

3. Line 2100 ” Gross profit ( loss )”. The item “Gross Profit” is a subtotal. It is defined as the difference between the indicators “Revenue” (p. 2110) and “Cost of sales” (p. 2120). If the result is a negative value (loss), then it must be shown in parentheses.

This is profit from ordinary activities, calculated without taking into account selling and administrative expenses (if, in accordance with the accounting policy of the organization, administrative expenses are recognized as conditionally fixed and are shown in line 2220 “Administrative expenses” of the Statement of financial results (clause 23 PBU 4/99) ).

4. Line 2210 “Selling expenses”. This line reflects information on expenses for ordinary activities related to the sale of products, goods, works and services (commercial expenses of the organization) (clauses 5, 7, 21 PBU 10/99), including: advertising expenses products, for tare and packaging of products, loading and unloading operations, commission fees to intermediary organizations, storage costs at points of sale. Trade and supply organizations as part of selling expenses take into account distribution costs. These expenses are taken into account on account 44 “Sales expenses”. In accounting, these operations are recorded as: Debit of account 90 “Sales” subaccount 2 “Cost of sales” Credit of account 44 “Expenses for sale”. The line “Commercial expenses” is filled in according to the data of the debit turnover of the corresponding analytical account to sub-account 90/2 “Cost of sales” (magazine order No. 11 or a similar accounting register).

Expenses for ordinary activities included in commercial activities are the following expenses related to the sale of goods, products, works and services (clause 5 PBU 10/99, clause 13 PBU 5/01, clause “b” clause 28 of the Regulation on accounting and financial reporting, clause 30 of the Guidelines for accounting of inventories, Instructions for the use of the Chart of Accounts):

– for packaging and packaging of products in warehouses of finished products;

– for the delivery of products to the station (pier) of departure;

– for loading into wagons, ships, cars and other vehicles;

– for commissions paid to sales and other intermediary organizations;

– for the maintenance of premises for the storage of products in the places of its sale;

– for wages of salespeople in organizations engaged in production;

– to analyze products during their release;

– for advertising;

– for entertainment expenses;

– for procurement, delivery of goods to central warehouses (bases) and transportation (dispatch) of goods (in trade organizations);

– for wages in trade organizations;

– for the lease of commercial premises and warehouses for finished products;

– for the maintenance of commercial premises and warehouses for finished products;

– storage and processing of goods;

– for insurance of shipped goods, products and commercial risks;

– to cover the shortage of goods (products) within the norms of natural loss;

– for the maintenance of procurement and receiving points;

– for the maintenance of livestock and poultry at reception points and bases;

– other similar expenses.

Selling expenses on a monthly basis, in whole or in part (when selling expenses are distributed between sold and unsold products (goods)) are debited from account 44 “Sales expenses” to the debit of account 90 “Sales”, subaccount 90-2 “Cost of sales” (clause 9 PBU 10/99, Instructions for the use of the Chart of Accounts). The write-off procedure is established in the accounting policy of the organization (clause 20 PBU 10/99).

5. Line 2220 “Administrative expenses”. This line reflects information on expenses for ordinary activities related to the management of the organization (clauses 5, 7, 21 PBU 10/99). This line is filled in by those firms that write off management expenses from account 26 as conditionally permanent to the debit of account 90 “Sales” (subaccount 2 or 8).

If, according to the accounting policy, general business expenses are attributed to the cost of production (Debit of account 20 “Main production” Credit of account 26 “General business expenses”), then their share related to the sold products is reflected in the item “Cost of goods, products, works, services sold”, and under the item “Administrative expenses” a dash is put.

The line “Administrative expenses” is filled in according to the data of the debit turnover of the corresponding analytical account to the sub-account 90/2 “Cost of sales” (magazine order No. 11 or a similar accounting register).

6. Line 2200 “Profit (loss) from sales” reflects the profit (loss) received as a result of the main (ordinary) activity of the organization from the sale of goods, products, works and services, identified on account 90/9 in correspondence with account 99. Indicator 6 = Indicator 3 – Indicator 4 – Indicator 5, or line 2200 = line 2100 – line 2210 – line 2220.

7. Line 2310 “ Income from participation in other organizations reflects income from equity participation in the authorized capital in other organizations (clause 7PBU9/99) or dividends on shares (clause 18PBU9/99).

These include:

– the amount of the part of profit (dividends) distributed in favor of the organization;

– the value of property received upon exit from the company or upon liquidation of the organization.

These incomes are reflected in the recipient’s accounting on the basis of extracts from decisions of shareholders’ meetings, certificates or other documents confirming the fact of accrual of income, as their amount is announced by the organization paying them.

Other income from the organization’s participation in the authorized capital of other organizations is reflected in the accounting records as follows: Debit 76-3 “Settlements on due dividends and other income”, Credit 91-1 “Other income”. The indicator of line 2310 for the reporting period is determined on the basis of data on the total credit turnover for the reporting period on subaccount 91-1, an analytical account for accounting for income from participation in the authorized capital of other organizations.

8. Line 2320 ” Interest receivable “. This line reflects information about the organization’s income in the form of interest due to it, which is other income for the organization (paragraph 18 of PBU 9/99).

The interest to be received by the organization includes (clause 7 PBU 9/99, Instructions for the use of the Chart of Accounts):

– interest due to the organization on loans issued by it;

– interest and discount receivable on securities (for example, on bonds, promissory notes);

– interest on commercial loans granted by transferring an advance payment, advance payment, deposit;

– interest paid by the bank for the use of funds in the organization’s current account.

Interest is recognized as income of the organization when it has the right to receive it. In this case, the following accounting entry is made: D 76 “Settlements with various debtors and creditors” K 91-1 “Other income”.

9. Line 2330Interest payable”. This line reflects information on other expenses of the organization in the form of interest accrued payable (clause 21 PBU 10/99, clause 17 PBU 15/2008).

The interest payable by the organization includes (clauses 1, 3, 7, 15, 16 PBU 15/2008, clause 11 PBU 10/99):

– interest paid on all types of loan obligations of the organization (including commodity and commercial loans, bond and promissory note loans), in addition to the part that, in accordance with accounting rules, is included in the value of the investment asset;

– discount payable on bonds and promissory notes.

Attention!

Small businesses, with the exception of issuers of publicly placed securities, are entitled to recognize all borrowing costs as other expenses (clause 7 of PBU 15/2008).

Interest is evenly recognized as part of other expenses in the reporting periods to which they relate (clauses 6, 8, 15, 16 PBU 15/2008).

10. Line 2340 “Other income”. It shows all types of other income of the organization (their list is given in PBU 9/99) without VAT and excises, with the exception of income from participation in the authorized capital of other organizations and interest receivable.

According to PBU 9/99, other income includes:

– income related to the provision for a fee for temporary use (temporary possession and use) of the organization’s assets, not included;

– receipts related to the granting of rights to use the results of intellectual activity for a fee (if these receipts are not recognized as income from ordinary activities, i.e. in section I);

– profit received by the organization as a result of joint activities (under a simple partnership agreement);

– proceeds from the sale of fixed assets and other assets other than cash (except for foreign currency), products, goods ( VAT and excise taxes accrued upon the sale of the asset must be excluded from these incomes );

– fines, penalties, forfeits for violation of the terms of contracts;

– assets received free of charge, including under a donation agreement or as state aid;

– receipts in compensation for losses caused to the organization

– profit of previous years, revealed in the reporting year;

– amounts of accounts payable and depositor’s debts for which the limitation period has expired;

– positive exchange rate differences;

– the amount of revaluation of an asset (fixed asset, intangible asset, prospecting asset) within the amount of the markdown of this object in previous reporting periods, charged to other expenses;

– the cost of material assets remaining from the write-off of assets;

– other income, for example, receipts arising as a result of emergency circumstances of economic activity (natural disaster, fire, accident, etc.), negative business reputation when acquiring an enterprise as a property complex.

Other income constituting 5% or more of the total amount of other income of the organization for the reporting period is shown separately for each type. To do this, an organization can enter additional lines in the profit and loss statement (paragraph 18 of PBU 9/99).

The amount of VAT payable on sold and leased property is not subject to inclusion in other income.

11. Line 2350 “Other expenses”. All types of other expenses of the organization are reflected (their list is given in PBU 10/99), with the exception of interest payable.

According to PBU 10/99, other expenses of the organization are:

– expenses associated with participation in the authorized capital of other organizations;

– expenses associated with the sale, disposal and other write-off of fixed assets and other assets other than cash (except for foreign currency), goods, products;

– expenses related to payment for services rendered by credit institutions;

– deductions to estimated reserves created in accordance with accounting rules (reserves for doubtful debts, for depreciation of investments in securities, etc.);

– deductions to reserves created in connection with the recognition of contingent facts of economic activity;

– fines, penalties, forfeits for violation of the terms of contracts;

– compensation for losses caused by the organization;

– losses of previous years identified in the reporting year;

– amounts of receivables for which the limitation period has expired, other debts that are not real for collection;

– negative exchange rate differences;

– amount of depreciation of assets;

– transfer of funds (contributions, payments, etc.) related to charitable activities;

– expenses for the implementation of sports events, recreation, entertainment, cultural and educational events and other similar events;

– other expenses, for example, expenses arising as a result of emergency circumstances of economic activity (natural disaster, fire, accident, etc.).

The value of the line “Other expenses” is indicated in parentheses. In the event that certain types of income are allocated in the profit and loss account, constituting 5% or more of the total amount of the organization’s income for the reporting period, it shows the part of the expenses corresponding to each type of income. To do this, the organization may enter additional lines in the income statement (clause 21.1 PBU 10/99).

12. Line 2300 ” Profit ( loss ) before tax “. This intermediate indicator represents the overall financial result of the organization’s activities associated with the production and sale of products (performance of works and provision of services), as well as other activities ( accounting profit (loss) . Indicator 12 = Indicator 6 + Indicator 7 + Indicator 8 – Indicator 9 + Indicator 10 – Indicator 11, or Line 2300 = Line 2200 + Line 2310 + Line 2320 – Line 2330 + Line 2340 – Line 2350.

If the organization has a loss from ordinary and other activities, it is shown in parentheses.

13. Line 2410 “Current income tax” This line reflects information on the current income tax, i.e. on the amount of income tax accrued for payment to the budget, reflected in the Tax Declaration for corporate income tax (clause 24 PBU 18/02).

Current income tax is income tax for tax purposes, determined on the basis of the conditional income tax expense (conditional income) adjusted for the amount of a permanent tax liability (asset), an increase or decrease in a deferred tax asset and a deferred tax liability of the reporting period ( p. 21, 22 PBU 18/02).

Determining the amount of current corporate income tax can be done in one of two ways.

Method 1. The current income tax is income tax for tax purposes, determined on the basis of the amount of contingent income tax expense (conditional income), adjusted for the amount of a permanent tax liability (asset), an increase or decrease in a deferred tax asset and a deferred tax liability reporting period (clauses 21, 22 PBU 18/02).

In the absence of permanent differences, deductible temporary differences and taxable temporary differences that give rise to permanent tax liabilities (assets), deferred tax assets and deferred tax liabilities, the current income tax is equal to the contingent income tax expense (paragraph 21 of PBU 18 /02).

Method 2. The current income tax can be determined on the basis of the Tax Declaration on corporate income tax (line 180 of sheet 02) (paragraph 22 of PBU 18/02).

Note that this method does not exempt the organization from the need to reflect in accounting permanent and temporary differences, permanent tax liabilities and assets, as well as deferred tax liabilities and assets (clauses 3, 7, 14, 15 PBU 18/02).

With any method of determination, the current income tax must be equal to the amount of income tax reflected in the Corporate Income Tax Return and calculated according to tax accounting data.

The method for determining the amount of the current income tax is fixed in the accounting policy of the organization (clause 22 PBU 18/02)

The first method is the most common in domestic accounting practice.

Depending on the current accounting situation, the calculation of the current tax is carried out according to one of the formulas:

1) if accounting profit is received :

TN u003d UR + PNO + SHEITPNA ;

2) if an accounting loss is received

TN u003d PNO + SHEITUDPNA ;

where TN is the current income tax; UR – conditional income tax expense (D 99 K 68); UD – conditional income for income tax (D 68 K 99); PNO – permanent tax liability (D 99 K 68); SHE – deferred tax asset (D 09 K 68); IT – deferred tax liability (D 68 K 77); PNA is a permanent tax asset (D 68 K 99).

The income statement reflects the balance of the sub-account “Calculations for income tax” of account 68.

By accounts: Current income tax expense = +/- Turnover on account 99 subaccount 99 “Conditional income tax expense / income” +/- Difference between credit and debit turnover on account 99 subaccount “Permanent tax liabilities and assets” + – Difference between debit and credit turnovers on account 09 “Deferred tax assets” +/- Difference between credit and debit turnovers on account 77 “Deferred tax liabilities”

Conditional expense ( income ) for income tax is a value defined as the product of accounting profit (loss) by the income tax rate (CH = 20%):

UR u003d BP × SN , if the accounting profit of BP is received;

UD u003d BU × SN , if an accounting loss BU is received.

(From January 1, 2009, the income tax rate = 20%, of which 2% is credited to the federal budget, and 18% – to the budget of the constituent entities of the Russian Federation).

14. Line 2421 “including permanent tax liabilities (assets)” reflects information on the balance of permanent tax liabilities (assets) (clause 24 PBU 18/02). This line is calculated as the difference between credit and debit turnovers on account 99 (an analytical account for accounting for permanent tax liabilities and assets).

A negative difference means PNA > PNA. At the same time, since PNO increase income tax (D99 K 68), they accordingly reduce net profit. Therefore, such a difference is shown in the income statement in parentheses as a negative value for the purpose of its further use in calculating net profit.

15. Line 2430 “Change in deferred tax liabilities” is calculated as the difference between credit and debit turnovers on account 77 “Deferred tax liabilities” in correspondence with account 68 for the reporting period.

If the difference turns out to be negative, then this means that more deferred tax liabilities for the reporting period were written off than accrued. A positive difference should be shown on line 2430 in parentheses.

To exclude the effect of a change in IT on the net profit (loss), the positive difference between these turnovers (increase in IT) should be subtracted from the accounting profit indicator (line 2300), and the negative difference (decrease in IT), on the contrary, should be added to the indicator of accounting profit.

Note that the values of the indicators in the line “Change in deferred tax assets” and “Change in deferred tax liabilities” of the form “Statement of financial results” do not match the values of the indicators in the lines “IT” and “IT” in the form “Balance sheet”. This is explained by the fact that the balance sheet shows the balances of accounts 09 “Deferred tax assets” and 77 “Deferred tax liabilities” at the end of the reporting period. Therefore, in the form “Profit and Loss Statement” it is necessary to reflect changes (increase or decrease) in IT and IT for the reporting period.

16. Line 2450 “Change in deferred tax assets is calculated as the difference between debit and credit turnover on account 09 “Deferred tax assets” in correspondence with account 68 for the reporting period.

If the calculated difference is negative, it is presented for this line in brackets.

To exclude the effect of changes in IT on the net profit (loss), the positive difference between these turnovers (increase in IT) is added to the accounting profit (line 2300), and the negative difference (decrease in IT) is subtracted from the accounting profit.

17. Line 2460 “Other” reflects information on other indicators not mentioned above that affect the amount of the organization’s net profit (clause 23 PBU 4/99). If necessary, an organization can enter several additional lines in the Statement of Financial Results, independently naming and coding them.

Line 2460 “Other” of the Statement of Financial Results may reflect:

– taxes paid by organizations applying special tax regimes (Letters of the Ministry of Finance of Russia of 18.08.2004 N 07-05-14/215, of 25.06.2008 N 07-05-09/3);

– Penalties and penalties paid by organizations for violations of tax and other legislation (clause 83 of the Regulation on Accounting and Accounting, Instructions for the use of the Chart of Accounts);

– the amount of income tax additionally accrued (accrued for reduction) in connection with the detection of errors (distortions) in previous reporting (tax) periods, which does not affect the current income tax of the reporting period (paragraph 22 of PBU 18/02);

– other similar obligatory payments;

– the amount of deferred tax assets written off to the debit of account 99 “Profit and Loss” (clause 17 of PBU 18/02);

– the amount of 99 deferred tax liabilities written off to the credit of the account (clause 18 of PBU 18/02);

– differences resulting from the recalculation of deferred tax assets and deferred tax liabilities due to a change in the tax rate for corporate income tax (paragraph 4, paragraph 14, paragraph 3, paragraph 15 of PBU 18/02).

18. Line 2400 “Net profit ( loss )”the final line of the forms “Report on financial results”. The indicator of this article reflects the amount of profit remaining at the disposal of the organization after taxation.

Line 2400 = Line “Profit (loss) before tax” – “Current income tax” +/- “Change in deferred tax liabilities +/- “Change in deferred tax assets” – “Other”.

If the previous lines are filled in correctly, then the result on the line “Net profit (loss)” must match: with the balance of account 99 “Profit and Loss” at the end of the reporting period when preparing interim reporting; from the balance of account 84 “Retained earnings (uncovered loss)” when preparing annual reports.

This stock reflects the balance of account 84 in correspondence with account 99 (or the balance of account 99 in the preparation of interim reporting).

The resulting loss is shown in the Statement of Financial Performance in parentheses.

In the new form of the statement of financial results, the table has been removed – decoding of individual profits and losses, all information is deciphered in the Explanations.

The reference section of the standard form “Statement of financial results” contains five lines.

1. Line 2510 “The result of the revaluation of non-current assets, not included in the net profit (loss) of the period.” This line indicates only the change in the additional capital of the organization, which was the result of the revaluation of non-current assets ( fixed assets, intangible assets, exploration assets ) carried out in the reporting period.

This line indicates only the change in the additional capital of the organization, since the amounts of revaluation (markdown) attributed to the financial result as other income (other expenses) are accounted among others in line 2340 “Other income” (line 2350 “Other expenses”).

When filling in line 2510, the turnover for the reporting period on account 83 “Additional capital” is used in correspondence with accounts 01, 02, 03, 04, 05 and 08. If, in this case, the amount of credit turnover on account 83 exceeds the amount of its debit turnover on these accounts, then as a result of the revaluation of non-current assets, the additional capital of the organization will increase. If the debit turnover exceeds the credit turnover, then in the reporting period there was a decrease in additional capital, which is indicated in line 2510 in parentheses.

2. Line 2520 “The result from other operations, not included in the net profit (loss) of the period.” At the moment, the acts of the accounting regulatory system in our country do not determine which results and from which operations form the indicator of this line.

At the moment, the only example is the difference from the conversion into rubles of the value of the organization’s assets and liabilities denominated in foreign currency used to conduct activities outside the Russian Federation, which is included in the organization’s additional capital (paragraph 2, clause 19 PBU 3/2006).

3. Line 2500 “The total financial result of the period” is defined as the sum of lines 2400 “Net profit (loss)”, 2510 “The result of the revaluation of non-current assets, not included in the net profit (loss) of the period” and 2520 “The result of other operations, not included in the net profit (loss) of the reporting period”.

This indicator is taken from International Financial Reporting Standards. There it is customary to show in the income statement not only profits and losses, but also all transactions of a revaluation nature that are attributed to capital. And the appearance of this indicator in the income statement allows you to transform it into a statement of comprehensive income under IFRS.

Line 2900 and line 2910 are the last two lines of this report concerning joint-stock companies. The procedure for calculating these indicators is given in the Guidelines for the disclosure of information on profit per share, approved by order of the Ministry of Finance of Russia dated March 21, 2000 No. 29n.

4. Line 2900 “Basic earnings (loss) per share” – to be completed only by joint-stock companies. For reference, this line indicates information on the basic profit (loss) per share, which reflects the part of the profit (loss) of the reporting period due to shareholders – owners of ordinary shares.

To calculate this indicator, you need to use the Guidelines for the disclosure of information on profit per share, approved by the Order of the Ministry of Finance of Russia dated March 21, 2000 No. 29n (hereinafter – the Guidelines).

Basic profit (loss) per share is defined as the ratio of the basic profit (loss) of the reporting period to the weighted average number of ordinary shares outstanding during the reporting period. This is established by paragraph 3 of the Methodological Recommendations.

The basic profit (loss) of the reporting period is determined by reducing (increasing) the profit (loss) of the reporting period remaining at the disposal of the organization after taxation and other obligatory payments to the budget and extra-budgetary funds by the amount of dividends on preferred shares accrued to their owners for the reporting period.

The weighted average number of ordinary shares outstanding during the reporting period is determined by summing up the number of ordinary shares outstanding on the first day of each calendar month of the reporting period and dividing the resulting amount by the number of calendar months in the reporting period.

5. Line 2910 “Diluted earnings (loss) per share” to be completed only by joint-stock companies. For reference, this line shall indicate information on diluted earnings (loss) per share, which reflects a possible decrease in the level of basic earnings (increase in loss) per share in the next reporting year (in the event of the conversion of all convertible securities of a joint-stock company into ordinary shares or in the event of the execution of all agreements purchase and sale of ordinary shares from the issuer at a price below their market value).

Profit dilution is understood as its decrease (loss increase) per one ordinary share as a result of a possible issue of additional ordinary shares in the future without a corresponding increase in the company’s assets.

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