Every year, this exercise is carried out until the legal minimum of the reserve is reached, and from now on, the company is free to continue using the funds or not to use them or less than 10% if it prefers. Remember that the reserve is taken from the profits of the year, so the data set or accounting would look like this: this type of accounting we can say that it corresponds to the most basic form, but there may be variations in accounting, for example, if goods are contributed or if there is a subscribed capital and another to subscribe. or subscribed receivables. Once the company has been incorporated before the respective Chamber of Commerce, the first registration that gives the company the opening must be counted, usually on the basis of the so-called opening balance sheet. In addition to the legal obligation of reserve, there are legal reservations that the company has taken into account in its statutes or statutes. We separate the different accounts that are established by color: at the time of incorporation of the company or subsequently by resolution of the general meeting, a legal reserve can be constituted for the purposes that the shareholders deem appropriate. The recommended disadvantage and disadvantage is that if you want to sell on credit, you need to know the buyer very well (ask for a copy of the RUT) to take into account the taxes and deductions at the source of the case. This reserve is made when shares of the parent company are acquired or accepted as security. In addition, these reservations are not available for the duration of this situation. How is a customer`s shipment shipped? Basically, reserves are profits that the company has made and that have not been distributed among its owners. However, this concept is only valid from a broad perspective, since a subdivision of the different classes of reserves can be made according to their origin.

Articles 74 et seq. of the TRLSA govern the treatment of own shares or own shares of companies. Although this chapter does not address the content of these articles, it must be clear that the acquisition of own shares is a lawful transaction and, if carried out, there will be an effective reduction in the number of shares, which the law aims to mitigate by providing a reserve of an unavailable nature for the amount of own shares acquired and which will remain on the balance sheet. as long as there is no alienation of the same. On the other hand, there are the legal reservations, as its name suggests, are those indicated in the statutes of the company; Unlike the legal reserve, the rules of this type of reserve are indicated by the partners, such as the amount and purpose of it, and they are no longer mandatory in the following cases: for a correct presentation of the annual financial statements, it is necessary that the corresponding accounting documents are prepared in such a way that the final amount of the legal reserve is reflected. also to transfer the balance of the profit account for the year to the accumulated profits. This legal reservation is mandatory until it remains in force, so if it is to be abolished, the statutes or statutes must be amended. To avoid this, it is necessary to assess the opportunity cost of building up reserves, which will allow us to know whether, on average, these reserves will represent a greater benefit to partners than the dividends they have not received. In this case, the amount of $28,715.00 will be deducted from the 2019 fiscal 2019 earnings to increase the statutory reserve, which will generate an amount of $60,000.00, representing one-fifth of the Company`s share capital. The legal reserve covers losses if there are no other reserves for this purpose; The legal obligation to reserve is mandatory in public limited companies under the provisions of Article 452 of the Commercial Code, a situation that is not based on the simplified joint-stock company, since in this type of company, the constitution of the legal reserve for shareholders is optional.

For example, suppose it has a deferred tax liability of $8,000,000 on a corporation`s balance sheet for the previous fiscal year; and that at the end of the new fiscal year, the deferred tax recalculation is $10,000,000. In this sense, the statutory reserve is constituted after approval of the annual financial statements by the assembly. Below is a brief description of each reserve mentioned in this block. `Public limited companies shall constitute a legal reserve of at least fifty per cent of the subscribed capital, consisting of ten per cent of the liquid profit for each financial year.` All goods and rights are accounted for in their purchase price or costs of production. – Reserves are a source of financial resources whose remuneration is not strictly necessary. The legal reserve is nothing more than a forced saving that companies must make on the instructions of the law. It is formed when profits are made during the year to protect the inheritance and not to distribute dividends on all profits made. Third parties may require its creation: In addition to shareholders, the company`s creditors may collectively require the integration of the statutory reserve How is the acquisition of fixed or tangible fixed assets accounted for? The common feature of these bookings is that they occur when the company has made a profit.

When this has been done, the account expressing the benefit (129, “Profits and losses”) has a balance, and if it is agreed to transfer to any type of reserves above, an entry of the following type will be made: How are payments accounted for electronically (PSE, TC, PAYU)? In a society, there may be different types of reserves that may coexist and have a different purpose; On the one hand, the Commercial Code refers to the legal obligation of reserve, which is nothing more than the obligation of the company to hold ten percent of the profit of each financial year, up to fifty percent of the subscribed capital, in which case it will not be necessary to continue to deduct from the ten percent of the profits mentioned. If it is a product sold, the cost of sale is usually taken into account immediately. According to the table above, the increase in accumulated depreciation will be 1,200 or more. The difference between the two updated accounts indicates the resulting revaluation reserves. The general rule for the constitution of the legal reserve established in the Commercial Code stipulates that this value is at least fifty percent of the subscribed capital, and each year ten percent of the profit, or 10% of the profit after tax, is affected. The reservation prescribed by law expires with the conclusion of the obligation of 100% introduced, as in the legal reserve disadvantages 1. Disadvantages for shareholders If the constitution of reserves is too large, the shareholders are not remunerated for their contribution to the company. 2.

Disadvantages for the company – The fact that self-financing reduces dividends can have a negative impact on the profitability of shares. – the profitability of the capital concerned due to the financial leverage effect. This statutory reserve is recorded in the following period after the closing of the accounts, as the proposal for the distribution of liquid profits of the previous year is presented and approved at the next ordinary meeting of the highest decision-making body (which usually takes place in March of the following year). Keep in mind that if the sale is settled on credit and the source deductions that the buyer would make are not taken into account, these deductions must be taken into account in the payments made, making it difficult to determine that the rents are caused in the same year between the buyer and the seller when the debt passes from one year to the next. The legal obligation of reserve in the joint-stock company is provided for in Article 452 of the Commercial Code: the purpose of the reserve is to protect the assets of the company, so it can not be used other than this eventuality or contingency. It is important to note that if the legal reserve is distributed for purposes other than those of their capitalization, the director can repeat to the shareholders the value of what is delivered to them, and the legal reserves have the same origin as the voluntary reserves, since they are constituted from the profits of the year, but its foundation is motivated by an agreement of the owners of the company, which is reflected in the articles of association of the company.