Each organization has its own capital, which is determined by the difference between the amounts of assets and the external liabilities of the enterprise. It includes some components. In addition, it can be either constant or variable. Moreover, its variable part depends on the financial result of all activities of the organization, and reserve capital is created at its expense.
Thus, one of the constituent parts of capital is the organization’s reserves, which are necessary to cover unexpected unforeseen expenses caused, for example, by a crisis state. This is due to the fact that any economic decision to one degree or another is associated with some risk, with possible losses from the activities carried out. Moreover, losses can be triggered not only by objective but also by subjective factors.
That is why in order to ensure stability in the economic development of the organization, some of the results obtained should be put aside in reserve. In the asset of the balance sheet of the enterprise, these reserved values are accounted for in the current turnover, but in the liability they are reflected as a credit balance of 82 accounts. Thus, reserve capital is an “untouchable” part of cash that should never be reduced. It is formed from profit. When defining the concept of “reserve capital”, it should be clarified that this is part of the organization’s profit to be distributed, on which restrictions are imposed by the owner of the enterprise or legislation on the options for its use. In this case, the amount of deductions from profit is established individually in each organization.
All deductions made from profit to the reserve capital are reflected in 82 credit accounts, and the expenditure of its funds is indicated in the debit of this account. Correspondence is conducted with 84 accounts.
Particular attention must be paid to the use of funds that contain reserve capital. Often, their use is proposed for the repurchase of shares and redemption of bonds. However, from the perspective of accounting logic, such actions are unacceptable. This is explained by the fact that losses during these operations must first be displayed on the accounts of financial results, and then covered by the capital of reserves. In addition, the reserve capital for a loan of 82 accounts at the enterprise may have a rather large amount, but in fact there are no funds at the cash desk and in bank accounts, so there can be no talk of buying back shares, or paying off bonds.
The reserve capital of a joint stock company is formed depending on its charter. Moreover, its minimum size must be no less than 15% of the total equity of the enterprise. If the organization has foreign investment, then the size of the reserve should reach at least 25%. The reserve capital is replenished to the amount established by the charter through annual deductions of a mandatory nature. They should be 5% of the net profit remaining at the full disposal of the organization after all taxes and other obligations have been paid. A reserve is formed only in order to be able to cover the losses of the joint stock company accumulated during the reporting year, and not for any other purpose. At the same time, the balances of reserve capital that were not claimed are transferred to the next year.
It must be said that the mandatory formation of a reserve is peculiar only to joint-stock companies. Many other organizations should not create it. However, they can do this in accordance with accounting policies or constituent documents. This situation is stipulated by the legislation.