1. If the enterprise loses money, it can make up for it with the pre-tax profit of the next year. If the profit in the second year is insufficient, it can continue to make up for it in five years.
2 losses incurred by the enterprise, if the pre-tax profit is insufficient within five years, shall be made up with the after-tax profit.
3. The losses incurred by the enterprise can be made up by surplus reserve.
Using pre-tax profits or after-tax profits to make up for losses does not require special accounting treatment. As long as the profits realized by the enterprise are carried forward from "current year's profits" to the credit of "profit distribution-undistributed profits", the credit amount and debit balance of "profit distribution-undistributed profits" will naturally offset; The difference is that in the case of making up losses with pre-tax profits, the amount made up can be deducted from the current taxable income of the enterprise, while the amount made up for losses with after-tax profits cannot be deducted from the current taxable income of the enterprise. However, if the surplus reserve is used to make up for the losses, it is necessary to carry out accounting treatment, debit the "surplus reserve" account and credit the "profit distribution-surplus reserve to make up for the losses" account.
Second, accounting treatment to make up for losses
Enterprises shall conduct accounting in accordance with the accounting system and accounting standards. If the book profit of that year is negative, it is a "loss" in accounting. Like realizing profits, enterprises should transfer the losses incurred this year from the subject of "current profits" to the subject of "profit distribution-undistributed profits":
Debit: profit distribution-undistributed profit
Loan: profit this year
The debit balance of the "profit distribution" subject after carry-over is the amount that has not made up for the loss. Then make up for the loss through the "profit distribution" account.
The losses incurred by the enterprise can be made up by the pre-tax profits realized in the following year. If the pre-tax profits realized in the following years are used to make up for the losses in the previous years, the profits realized in that year will be transferred from "profits of this year" to the subject of "profit distribution-undistributed profits", namely:
Debit: this year's profit
Loan: Profit Distribution-Undistributed Profit
In this way, the profits realized this year will be carried forward to the credit of the "Profit Distribution-Undistributed Profit" account, and the credit amount will naturally offset the debit balance of the "Profit Distribution-Undistributed Profit" account. Therefore, there is no need for special accounting treatment when the net profit realized in that year makes up for the uncompensated losses carried forward from previous years.
Due to different reasons such as the formation time of uncompensated losses, some of the uncompensated losses in previous years can be made up with the pre-tax profits realized in the current year, and some must be made up with the after-tax profits. No matter whether the loss is made up by pre-tax profit or after-tax profit, the accounting treatment method is the same, and no special accounting entries are needed. However, if the surplus reserve is used to make up for the losses, it is necessary to carry out accounting treatment, debit the "surplus reserve" account and credit the "profit distribution-surplus reserve to make up for the losses" account.
Third, the tax treatment to make up for the losses.
Article 18 of the Enterprise Income Tax Law of People's Republic of China (PRC) (Order No.63 of the President of the People's Republic of China) stipulates: "The losses incurred by an enterprise in the tax year are allowed to be carried forward to the following year, and the income from the following year is used to make up for them, but the maximum carrying-forward period shall not exceed five years." According to Guo Shui Fa [1997] 189, "the concept of loss referred to in the tax law is not the loss reflected in the financial statements of enterprises, but the amount of loss in the financial statements of enterprises adjusted by the competent tax authorities according to the provisions of the tax law." The "five years" here refers to the time limit for making up losses when calculating taxes, which only affects the calculation of taxable income and is not limited by the "five years" time limit in making up losses accounting. Accounting, whether it is profit or loss, the balance of the "current year's profit" account is carried forward to the "profit distribution-undistributed profit" account at the end of the period. The balance of "profit this year" here refers to the net profit after deducting income tax expenses.
How to make up for the losses in previous years without losing money? Article 18 stipulates: "The losses incurred by an enterprise in the tax year may be carried forward to the following year to be made up by the income of the following year, but the longest carrying-forward period shall not exceed five years."
The above two provisions all illustrate one thing: enterprises can make up for the losses in previous years (the first five years) with pre-tax income. What needs to be clear here is:
"Allowable losses in previous years" and "the maximum carry-over period shall not exceed five years" shall not exceed five years. For example, suppose an enterprise lost 500,000 yuan in 2008, and the income before making up the loss in the next five years is 50,000 yuan in 2009, 70,000 yuan in 20 10, 90,000 yuan in 20 10, and 20 12 years 120,000 yuan respectively. Therefore, there is no need to pay enterprise income tax from 2008 to 20 13. In five years, * * * made up for the loss of 480,000 yuan, leaving a loss of 20,000 yuan. By the sixth year, that is, 20 14 years, the income before compensation is180,000 yuan. Can 20 14 make up for the loss of 20,000 yuan? The answer is no, because the tax law stipulates that it can only be made up within five years after the loss-making year. In the sixth year, if the loss five years ago has not been made up, it cannot be made up before tax, and it can only be made up with after-tax profits.
There is no need to make entries to make up for the losses in previous years.
If there is a loss in the previous year, it is naturally the debit of the profit distribution-undistributed profit account, that is, the debit balance of the undergraduate purpose. When this year's profits cover losses, the accounting entries are as follows
Borrowed profit this year
Loan profit distribution-undistributed profit
The credit amount of this account will offset the debit balance, that is, make up the loss.
There is no need to pay enterprise income tax in advance in the first quarter of 2009, because there is a "loss to be compensated in the previous year" of 30,000 yuan this year, and this year's profit is 450 yuan.
According to the "Actual Profit" in Line 4 of People's Republic of China (PRC) Enterprise Income Tax Monthly (Quarterly) Prepaid Tax Return (Class A) [the original (Class A) table is the total profit, and the new (Class A) table is changed to "Actual Profit"]: fill in the balance of the total profit calculated according to the accounting system after deducting the losses to be made up, tax-free income and tax-free income in the previous year.
Therefore, the total profit in 2009 1 quarter is still a loss after deducting the losses to be made up in previous years. Namely: 450-30000 =-29550 yuan, and enterprise income tax shall not be paid in advance in 2009 1 quarter. However, according to the Detailed Rules for the Implementation of the Law on the Administration of Tax Collection, your company must submit the Monthly (Quarterly) Prepaid Tax Return of Enterprise Income Tax in People's Republic of China (PRC) (Class A) to the competent tax authorities, that is, make a "zero" declaration and attach financial and accounting statements.
As a tax official, I tell you that your company does not need to pay enterprise income tax in the first quarter.
When paying income tax in advance, the following accounting entries should be made
Accrual:
Debit: income tax expense
Loan: tax payable-enterprise income tax payable
At the end of the period, the following accounting entries should be carried forward:
Debit: this year's profit
Credit: income tax expense
Just settle directly.
According to the regulations on time and loss compensation, the loss of the previous year can be compensated in the next five years. The profit in 20 10 is 200,000, and the enterprise income tax has been paid and the profit has been distributed, which has nothing to do with the loss of 500,000 in 20 1 1 year. Therefore, the loss of 20 1 1 year is 500 yuan, and the amount that can be carried forward is 500,000 yuan (of course, tax adjustment is required in 20 1 1 year, that is to say, the loss of 500,000 yuan in 201year is accounting profit, and the enterprise income tax is settled and paid.