This activity shows the main parts in which the State of Origin and Application of Utilities is used. It also explains that it is not a basic financial statement, it also mentions that it is a statement that does not exist if not only in the author of the book in which this research is elaborated; its concept, characteristics, format and the origin from which this financial statement comes, why its specific elaboration, its objective and purpose comparing it with the Statement of Change in Equity from which this financial statement is made, which will be discussed below.
GENERAL PURPOSE :
To demonstrate the purpose that the State of Origin and Application of Utilities and why it analyzes the operations of the profits generated by a company or economic entity in which they are reflected in the Statement of Change in Equity.
SPECIFIC:
Mention the characteristics of the Financial Statement of Origin and Application of Profits and its main definition.
Analyze the use of this aforementioned financial statement, determining the basis; mentioning why it is not a component of the financial statements according to IAS.
WHAT IS A STATE OF ORIGIN AND UTILITIES APPLICATION?
It is a financial statement that analyzes the operations generated by the capital gains of the shareholders, explaining the destination that said capital will have.
WHAT DOES THE STATE OF ORIGIN AND UTILITIES APPLICATION REPRESENT?
It shows the origins of the profits and the application of the same of a society or economic entity in a period or past, present or future exercise.
WHAT ARE THE CHARACTERISTICS OF THIS FINANCIAL STATEMENT?
- It is a financial statement. It shows the origin and application of profits, dividends or returns. The information corresponding to a past, present or future (dynamic) exercise.
WHAT ARE THE PARTIES DIVIDED IN THIS FINANCIAL STATEMENT?
- Header:
- Name of the company. Denomination of being a State of Origin and Application of Utilities or:
State of Origin and Application of Dividends;
State of Origin and Application of Returns, etc.
- The corresponding exercise (past, present or future). Body:
- Remainder of previous years. Net profit for the year. Application of profits. Remains for future years.
- Foot:
Name and signature of the accountant, auditor, analyst, etc.
STRUCTURE OF A STATE OF ORIGIN AND APPLICATION OF UTILITIES.
| Company name
State of Origin and Application of Utilities For the year ended December 31. |
|||
| Origin of profits
Remnants of previous years… More: Usefulness of this exercise. Sum Less: Utilities application To the Legal Reserve… To the Amortization Reserve Of Privileged Shares. To the contractual Reserve. Sum Profits Payable To shareholders¹ Remaining for the following year |
$ 10,000.00 $ 15,000.00 $ 5,000.00
$ 20,000.00 $ 190,000.00 |
$ 23,000.00 $ 200,000.00 $ 223,000.00 $ 210,000.00
$ 13,000.00 |
|
| Formulo:
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He analyzed:
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Application of profits approved by the General Assembly of Shareholders., Why is it said that the state of origin and application of profits is a financial statement that does not exist and that is not basic?
In International Accounting Standards 1 (IAS 1) in numeral 8, it establishes the components of the financial statements that are:
- Balance; Income Statement; A Statement of Change in Equity that shows: All changes in equity or changes in equity other than the percentages of transactions with the owners, when they act as such;
- Cash flow statement; yNotes to the financial statements.
Starting from that point. We can determine that the “State of Origin and Application of Utilities” is only mentioned by (Abraham Perdomo Moreno; main author of the book; ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS). Therefore, it is explicit why it is not a basic financial statement used by all accountants and economic entities and companies, since IAS 1 cannot be a basic financial statement.
Therefore, we can say that within the basic financial statements dealt with by IAS 1, there is the “Statement of Changes in Equity”, so the State of origin and application of profits analyzes the part of accumulated and current profits, reserves, and taxes; to know the remainder of distribution to shareholders or for its capitalization.
In other words, the statement of origin and application of profits is a means to provide information on the profitability of the company, interpreting the profits obtained for decision-making in the present and past accounting period.
Once knowing the remainder for the following year, the company's board of directors may choose to decree the profits or simply capitalize them to increase their working capital.
STRUCTURE OF A STATE OF CHANGES IN EQUITY.
Documentos y Digitales de El Salvador, SA de CV
(Salvadoran company, subsidiary of distribuidora fotografica, SA with domicile in the Republic of Guatemala)
Statement of changes in Equity
Years ended December 31, 2005 and 2004
| Capital | Reservation | Utilities | Reservation of | ||
| Social | legal | Withheld | capital | Total | |
| Balance as of December 31, 2003 | $ 640,000 | $ 128,000 | $ 2,173,818 | - | $ 2,941,818 |
| net profit - year 2004 | - | - | $ 322,458 | - | $ 322,458 |
| Balance as of December 31, 2004 | 640,000 | 128,000 | 2,496,276 | - | 3,264,276 |
| Capitalization of profits | 2,289,807 | - | (2,289,807) | - | - |
| Complementary capital contribution | 22 | - | - | - | 22 |
| Capital reserve for deemed cost | - | - | - | 2,028,816 | 2,028,816 |
| Deferred income tax | |||||
| generated by deemed cost | - | - | - | (182,787) | (182,787) |
| net profit - year 2005 | - | - | 484,533 | - | 484,533 |
| Transfer of legal reserve | - | 57,997 | (57,997) | - | - |
| Balance as of December 31, 2005 | $ 2,929,829 | $ 185,997 | $ 633,005 | $ 1,846,029 | $ 5,594,860 |
CONCLUSION
This financial statement focuses only on the retained earnings account of the Statement of Change in Equity; in order to analyze and interpret the operations that are generated in the capital of a company or economic entity; however this is a financial statement taken from the account of other basic financial statement components of the IAS. 1, therefore this State of Origin and Application of Profits we can say that it is like a detailed explanation of the movement occurred in a real period of the capital of the shareholders.
BIBLIOGRAPHY:
- Analysis and interpretation of financial statements. Author: Abraham Perdomo Moreno.
- NIC. one
