What Is an Assignment of Proceeds?

Income distribution is also called "income distribution". Rural cooperative economic organizations will distribute the annual net income among the state, collectives and individual farmers. There are two forms of total distribution of monetary amounts and physical distribution of agricultural products. In the past, China's rural areas implemented a basic accounting unit income distribution system. The allocation procedure is: The first step is to subtract the total income from the total income to obtain the net income. In the second step, the net income is divided into the following three parts: (1) State taxes; (2) Collective retention, including provident funds, public welfare funds, production funds, reserve food funds, etc .; and (3) personal income of farmers. In the third step, the individual income of the peasants is distributed to the peasant households in accordance with the labor points allocated by the peasant households. The fourth step is to organize the distribution of cash. After the full implementation of the household contract management, the distribution of the income of the rural economy is mainly a problem of accounting. ^[1]

Income Distribution

EBIT is the main object of corporate income distribution. EBIT should be determined by

Make up the company's previous year losses

If the company's statutory surplus reserve fund is not sufficient to make up for the losses of the previous year, the profits of the current year should be used to make up for the losses before drawing the provident fund.

If an enterprise suffers an annual loss, it can be made up with the pre-tax profit of the next year; if the pre-tax profit of the next year is not enough to make up, it can be made up with the pre-tax profit for 5 consecutive years; make up.

Withdrawal of statutory surplus reserve

The statutory surplus reserve is withdrawn at 10% of profit after tax (after making up for losses). When the total accumulated reserve fund has reached 50% of the registered capital, it may no longer be withdrawn.

Withdrawing arbitrary provident funds

After an enterprise withdraws its statutory provident fund, if the company's articles of association have provisions on the withdrawal of any provident fund, it will withdraw any provident fund in accordance with the provisions;

Distribution of profits to investors

The after-tax profits of the enterprise make up for the losses, withdraw the balance of the surplus reserve fund, plus the undistributed profits at the beginning of the period, which are the profits that investors can distribute. Enterprises are allocated according to the proportion of capital contribution of owners or the proportion of shares held by shareholders. How much profit a company distributes to investors depends on its profit distribution policy.

An enterprise may make use of a defined surplus reserve fund and an arbitrary surplus reserve fund to make up losses or transfer capital. The retained portion after the capital increase shall be limited to a statutory reserve fund of not less than 25% of the registered capital before the capital increase.

Sequence of income distribution of a company limited by shares:

1. Abide by the rules of discipline and distribution according to law (focusing on handling all aspects of interest). In accordance with the national financial and economic regulations, profits are distributed according to procedures and proportions. The distribution of corporate income must be carried out according to law. In order to regulate the income distribution of enterprises and protect the legitimate rights and interests of various stakeholders, the state has promulgated relevant regulations. These regulations stipulate the basic requirements, general procedures and important proportions of an enterprise's income distribution, and they should be implemented carefully and must not be violated.

2. The principle of focusing on accumulation and distribution (focusing on the relationship between the long-term and short-term interests of the enterprise). Correctly handle accumulation and

1. Risks of failure to raise funds required for investment in time

When the industry fails to predict the investment time and required funds, the company may over-distribute

Factors affecting income distribution policy:

Financial management requirements for income distribution:

(I) Annual profit distribution order

According to Article 50 of the "General Principles of Corporate Finance", the net profit of an enterprise shall be distributed in the following order:

1. Make up for previous year losses. The net profit realized by an enterprise must first make up for the losses incurred five years ago. Before the losses of the enterprise five years ago are not made up, the enterprise may not withdraw statutory reserve funds. It should be noted that, in actual work, no matter whether the profit before tax or the profit after tax is used to make up for the losses, the company does not conduct separate accounting treatment.

2. Withdraw 10% statutory provident fund. The net profit realized by the enterprise this year after making up for the accumulated losses at the beginning of the year, a 10% statutory reserve fund is accrued. After the accumulated total reserve fund has reached 50% of the registered capital, it can no longer be withdrawn.

According to the "Sino-Foreign Joint Venture Law", the withdrawal ratio of reserve funds, employee welfare funds and incentive funds, and enterprise development funds drawn by foreign-invested enterprises shall be determined by the board of directors. Among them, the reserve fund withdrawn by a foreign-invested enterprise is equivalent to the statutory provident fund of the enterprise. It should be managed in accordance with the statutory provident fund. Its uses include making up losses, increasing capital, and investing in reproduction. Similarly, before a company's losses are made up, it is not allowed to withdraw statutory provident funds or distribute dividends to investors.

3. Withdraw any arbitrary provident fund. After an enterprise withdraws its statutory provident fund, if the company's articles of association have provisions on the withdrawal of any provident fund, it will withdraw any provident fund according to the provisions of the company's articles of association; State-owned enterprises calculate the surrender of state profits based on the ratio approved by the government or the competent financial institution and other relevant departments and institutions. The balance after deducting the statutory provident fund and the return of profits is managed as an arbitrary provident fund. State-owned enterprises can also combine arbitrary provident fund and statutory provident fund for withdrawal.

4. Dividends. An enterprise shall distribute profits to investors in accordance with the principle of "equal shares and equal rights, and equal shares and equal profits". If the enterprise does not have net profit after tax, after making up the losses with the surplus reserve fund, the company limited by shares that year may distribute dividends using the surplus reserve at a ratio not exceeding 6% of the par value of the stock.

(2) Financial management regulations for employee element allocation

The new (Article 52 of the General Financial Regulations of the Enterprise) stipulates that if business operators and other employees participate in the distribution of corporate income with management, technology and other factors, they shall stipulate distribution methods in the articles of association or relevant contracts in accordance with relevant state regulations, and Differential treatment: Those who have obtained corporate equity will be distributed with other investors for corporate profits; those who have not obtained corporate equity will be expensed from current expenses within the profit limit and distribution standards achieved by the relevant business.

The so-called acquisition of corporate equity and the distribution of corporate profits with other investors refer to the distribution plan implemented by the company through the option incentive mechanism to corporate managers, core technical personnel and other employees as the object of income distribution.

In actual work, after determining the objects and intellectual elements involved in the distribution of income, the company evaluates intellectual elements such as management, non-patented technology and other technologies, and uses them as a reference basis for the distribution of equity incentives. The form of transfer is transformed into corporate equity, and the operator and other employees holding intellectual elements also have the status of corporate investor. In this way, these employees also participate in profit distribution like other actual shareholders.

If the so-called enterprise equity is not obtained, it shall be included in the current expenses within the profit limit and distribution standard realized by the relevant business. That is to say, the enterprise has used management and technology held by the operator and other employees to achieve additional benefits, but has not granted equity. When they cannot distribute dividends as an enterprise investor, the enterprise should allocate according to the relevant contract. Standard, the profit realized by the related business of the cooperative operation shall be divided, and the current amount shall be calculated as the cost.