What is Unappropriated Profit?

Undistributed profits (Undistributed profits): Undistributed profits are profits that the company reserves for future years to distribute or to distribute. ^[1]

undistributed profit

Undistributed profits (Undistributed profits): Undistributed profits are profits that the company reserves for future years to distribute or to distribute. ^[1]

Substantial test procedures for undistributed profits generally include:

1.Check

Errors and checks of undistributed profits:

Undistributed profit reflects the profits realized by the enterprise, accumulated in the enterprise, and not distributed to the owners of the enterprise. The undistributed profits of an enterprise include two meanings: this portion of profits is not distributed to the owner of the enterprise; this portion of profits is not designated for use.

Accounting errors of undistributed profit accounts are often related to profit formation,

Development in the decade from 2001 to 2010:

In 2001, the total undistributed profit of listed companies was 48.306 billion yuan, and the annual dividend was 42.974 billion yuan. The proportion of dividends was as high as 88.96%. After ten years of development, the total undistributed profits of listed companies in 2010 increased to 3.063555 billion yuan, with an annual dividend of 499.430 billion yuan, accounting for only 16.30% of the dividends.

The above data shows that although the amount of dividends has increased by 10.62 times in ten years, it still looks dwarfed compared with the increase of 62.42 times of total undistributed profits. The substantial increase in dividends is mainly due to the increase brought by market expansion. The "dividends" of sustained and rapid growth in listed company performance have not been clearly reflected in the dividend ratio.

Listed companies have absorbed a large amount of shareholders' funds through IPOs and refinancing. However, after the expansion, shareholders have a relatively limited amount of dividends from listed companies. Listed companies and stockholders are two stakeholders. At the beginning, stockholders invested a lot of money in listed companies, and only then did the big development of listed companies; and after the development of listed companies, they vigorously gave back to shareholders through dividends. Righteousness.