Petryshyn Lyudmyla, Doctor of Sciences in Economics, Associate Professor, Professor of Department of Accounting, Analysis and Control, Ivan Franko National  University of Lviv, Lviv, Ukraine

ORCID ID: 0000-0002-1871-2837
e-mail: lydkar@ukr.net

Cheban Yuliia, PhD in Economics, Associate Professor, Associate Professor of the Accounting and Taxation Department, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0002-8231-2918
e-mail: cheban200180@ukr.net

Brigadier Anastasia, applicant higher education, Mykolayiv National Agrarian University, Mykolaiv, Ukraine

ORCID ID: 0009-0004-4500-9401
e-mail: an.kram.v@gmail.com

Tushnytska Sofia, applicant higher education, Ivan Franko National  University of Lviv, Lviv, Ukraine

ORCID ID: 0009-0002-5538-9562
e-mail: tushnitska2001@gmail.com

Accounting for the distribution of profits of a subsidiary

Abstract. Introduction. Any business entity functions for the purpose of obtaining profit, therefore the peculiarities of its formation and distribution occupy an important place in the organization of the enterprise’s activities and in the accounting process. It is appropriate to take into account the peculiarities, in particular, of subsidiaries.

Purpose. The purpose of the scientific research is to determine the organizational and accounting features of the distribution of profits of the subsidiary, as well as to determine directions for their improvement.

Results. The theoretical and legislative-normative aspects of the creation and functioning of subsidiaries, which affect the peculiarities of profit distribution, are considered. The peculiarities of the distribution of the net profit of the subsidiary are that the directions, volumes, terms of the distribution of the net profit are decided and approved exclusively by the parent company. It was established that studies of the formation and use of profit and accounting of such operations were carried out by Ukrainian and foreign scientists without taking into account the peculiarities of the subsidiary. It was determined that the organization of activities and accounting, the selection of the taxation system, the preparation of financial and other forms of reporting of the subsidiary does not differ from any business entity. Organizational and accounting features of subsidiary enterprises have been formed in terms of the distribution of their profits. The peculiarity is that the subsidiary has the status of a legal entity, but is under the control of the parent company. It also has relationships with the parent company that affect the distribution and accounting of profits. Features of accounting display and documentation of profit distribution are given. Some economic operations on the distribution of profit are reflected in the accounting of the subsidiary enterprise, some – of the parent enterprise, some – in the accounting of both enterprises. The plane of intersection of the specified economic transactions in the accounting of the subsidiary and parent enterprises was determined. It is proposed to use a sub-account to display internal calculations. This will allow you to control the results of the calculations and correctly calculate the profit. The expediency of using an internal reporting form has been proven. It should display information about income, expenses, internal calculations, financial results, profit distribution. Stages of accounting and control of profit distribution of subsidiary and parent enterprises are proposed.

Conclusions. An important component in the accounting of a subsidiary is the consistency and accounting of profit distribution. The importance and complexity of such a process is that the subsidiary and parent company have internal calculations. Such calculations must be reflected on a separate account. Dependence on the parent company should be controlled using internal reporting. The main stages of accounting for profit distribution of a subsidiary: profit planning, calculation and display of profit in accounting, determination of directions and terms of profit distribution, documentation of profit distribution, formation of internal information and financial reporting, analysis of the efficiency of profit distribution.

Keywords: subsidiary, parent company, profit sharing accounting, internal calculations.

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