Statement of Retained Earnings or Accumulated Losses DLPA – 30097

Statement of Retained Earnings or Accumulated Losses (DLPA)

The DLPA highlights the changes that occurred to the Net Equity in the balance of the retained earnings and accumulated losses account. According to article 186, paragraph 2 of Statute no. 6,404/76, transcribed below, the company may, at its option, include the statement of retained earnings or accumulated losses in the statements of changes in the net equity.

"The statement of retained earnings or accumulated losses shall indicate the amount of the dividend per share of capital stock and may be included in the statement of changes in net equity if prepared and published by the company." 

OTHER COMPANIES

DLPA is mandatory for limited companies and other types of companies, according to the Income Tax legislation (art. 274 of RIR/99).

COMPOSITION

The statement of Retained Earnings or Accumulated Losses shall itemize:

1. the balance at the beginning of the period and prior year adjustments;

2. the reversal of reserves and net earnings for the fiscal year; and

3. the transfers to reserves, dividends, the portion of profits incorporated into capital, and the balance at the end of the period.

ADJUSTMENTS OF PREVIOUS FISCAL YEARS

As fiscal year adjustments, only those that happened as an effect of a change in accounting criterion or rectification of an error attributable to a previous fiscal year that cannot be attributed to subsequent facts are considered.

 
REVERSAL OF RESERVES

They correspond to the changes in the accounts that register the reserves, through the reversal of amounts to the Retained Earnings account, because those amounts are no longer used.

NET EARNINGS OR LOSS FOR THE FISCAL YEAR

It is the net result of the year calculated in the Fiscal Year Income Statement, whose value is transferred to the Retained Earnings account.
 

TRANSFER TO RESERVES

These are the appropriations of earnings made for the constitution of equity reserves, such as legal reserve, statutory reserve, unrealized profit reserve, reserve for contingencies.
 

REPLACEMENT BY THE STATEMENT OF CHANGES IN NET EQUITY 

According to paragraph 2 of article 186 of Statute no. 6,404/76, the Statement of Retained Earnings or Accumulated Losses may be included in the statement of changes in net equity, if prepared and disclosed by the company, because it includes not only the transactions of the retained earnings or accumulated losses account but also that of all other net equity accounts.