Profits available for distribution
Companies Act 2006 section 830 generally limits distributions to accumulated realised profits, so far as not previously distributed or capitalised, less accumulated realised losses so far as not properly written off in a capital reduction or reorganisation. Further rules apply, including additional restrictions for public companies and the use of relevant accounts. Current-year revenue less expenses alone is not the statutory calculation.
Worked example
A company has accumulated realised profits of £90,000 not previously used and accumulated realised losses of £30,000 not properly written off. Its simplified section 830 amount is £60,000, before checking the other legal requirements and relevant accounts.
Common mistake
Equating this figure with current-year accounting profit, cash in the bank or total retained earnings without examining realised amounts and statutory adjustments.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | LW (GLO) | Direct | September 2026–June 2027 |