Voittovarauksen

Voittovarauksen, or voittovaraukset, is a term used in Finnish corporate accounting to describe a portion of a company's net profit that is retained and allocated to an equity reserve rather than being distributed as dividends. The reserve forms part of shareholders’ equity on the balance sheet and is typically created by a decision of the annual general meeting or the board when closing the books for the financial year. The purpose is to strengthen the company’s financial position, smooth out future profit fluctuations, or finance planned investments and other strategic needs without increasing debt.

In practice, an amount from the realized profit is transferred to the voittovaraukset line in equity. This reduces distributable profits but does not constitute a liability. The rules governing voittovaraukset are set out in Finnish accounting standards and company law; allocations must be documented in the financial statements and notes, including the purpose and any restrictions attached to the reserve.

Tax considerations follow general corporate tax rules: profits are taxed for the year, and the existence of voittovaraukset affects only the amount of profit that may be distributed to shareholders, not the year’s tax liability. The use of a voittovarauks is constrained by solvency considerations; a company must maintain sufficient liquidity to meet obligations before distributing profits.