How are distributable profits calculated for private companies?

Distributable profits for private companies are calculated using accumulated realized profits and accumulated realized losses. This definition aligns with company law requirements that determine the amount of profit available for distribution to shareholders. Accumulated realized profits refer to profits that have been recognized as income and can be used for dividend payments, while accumulated realized losses are subtracted from this amount since they reduce the overall profits that can be distributed.

The reason why this option is most accurate is that it specifically focuses on the financial performance that has been fully realized and appropriately categorizes the transactions affecting those profits. Accumulated realized profits signal actual gains that the company has made over time, which have not been offset by equal losses, thereby giving a clear indication of the funds available to distribute.

Other options may provide different insights into financial positions or different calculations, but they do not adhere to the specific legal accounting framework for determining distributable profits as outlined in company law, making the first choice the correct and most relevant response.