What is reflected in the credit of account 96. Accounting for reserves for future expenses
In accounting, all enterprises, with the exception of simplists, must create reserves for future periods. To account for the amounts transferred to replenish reserves, account 96 “Reserves for future expenses” is used. Types of formed cash reserves and methods of their calculation are fixed in the accounting policy. For tax accounting, reservation of funds is not required.
Account 96 in accounting: general information
A reserve account is necessary for accounting for deferred funds for the future, in order to ensure their equal spending during the reporting period. For example, the majority of employees strive to take vacations in the summer, for the enterprise this is a large one-time financial burden. Reserving funds will allow you to spend peak months on vacation pay without prejudice to the organization’s current assets.
With respect to the balance sections, 96 is the account active or passive? He is passive. The receipt of payments to the account of replenishment of the reserve is recorded on the loan, the amount of expenses from the reserves - on the debit. Analytics is conducted for each type of reserve separately. For this, sub-accounts are used:
- 96.1 in the formation of a reserve of funds for payments to vacationers;
- 96.2 when creating a reserve of funds intended for payment of the allowance for long service;
- 96.3 relating to repairs and warranty costs;
- 96.4 is provided for all other reserves.
Account 96 in accounting when creating a reserve for payments to vacationers involves the inclusion of estimated amounts for vacations and insurance premiums for these payments. Algorithm of actions:
- Calculation of the total amount of funds required for reservation for vacation pay. For this, information is needed on the number of employees, the sum of the duration of their holidays, including extra days, and average earnings.
- Calculation of insurance premiums at established rates in relation to the total value of vacation pay.
- Formation of a reserve by monthly or quarterly installments.
When creating a reserve aimed at covering the costs of repairing fixed assets, in the account. 96 accumulates the amount within the actual cost of the repair services made over the past 3 years in arithmetic mean. If there are more funds in the reserve than was necessary, then they can be transferred to the next year or reversed. If there is a shortage of reserve assets, additional expenses are written off as current expenses.
96 account - postings
Postings confirming the creation of a reserve:
- D08 - K96 indicates a formed reserve for the sale of investments in non-current assets.
- D20, 23, 25, 26, 29 - K96 when reserving funds for production needs.
- D44 - K96 when creating a stock of funds for the implementation of implementation measures.
- D84 - K96, if there is a need to create a fund of material incentives for employees.
When spending funds from reserves, the following entries are made:
- D96 - K28 during the elimination of marriage at the expense of the reserve funds.
- D96 - K51, 52 when transferring funds from the reserve.
- D96 - K69 in confirmation of the fact of accrual of insurance premiums from the amount of reserved vacation pay.
- D96 - K76 during the repair of fixed assets by the efforts of third parties.
- For debit, account 96 - K91.1 for inclusion in other income of the amount of the unused part of the reserve.
Example
LLC "Elef" produces and sells products with a warranty period after sale of 12 months. Analysis of the reporting period showed that
- 15% of the goods are in need of repair, the cost of which per unit of product is 400 rubles;
- 5% of the goods need to be replaced, the cost of which per unit of product is 5200 p.
Next year, the production of 6000 products is planned.
Example of calculating the annual reserve amount:
(6000 x 15% x 400) + (6000 x 5% x 5200) \u003d 1 920 000 p.
Each month, 160,000 rubles must be deducted to the reserve. (1 920 000/12) and carry it out by recording D20, 23, 26, 44 - K96.
Account 96 in the balance sheet
In the balance sheet, the amount of reserves is recorded as estimated liabilities. To recognize them, several conditions must be met:
- the amount of obligations can be estimated;
- the emergence of a specific obligation was a consequence of the activities of the enterprise in the past;
- likely to reduce economic benefits in meeting the obligation.
96 account in the balance sheet is reflected in the part of the loan balance. The balance must be justified, overstatement of the reserve amount is not allowed. The term for fulfillment of obligations must be less than 12 months. The balance of 96 accounts in the balance transfers to line 1540.
Cost Management
Under the distribution costs is understood to mean the costs of material, labor and financial resources in the process of promoting the goods. In organizations engaged in production activities, the composition of distribution costs includes:
- packaging of products in warehouses of GP;
- GP delivery to the departure station;
- loading GP in a vehicle;
- commission fees paid to sales and other intermediary organizations;
- the cost of maintaining premises for storage of SOEs at points of sale;
- expenses for representation (4% of payroll), advertising (1% of turnover without indirect) and other similar expenses.
Selling expenses are recorded in the active costing account 44 ʼʼ Selling expenses ʼʼ. The debit balance shows the costs of the sale related to the balances of goods at the beginning (end) of the reporting period.
To distribute the distribution costs between the goods sold and the balances at the end of the month, the following calculations are made:
1. The average% of distribution costs is determined:
K \u003d (Yn + Yn) / (Tn + Tkop)
And - distribution costs at the beginning and for the reporting period;
T - goods sold during the reporting period and balances at the end of the period.
2. The calculated distribution costs for the remainder of the goods:
Iot \u003d K (average distribution costs) * Tkop / 100
3. The amount of distribution costs attributable to the financial result is determined:
Irope \u003d It + Iop - Iot
Accounting records for account 44:
1. Reflection of write-off of refineries for distribution costs: D44 K10
2. Accrued depreciation for fixed assets and intangible assets: D44 K02 (05)
4. Allocated VAT: D19-3 K76
5. Accrued taxes related to distribution costs: D44 K68
6. Accrued salaries to employees engaged in the sale of products: D44 K70
7. Accrued insurance premiums: D44 K69
8. The write-off of accountable amounts is reflected: D44 K71
9. Deductions are made to the reserves for future expenses: D44 K96
10. Charged the costs of sales with / from sales: D90-2 K44
BPO - these are costs that relate to future periods and which cannot be fully attributed to current costs (s / s of products). Οʜᴎ are included in agricultural shares with certain (equal) shares for several months or years (maximum period up to 2 years).
To account for BPM, active account 97 is used, which takes into account the following types of costs:
- rental payments (lease payments) for subsequent periods;
- on the development of new products;
- for OS repair;
- to pay for a subscription, acquisition of technical literature;
- for research and development work, for a period not exceeding 2 years;
- insurance expenses;
BPOs are realized at the expense of the free circulating assets of the enterprise.
At the time of the occurrence of expenses, account 97 is debited in correspondence with the credit of the corresponding settlement accounts. These costs are reimbursed to the enterprise through their equal inclusion in s / s during the period determined by the accounting policy of the enterprise.
Accounting records for account 97:
1. The costs of the BPO are attributed: D97 K10 (02, 05, 60, 70, 69, 76 ...)
2. The BPO are evenly included in current costs: D20 (26) K97
3. Reflected the services of an intermediary organization for the work performed: D97 K76
4. Reflected VAT: D19-3 K76
Accounting for the formation and use of the reserve fund is carried out on a passive account 96 ез Reserve for future expenses ʼʼ. The credit balance of account 96 reflects the amount of the unused reserve at the beginning (end) of the reporting period. The debit turnover shows the use of funds for the intended purpose, the loan - the source of reserve formation due to monthly deductions for s / s of products.
Accounting records for account 96:
1. Reflects the creation of a reserve for future expenses:
A) for vacation pay: D20 (23, 25, 26, 44) K96-1
B) payment of remuneration for the year: D20 (23, 25, 26, 44) K96-2
B) for overhaul of the OS: D20 (23, 25, 26, 44) K96-3
2. Reflects the closure of account 96 at the end of the reporting period:
A) if there is a credit balance (reserve balance): D96 K91-1
B) if there is a debit balance (overspending): D97 K96
Line 650 "Reserves for future expenses "
Home / Accounting / Line 650
Line 650 Accounting refers to the balance sheet until 2011
Line 650 “Reserves for future expenses”
This line of the balance reflects the credit balance of account 96 “Reserves for future expenses”. These are the reserves created by the organization for the upcoming payment of holidays, for the payment of remuneration for the year, for warranty repairs and maintenance, for the repair of fixed assets, etc. Reserves for conditional facts of economic activity and for discontinued operations are taken into account on this account (reserve for repayment obligations under severance pay, etc.).
Reservation of amounts is reflected in the credit of account 96 in correspondence with the accounts for the accounting of production costs (selling expenses - for trade organizations). The expenditure of the amounts of the created reserve is reflected in the debit of account 96.
The decision to form reserves and (or) to refuse to form reserves should be recorded in the accounting policy.
Please note: the amount of estimated reserves in line 650 of the balance sheet is not reflected.
Account 96 in Accounting
The balance of the accounts for accounting for estimated reserves (14 “Provisions for reducing the value of material assets”, 59 “Provisions for the impairment of financial investments”, 63 “Provisions for doubtful debts”) are not shown in the balance sheet as a separate amount. The balances on them are taken to reduce the corresponding indicators of the asset balance:
- the balance of account 14 reduces the performance of lines 211 “Raw materials, materials and other similar values” and 214 “Finished products and goods for resale”;
- the balance of account 59 reduces the performance of lines 140 “Long-term financial investments” and 250 “Short-term financial investments”;
- the balance of account 63 decreases the figures for lines 230 and 240 “Accounts receivable”.
The balance of account 82 “Reserve capital” is not reflected in line 650 either. For it, line 430 of section III of the balance is intended.
useful links
The economic literature ◄ Methods of financial analysis ◄ Forms of financial statements ◄ The largest joint-stock companies of Russia ◄
Account 96 “Reserves for future expenses”
Account 96 “Reserves for future expenses” is intended to summarize information on the status and movement of the amounts reserved in order to evenly include costs in production costs and selling costs. In particular, the following amounts may be shown in this account:
- upcoming vacation pay (including social security and welfare payments) to employees of the organization;
- to pay annual remuneration for long service;
- production costs for preparatory work in connection with the seasonal nature of production;
- for repair of fixed assets;
- upcoming costs of land restoration and the implementation of other environmental measures;
- for warranty repairs and warranty service.
Reservation of certain amounts is reflected in the credit of account 96 “Reserves for future expenses” in correspondence with the accounts for the accounting of production costs and selling expenses.
Actual expenses for which the reserve was previously created are included in the debit of account 96 “Reserves for future expenses” in correspondence, in particular with accounts: 70 “Settlements with personnel for remuneration of labor” - for the amount of remuneration to employees for vacation time and annual remuneration for length of service; - the cost of repair of fixed assets produced by a division of the organization, etc.
The correctness of the formation and use of the amounts for a particular reserve is periodically (and obligatory at the end of the year) checked according to estimates, calculations, etc.
and adjusted if necessary.
Analytical accounting account 96 “Reserves for future expenses” is maintained for individual reserves.
Account 96 “Reserves for future expenses” corresponds with the following accounts of the Plan:
debit
- 23 "Auxiliary production"
- 28 "Marriage in production"
- 51 "Current accounts"
- 52 "Currency accounts"
- 69 "Calculations for social insurance and security”
- 70 “Settlements with staff for remuneration”
- 76 “Settlements with various debtors and creditors”
- 91 “Other income and expenses”
- 97 "deferred expenses"
- 99 “Profit and loss”
on loan
- 08 "Investments in non-current assets"
- 20 "Main production"
- 23 "Auxiliary production"
- 25 "General production costs"
- 29 "Serving industries and farms"
- 44 “Costs to sell”
- 97 "deferred expenses"
In this material, which continues a series of publications devoted to the new chart of accounts, the analysis of account 96 "Reserves of upcoming payments" of the new chart of accounts is carried out. This comment has been prepared by Ya.V. Sokolov, Doctor of Economics, Deputy. Chairman of the Interdepartmental Commission for the Reform of Accounting and Reporting, Member of the Methodological Council for Accounting at the Ministry of Finance of Russia, First President of the Institute of Professional Accountants of Russia, V.V. Patrov, professor at St. Petersburg State University and N.N. Karzayeva, Ph.D., Deputy. Director of the audit service of Balt-Audit-Expert LLC.
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Reserve is a word of French origin and literally means reserve. It has been used in accounting since the mid-19th century in the sense of:
- The part of the asset written off as an expense, i.e. the reserve must always be filled with the funds represented in the asset of the balance sheet, if the asset does not have the corresponding filling, then we are not talking about the reserve, but only about the counter account.
To form a reserve is an inalienable right of the owner of the organization. Of course, this absolutely fair situation should not affect the interests of the budget.
Article 120 of the Tax Code of the Russian Federation is actively used by tax authorities in order to fine organizations for allegedly incorrect accounting. And many tax specialists believe that the one in which the accountant fulfills the requirements of normative and instructive documents word for word is the right one. But the norms of these documents often contradict each other, and this allows you to always “justly” fine organizations. The list of reserves that organizations have the right to create is specified in paragraph 72 of the Regulation on the maintenance of accounting and financial statements.
Reserves are created in order to uniformly include costs in production costs and circulation of the reporting period, before they are actually made. Actual expenditure of the relevant funds in the future is carried out already at the expense of the established reserves.
The size of each of the reserved amounts must be justified by appropriate calculation.
The creation of reserves is reflected in the credit of account 96 "Reserves for future expenses" in correspondence with the accounts for expenses.
Actual expenses for which a reserve was previously created are included in the debit of account 96 “Reserves for future expenses” in correspondence with different accounts (70 “Settlements with personnel for pay”, 69 “Settlements for social insurance and security”, 76 “Settlements with various debtors and creditors ", etc.).
Provision for upcoming vacation pay to employees
Employees go on vacation unevenly. Usually they talk about the holiday season (summer, golden autumn). Naturally, these months account for the bulk of the company's expenses on vacation pay. From here, from the beginning of the year, the accountant, having determined the annual amount of vacation pay, divides it into twelve and each month, forming a reserve, makes a record:
If an employee goes on vacation, the accountant draws up a posting:
Debit 96 "Reserves for future expenses"
Credit 70 "Settlements with staff for remuneration"
Credit 69 "Calculations for social insurance and security"
Hence the need for a very clear approach to determining the monthly amounts to be reserved.
Reserve for annual remuneration for long service
Usually these payments are made once a year. Consequently, one-twelfth part is accrued monthly, and after the end of December, the payment to the organization’s employees is made from the created reserve. In this case, the essence of the reserve is well understood: every month the organization incurs expenses associated with paying the length of service, but the money itself will be paid after twelve months, and during the year the organization will dispose of these funds as its own. However, for the amount of this reserve, a certain part of the asset is, as it were, “booked” and by and large, in this case we are not talking about the reserve, but about the accounts payable of the organization to veterans.
Provision for preparatory work costs due to the seasonal nature of production
Organizations with a seasonal nature of production have a number of preparatory work expenses that arise during periods when business activities are not actually carried out. For a more even inclusion of these costs in the cost of production, a reserve is created for them in advance, i.e. expenses are shown that are not available in a given month, these expenses are created artificially, as if for the upcoming real expenses, some of which should fall for this month, although in fact they will arise in another month. And this month they form a reserve. But, since there were actually no expenses, so far there will always be values \u200b\u200bin the asset that fill the reserve.
Reserve for repair of fixed assets
The old French word - repair, means bringing into good condition an object whose work for some reason has become completely or partially unproductive. Every thing, and even the human body, needs to be repaired from time to time. The requirement for continuous operation of the enterprise suggests that repair costs arising at some point t (repair period) should be evenly distributed over the reporting months of the overhaul period. Suppose that such a period is three years, i.e. 36 months and the estimated cost of the expected repairs will be 360,000 rubles.
Therefore, an accountant must create a reserve for upcoming repairs every month by recording:
Debit 20 "Main production" (other cost accounts)
Credit 96 "Reserve for future expenses"
It is assumed that all 36 months will be shown, in essence, fictitious expenses, or rather quasi-expenses, because in fact there is no repair yet, there are no expenses, but these expenses are still shown. In this case, of course, the reserve included in the liability is filled in the asset with real values, which according to accounting have already been written off as expenses.
But, suppose, after two years (24 months), it was necessary to carry out repairs, and it cost 400,000 rubles. In this case, the accountant will make the following entries:
Debit 96 "Reserves for future expenses" - 240 000 rubles. Debit 97 "deferred expenses" - 160 000 rubles. Credit 51 "Settlement accounts" - 400,000 rubles.
Consider how the content of these amounts is justified.
240 000 rub. - this is the value of the already accrued reserve intended for the repair of fixed assets. This means that immediately during the repair all previously accrued quasi-expenses are written off, and they turn into real expenses, which, in our case, amounted to 400,000 rubles. Because more was spent than was the reserve;
160 000 rub. - this is an "overspending", more precisely, the difference between the accumulated funds for repairs and its actual value. According to the same requirement of a permanent enterprise, these expenses cannot be attributed to the period when they were incurred, but they should be attributed to future reporting periods. Hence, account 97 "deferred expenses" arises.
So, future repair costs are reserved, and expenses already incurred in respect of future periods are rolled over, assets are kept in reserve when filling up, while rolling over, a hole is formed in the asset: capitalized expenses are shown, which are included in current assets ( funds), but in fact, there is no real content behind this prolonged capitalization.
It is easiest to understand what was said in the experience of the wonderful Russian man Akaky Akakievich Bashmachkin. He had to repair the main tool - an overcoat. And in good faith, from every payday he put aside money in a jar, saved it, i.e. reserved. In the language of the accountant, he debited an untouchable cash fund and credited the reserve for the repair of fixed assets. If Bashmachkin was German, he would have invested this cash in some business, but he was a simple man and accumulated reserves in an asset called "stocking". From the second half of the 19th century, Russian people learned to invest as well as the Germans in such a way that they were profitable.
Reserves for land restoration and other environmental protection measures
From a purely accounting point of view, this reserve resembles and even repeats the previous one.
The most significant difference should be recognized that the implementation of environmental measures is a much longer process than repair, because it is more difficult to “repair” nature than to repair machines and machines.
While environmental protection measures are not carried out, the accountant accrues a reserve. Similarly, expenses that are not actually shown are shown - quasi-expenses, and in the same way, if such work is carried out, and there is not enough reserve for them, then the accountant uses account 97 "Deferred expenses". And here we are faced with the same problems as in the formation of the reserve for repairs.
Reserve for warranty repairs and warranty service
Already when the values \u200b\u200bhave been bought and it is assumed that they should be used (machines work, you can live in the room, etc.), the seller, not having sold these values \u200b\u200byet, already promises future potential buyers either a free repair or a free service for the agreed period. And, therefore, having not yet sold a single unit of goods, the seller promises and guarantees the future, until an anonymous buyer, repairs. But in order to carry out such a repair later, the seller immediately creates a reserve for warranty service. It is clear that, in this case, writing:
Cost Account Debit
Credit 96 "Reserves for future expenses"
And when the "hour of reckoning" comes and buyers demand to repair watches, cars, summer residences, etc., then you have to spend money and, above all, money. And the meaning of the entries would be:
Debit 96 "Reserve for future expenses"
Credit 51 "Settlement accounts", etc.
In the West and in a number of official documents, we have a tendency to understand accounts payable not as attracted capital, but as the forthcoming expected mandatory outflow of assets, usually cash. In this regard, the reserve for warranty repairs is treated not as an account of own funds, but as a monetary account of accounts payable. And, regardless of in which section of the balance the balance of this account appears, when analyzing the financial condition, its balance should be included in the attracted (creditor) debt section. Although, legally, it is undeniably funds owned by the organization.
Until 2002, for the purposes of taxation of profits, the amount of deductions to the reserve for warranty repairs and warranty services was not taken into account. Taxable profits could only be reduced by the amount of actual costs for the above purposes.
Starting January 1, 2002, in accordance with Article 267 of the Tax Code of the Russian Federation, the tax base is reduced by the amount of expenses for the formation of a reserve for warranty repairs and warranty services. This reserve is created in relation to those goods (works) for which, in accordance with the terms of the contract with the buyer, service and repair of the product are provided during the warranty period.
Expenses are recognized as the amount of deductions to the reserve at the date of sale of the specified goods (works). At the same time, the size of the created reserve cannot exceed the maximum size, defined as the share of actual expenses for warranty repairs and maintenance in the amount of proceeds from the sale of these goods (works) for the previous three years.
An organization that has not previously implemented the sale of goods (works) subject to warranty repair and maintenance is entitled to create a reserve in an amount not exceeding the expected expenses for the specified costs. Expected expenses are understood as expenses provided for in the plan for the fulfillment of warranty obligations, taking into account the warranty period.
At the end of the year, the organization must adjust the size of the created reserve based on the share of actually incurred expenses in the amount of revenue from the sale of these goods over the past year.
For goods (works) for which the term of warranty service and repair has expired, the reserve amounts not expended for the purpose are included in non-operating income of the corresponding period.
The procedure for forming a reserve for warranty repairs and warranty services is regulated by article 267 of the Tax Code of the Russian Federation, which provides for the mandatory fulfillment of the following conditions:
- the contract with the buyer provides for maintenance and repair during the warranty period;
- in the accounting policy of the enterprise should be provided for the procedure for determining the maximum amount of contributions to the reserve
Reserve for payment of remuneration based on the results of work for the year
In addition to monthly wages, some organizations practice paying remuneration according to the results of work for the year to increase employee interest in the final results of activities. These fees are included in the cost of production, but since they are issued once a year, an appropriate reserve is created to evenly distribute these costs.
Provision for future expenses for the repair of items intended for rental under a rental agreement
A rental agreement is a type of rental agreement. Under this agreement, the lessor agrees to provide the lessee with movable property for a fee for temporary possession and use.
Repair of this property (items) is the responsibility of the lessor and it is usually carried out unevenly over the months. Therefore, for an even distribution of costs for it, organizations involved in the rental of items create a reserve for repair costs.
We examined those types of reserves that are listed in paragraph 72 of the Regulation on accounting and bookkeeping. However, this paragraph states that reserves may still be created for "covering foreseen costs and other purposes stipulated by the legislation of the Russian Federation, regulatory acts of the Ministry of Finance of the Russian Federation." An example of such reserves is the allowance for writing off the natural loss of goods. The creation of this reserve is provided for in paragraph 2.13 of the Guidelines for the accounting of costs included in distribution and production costs, and financial results at trading and public catering enterprises, approved by letter No. 1-550- / 32-2 of the Russian Federal Trade Committee on April 20, 1995 (this document has been agreed with the Ministry of Finance of Russia).
Natural decline is the loss of goods due to their physicochemical properties, i.e. shrinkage, utruska, spray, leakage, etc.). This mainly concerns food products.
Due to its objective nature, the above losses are normalized, i.e. their maximum sizes (norms) are established.
Losses of goods during storage and sale due to natural loss are detected only after the inventory and are written off in the month of the inventory.
In the vast majority of cases, inventory of goods is not carried out monthly and therefore it would be wrong to attribute the entire amount of losses incurred during the inter-inventory period to expenses of one month. Since the loss of goods due to natural attrition is generated for the entire period between inventories (for several months), they should be distributed among all months of this period. For a more even distribution of losses from natural losses between all months of the inter-inventory period, the planned amount of these losses is written off monthly to expenses by accruing a reserve for natural decrease. After the inventory, the shortage of goods resulting from a natural loss is written off at the expense of the previously accrued reserve. Since the actual amount of shortage of goods due to natural decline and the accrued reserve, as a rule, are not equal, they make notes on the difference between these indicators to adjust the reserve: excessively accrued reserve is reversed, and if it is insufficient, it is re-charged.
The reserve for writing off the natural loss is provided for only "on refrigerators, cold stores, bases of vegetable and food products, trading enterprises with warehouses ...".
It follows that this reserve can hardly be created in most stores, since they have no warehouses as such. This position of Roskomtorg of Russia and the Ministry of Finance of Russia is surprising, since stores have to write off the loss of goods during storage and sale due to natural losses formed over several months to the expenses of one month (in which the inventory was carried out).
Self-service goods are widely used throughout the world. This progressive trading method has one drawback - the possibility of theft of goods by customers. Trading companies use various forms of control over the actions of buyers, however, the cost of stolen goods is still measured by astronomical amounts. Since these losses of goods are objective, in our opinion, their certain value should be written off to current expenses and taken into account when taxing profits. At one time, the USSR Ministry of Trade approved norms for such losses and provided for their reservation. Unfortunately, the current regulatory documents do not provide for these obvious objective losses on expenses in order to reduce taxable profits.
Guidelines for the inventory of property and financial obligations, approved by order of the Ministry of Finance of Russia dated 13.06.1995 No. 49 provide for the verification of the correctness and validity of their creation during the inventory of reserves for future expenses. In particular, the reserve for the upcoming vacation pay should be clarified based on the number of days of unused vacation, the average daily amount of labor costs and unified social tax payments. The reserves created for the payment of annual remuneration for the length of service and for the results of work for the year are also specified. In case of excess of the actually accrued reserve over the amount confirmed by the inventory of the calculation in December of the reporting year, a reversal recording of production and distribution costs is made, and in case of under-accrual, an entry is made to include additional deductions in production and distribution costs.
Unnecessarily reserved amounts of the reserve for expenses on fixed assets repair are reversed at the end of the year. In cases stipulated by industry-specific features of cost accounting, when the completion of work on facilities with a long production period takes place in the next reporting year, the balance of the reserve is not reversed. Upon completion of the repair, the excessively accrued reserve amount is included in the financial results of the reporting period.
If in an organization with a seasonal nature of production, the sum of expenses for servicing production and its management, included in the actual cost of output according to the standards established in the organization, exceeds actual costs, the resulting difference is reserved as future expenses. There should not be a balance at the end of the year for this reserve. Accordingly, the correctness and validity of the creation of other reserves are checked.
In connection with the problem under consideration, I would like to draw readers' attention to one sentence of clause 2.17 of the Methodological recommendations for accounting for distribution costs in trade and public catering: “At the end of the reporting year, if the actual accrued reserve exceeds the calculation amount confirmed by the inventory, a reversal recording of distribution costs is made and production. " This indication arose due to the requirements of many tax inspectors to adjust at the end of the year the amount of all accrued reserves. Such a requirement indicates a misunderstanding of one of the most important accounting principles - the accrual principle, in accordance with which all expenses related to this reporting period should be charged to the distribution costs of this period. Reversal at the end of the year of the balance of the unused reserve for natural decline without conducting an inventory of goods is a violation of the above accounting principle, and at the end of the year (precisely on January 1) in all trading organizations an inventory of goods is practically impossible. The allowance for natural decline should be rolling over to the next year and should only be adjusted at the time of the inventory.
Due to the requirements of the current legislation (local regulatory acts, court decisions, agreements), in the course of the company’s actions, the latter may encounter obligations with respect to which the amount and term are not determined.
We are talking about obligations of a valuation nature, which are reflected in PBU 8/2010. Used for accounting account 96 “Reserves for future expenses”.
What it is
Account used in to create a reserve of planned costs. Thus, they provide an even distribution of expenses in order to pay income tax and other areas. There are sub-accounts regarding staff remuneration, seasonal work, equipment preparation activities, repair work with fixed assets, etc.
With proper account management 96, the company is given the opportunity to avoid problems with the law and rationally plan its own budget.
The word “reserve” has French roots and translates as stock. In the framework of modern accounting practice, it has been used since the 19th century and assumes the share of an asset that is written off as an expense, that is, it should always be filled with the funds presented in the balance sheet asset.
If there is no corresponding content, then use the contract account. The formation of a reserve is an undeniable right that belongs to the owner of the enterprise. But this direction should not involve any budget interests.
What is used for
Account 96 is intended for use and generalization of information related to the status and movement of the amounts reserved in order to include expenditure areas in certain cost categories.
By loan certain amounts are backed up, and by debit - regulation of actual expenses for which the formation of the reserve previously occurred.
The correctness of the formation and application is regularly checked on the basis of calculation data, estimates and rules.
Score 96 wears passive. Formation is carried out on credit, write-off - on debit.
Accounting procedure
To recognize and reflect the estimated liabilities in the framework of accounting, take into account a number of conditionsbinding:
- the organization in the course of past circumstances has an obligation that urgently needs to be fulfilled;
- a high probability of a decrease in the economic benefits that are required to fulfill this obligation;
- reasonable assessment of the value of the estimated liability.
If each position is respected, liabilities for:
- pay vacation pay to employees;
- repair costs associated with fixed assets;
- expenses for warranty service of commodity items;
- court proceedings;
- restructuring the work of the company.
The legislative framework
In the course of the activity, the accountant is guided by norms and features:
- local regulatory acts adopted within the enterprise;
- orders and orders from the authorities;
- government regulations;
- regional findings;
- accounting rules (PBU).
All laws are extensive and involve considering the situation from several perspectives.
Formation, write-off, standard accounting entries
Based on the nature of the estimated liabilities, the amount relates to expense areas by type of activity, as well as other expenses. With regard to the analytical accounting of the account, it is carried out in the areas of obligations. The credit balance is reflected in the liabilities of the balance sheet at line 1430.
By debit
- Dt 96 Ct 23 - write-off of expenses for completed current repair, write-off of expenses that are aimed at auxiliary production.
- Dt 96 Ct 28 - display of write-offs of expenses on elimination of marriage.
- Dt 96 Ct 29 - the costs of service industries are written off due to preliminary formation.
- Dt 96 Ct 51 - increase in the settlement account of RPR on the basis of a bank statement.
- Dt 96 Ct 52 - increase in reserves of expenses due to cash.
- Dt 96 Ct 70 - accrual of vacation pay to workers.
- Dt 96 Ct 97 - write-off of expenses for repair work.
- Dt 96 Ct 99 - accrual of an excess amount for the repair of OS facilities.
- Dt 96 Ct 10-1 - write-off of the cost of materials used.
- Dt 96 Ct 69-3 - accrual and payment of tax contributions.
- Dt 96 Ct 91-1 - assignment to the financial results of the amounts accrued in the current year.
On loan
In the credit area, the account includes a large number of transactions.
- Dt 20 (23) Ct 96 - reflection of deductions to the reserve intended for the repair of OS facilities.
- Dt 20 Ct 96 - accrual of monetary amounts, formation of reserves for vacation pay and reflection of deductions for subsequent repair of fixed assets.
- Dt 23 Ct 96 - accrual occurred.
- Dt 29 (44) Ct 96 - reflection of the amount of monthly deductions for repair operations on the OS facilities.
- Dt 44 Ct 96 - reflected payments for repair work on fixed assets of the tenant.
- Dt 84 Ct 96 - Formation of a fund for help within the enterprise.
- Dt 86 Ct 96 - capital repair fund contributions.
- Dt 97 Ct 96 - reflection of the fact of excess of actual costs of repair work over the reserve, which was created for OS repair.
In practice, a large number of transactions are used, which should be taken into account and taken into account in accounting activities.
Features of closing 96 accounts
The calculation of the reserve occurs not with 100% accuracy. It changes due to exposure a number of factors:
- dismissal of employees;
- changes in salaries and support payments;
- changes in the actual vacation schedule;
- other circumstances.
When the reserve is exceeded, the amount “from above” shall be debited by means of current expenses. If the expenditure has not occurred in full, it is carried forward to the next year or reversed.
What conclusion can be drawn
Account 96 plays an important role in the balance sheet and the organization as a whole. It has subaccounts that operate in different directions of expenses, and is responsible for the stocks of the enterprise in order to correctly distribute the budget.
The account corresponds with a large number of other directions and is used in the formation of postings. They characterize the principles of the enterprise and accounting.
Enterprises in the Russian Federation are entitled to form reserves, and the costs of creation should be taken into account when determining income tax. In the article, consider account 96: its use, postings, and offsetting accounts.
Account 96: its use
To summarize information that gives an idea of \u200b\u200bthe future expenses of the organization, distributed during the year, account 96 “Reserves for future expenses” is intended. Its purpose is the uniform inclusion of costs for future production costs, costs of sale.
Reserves for future expenses consist of:
- selling costs;
- lump sum payments to employees;
- maintenance of equipment, OS;
- development of new industries;
- other possible expenses of the organization.
In the formation of reserves, the costs are charged to the following accounts, depending on the final destination:
Name of reserve | purpose | Accounts Used |
To pay for holidays | Funds are allocated for the provision of leave to employees throughout the year | 70, 69 |
For the payment of employee benefits for length of service and other | Creation of reserves for lump-sum payments to employees, allocation of funds to pay seasonal workers | 70, 69 |
OS repair | Possible amounts required for routine maintenance (repair) of property and equipment are determined | 20,23 |
Land reclamation | Designed for environmental protection | 20, 23 |
Warranty repair and maintenance | Reimbursement of expenses to buyers for the malfunction of the purchased warranty product | 51 |
Account 96: Typical Postings
The figure below shows the account 96 “Reserves for future expenses” and its typical postings. To enlarge the picture, click on it.
Account 96 “Reserves for future expenses”. Postings
Accounting for reserves
Recently, the formation of reserves has become mandatory for legal entities. The exception is organizations that are entitled to keep simplified accounting (small enterprises).
The procedure for the formation of reserves is not legally fixed. Organizations have the right to develop an algorithm and register it in the accounting policy. If, for example, the number of employees is substantial, it is allowed to create reserves for upcoming vacations on a quarterly or yearly basis.
If in accounting, the creation of reserves has become mandatory, then in the tax procedure is determined at the discretion of management. The adoption of such a decision should also be reflected in accounting policies. The reserve created in tax accounting allows you to reduce the tax base. You should decide on the maximum amount of deductions and the monthly percentage. A calculation is made that contains information on the planned amounts of monthly expenses based on data on the total annual cost of reserves of a certain type.
Provisions for vacation pay and other payments
Management has the right to take into account future expenses intended to pay off debts on payment of vacation pay to its employees and distribute them evenly throughout the year.
When determining the annual amount of the allowance for vacations, all estimated payments, including contributions to the Pension Fund and Social Insurance Fund, should be taken into account, and the percentage of deductions to the reserve should be calculated based on the possible vacation amounts and the annual wage fund.
Example. The annual payroll together with insurance payments in the organization is planned in the amount of 900,000 rubles. Estimated amounts of vacation and related contributions are 80,000 rubles. It is required to calculate the percentage of deductions to the reserve.
The monthly amount for replenishment of the reserve is defined as the ratio of vacation pay to payroll per year divided by the number of months (12) - 80,000 / 900,000 / 12 * 100% \u003d 0.74%.
The amount of monthly deductions is equal to 900,000 rubles * 0.74% \u003d 6,660 rubles - this amount must be monthly transferred to the reserve for upcoming vacation payments.
The following entries will appear in accounting:
Dt 20 - Kt 96 (6 660 rubles) - monthly reserve formation
When the employee leaves, the following transactions appear:
Kt 96 - Dt 70 - accrual of vacation amounts;
Kt 96 - Dt 69 - vacation insurance premiums.
If it is necessary to allocate amounts for employee benefits for years of service, the planned expenses are also reserved for 12 months.
At the end of the period, an inventory of reserves is required. The procedure is necessary to compare actual and planned costs. If unused reserved amounts are discovered, they should be included in the tax base. In case of insufficient funds, additional payments for holidays and insurance contributions are made to the expenses.
Reserves for the repair of fixed assets (OS)
Each equipment on the balance sheet of the enterprise may suddenly fail or require additional investments in the form of routine repairs. For such unforeseen needs create reserves for OS repair. The duration of the equipment and the estimated amount are taken as the basis.
Factors affecting the estimated amount:
- cost of spare parts;
- labor remuneration and insurance premiums for workers in the repair;
- costs of paying services to third parties.
The maximum amount of deductions to the reserve cannot be higher than the spent funds for OS repair based on data from the last 3 years. Deductions for expenses are written off evenly throughout the reporting period.
If the actual amount of expenses turned out to be less than planned, then the previously made deductions to the reserve should be taken into account in the income for the year. If real costs are exceeded, additional amounts are included in other expenses.
Creating a reserve for OS repair in tax accounting is a right and not an obligation of a taxpayer. Favorable for large organizations with a large amount of equipment.
Reserves for warranty service
It is typical for trade institutions to provide guarantees to customers when purchasing goods. Trading organizations received the right to create reserves for a possible forthcoming warranty service.
The size of the reserve should not exceed the amount of repair costs for the past 3 years. If, at the end of the year, the reserved amounts are not spent, then they are recorded as non-operating income of the organization.