Increase in the value of fixed assets. Modernization of fixed assets - accounting and tax accounting
Fixed assets for the purpose of calculating income tax include property for which the following conditions are met (Article 256, Article 257 of the Tax Code of the Russian Federation):
- used as a means of labor for the production and sale of goods (performance of work, provision of services) or for the management of an organization;
- owned by the organization;
- used to generate income;
- its term beneficial use- more than 12 months;
- initial cost- more than 100,000 rubles.
Fixed assets in 2016: minimum cost
So, the minimum cost of an object at which it is considered a fixed asset is 100,000 rubles. The cost criterion for classifying property as fixed assets was changed from 01/01/2016. Recall that earlier it was 40,000 rubles.
Tax accounting of fixed assets in 2016
When accepting fixed assets for tax accounting, it is necessary to establish their initial cost. It is defined as the amount of the organization's expenses for the acquisition, construction, manufacture, delivery and bringing to a state in which the fixed asset is suitable for use (excluding VAT) (paragraph 2, clause 1, article 257 of the Tax Code of the Russian Federation). If the fixed asset is received free of charge or discovered as a result of an inventory, then the initial cost of the object is determined as its market value(clause 8, clause 20, article 250 of the Tax Code of the Russian Federation).
It is also important for an organization to determine whether to charge depreciation on a fixed asset. The list of fixed assets for which depreciation is not charged is given in paragraph 2, paragraph 3 of Art. 256 of the Tax Code of the Russian Federation.
For depreciable fixed assets of the organization, it is necessary to establish.
Modernization of fixed assets: accounting and tax accounting
From time to time, in order to change the technological or service purpose of an item of fixed assets, to use it under conditions of increased loads or to give it other new qualities, work is carried out on completion, additional equipment, and modernization. This is their difference from repair, the purpose of which is to maintain the object in working order.
The costs incurred for modernization increase the initial cost of the fixed asset (clause 14 PBU 6/01, clause 2 article 257 of the Tax Code of the Russian Federation).
Modernization costs are reflected in accounting on the Debit of account 08 “Investments in non-current assets” from the Credit of accounts 02 “Depreciation of fixed assets”, 10 “Materials”, 60 “Settlements with suppliers and contractors”, 70 “Settlements with personnel for wages”, 69 "Calculations for social insurance and provision”, etc.
The modernization of fixed assets in 1C 8.3 means a change in their original properties. As a rule, it makes sense to upgrade for the better. For example, add additional functionality or processing accuracy.
Accordingly, for this it is necessary to purchase the necessary additional equipment and carry out work on its installation. Work can be done in-house, or third-party. In this article, we will consider the option when the work is performed by another organization, as this will more fully reveal the topic.
For example, we are upgrading a woodworking machine from a demo database 1C Accounting 8.3. Namely, we will replace his engine.
Receipt of fixed assets object for modernization
First you need to make a purchase of this engine. Receipt is issued in the usual way, only the type of operation you need to select "Construction object":
Fill in the required details:
- Organization;
- Counterparty;
- Agreement;
- In the tabular part 1C, select the construction object. By default (at least in my database) in the "References" section there is no "Construction Objects" reference book. It needs to be added to the selected commands. We go to the "References" menu and press the settings button:
In the drop-down list, click the navigation settings.
A window with two panels will open. In the left we find the directory "Construction objects" and transfer it to the right panel:
Get 267 1C video lessons for free:
Now we can add our engine to the directory. Let's call it "Engine BM-500".
If the modernization of fixed assets is carried out infrequently, you can do it easier.
In the tabular part of the newly created document for the receipt of the construction object, click the "Add" button. A new document line will be added. In the column "Object of construction" select "Show all":
The directory "Construction objects" will open, there we enter a new object and select it in the document.
- Now let's add an engine installation service on the Services tab. There are no tricks here, the service is selected from the "Nomenclature" directory, the quantity and cost are indicated. The only point is the expense account. By default, it gets up 26. I want the service to be included in the upgrade cost. Therefore, I manually changed the expense account on 08.03.
We carry out the document. The following lines should be generated:
The cost of the engine and services for its installation is collected on the account 08.03.
Modernization of a fixed asset in 1C
Upgrading is carried out by the document "Upgrading the OS". You can get into the list of modernization documents through the menu "OS and intangible assets".
This material will help you understand how the modernization of fixed assets is going on. You will know which list required documents for modernization and what are the special conditions for this. Let's analyze common mistakes and answer the most common questions.
Modernization of fixed assets: general concept of OS
Fixed assets of the enterprise - part of the property of the organization that generates income, for example, buildings, structures, transport, equipment. The enterprise has the right to accept fixed assets for accounting at its initial cost with all costs, and revaluate them at least once a year in accordance with the established accounting policy.
OS in accounting and tax accounting
In order to put a fixed asset on balance, several conditions must be met:
- Will work for the company and will not be resold.
- Time of use not less than twelve months
- It will bring real income to the organization
If the company has taken into account the fixed asset, then it is necessary to accrue depreciation, at least once a month. Organizations working on the simplified tax system can independently provide for the frequency of depreciation in accounting policy.
There are three ways to write off the value of an asset:
- linear;
- reducing balance method
- method of writing off the cost by the sum of numbers of years of useful life;
There are some differences in accounting for modernization in BU and NU: The costs that affect the initial cost of the object are different in some cases. In tax accounting, it is possible to use a linear and non-linear depreciation method. Upon completion of the modernization in accounting, it is necessary to increase the useful life of the object. There are no restrictions on its increase.
- In tax accounting, this period can not be changed, and its increase is possible within the limits established for it. depreciation group.
OS upgrade and reconstruction
Modernization- completion and retrofitting to change the technological or service purpose of the fixed asset, to acquire new qualities from the object, for example, the ability to work with a higher load.
When taking into account a fixed asset, an accountant usually seeks to choose the same depreciation method and useful life for it in accounting and NU. If the initial cost turns out to be the same, then the task is simplified: the amounts of depreciation charged will be equal. However, after the improvement, depreciation in BU and NU will be different. This can be explained by various depreciation methods in accounting.
Reconstruction– reorganization and improvement of existing equipment in order to improve the quality of work for further operation.
As a reorganization of the OS, its performance increases, its functional purpose. Due to the improvement of fixed assets, their useful life increases, quality improves, and other indicators improve.
How fixed assets are upgraded
Improvement can be carried out in two ways: economic, when the organization copes on its own or with the help of hired employees.
It is worth noting that if the organization did not incur any costs during the upgrade and it was done free of charge, then, accordingly, the initial cost will not change.
In some cases, after modernization, the technical characteristics of the object have changed so much that it began to correspond to the new code of the all-Russian classifier. In this case, you have a new fixed asset. So, it is necessary to determine its initial cost anew according to the rules of the Tax Code.
To carry out modernization, it is necessary to issue an order, appoint responsible persons, establish the timing and reasons.
Postings for modernization and reconstruction
It is reflected as follows:
Debit | Credit | Operation |
08 | 60 | The cost of works of third-party organizations for modernization is reflected |
19 | 60 | Allocated VAT |
68 | 19 | VAT payable |
08 | 10 | Write-off of materials |
08 | 70 | Salary to employees who made improvements |
08 | 69 | Insurance premiums for workers |
08 | 23 | Auxiliary production costs |
01 | 08 | Increased OS cost after reconstruction |
List of documents for modernization
The following documents are required for upgrading:
- internal order
- If the services will be provided by a third-party organization, then it is necessary to conclude a contract for the work, and then draw up an act of acceptance and transfer of the OS object for modernization, thereby protecting yourself from the event that the OS is damaged, then it will be possible to file a claim for damages with the contractor
- If the fixed asset will be moved somewhere, then draw up an invoice for internal movement
- As a result, an act of OS modernization is signed and transferred to the accounting department
Differences between modernization and repair
Modernization is part of the reconstruction, their action is aimed at improvement, so there are no differences between them, and often the other two concepts are confused, such as repair and modernization.
It is more profitable for the enterprise to repair one or another OS, since the costs can be written off immediately, in turn, during the reconstruction they will have to be written off through depreciation, increasing the initial cost. But the IFTS is trying in every possible way, on the contrary, to see modernization in repairs.
If a situation arose in which, for example, you replaced any part in a broken equipment with a more advanced one, there is again a risk of claims from the tax authorities that there was not a repair, but an improvement. However, if the functionality of the object has not changed, then the truth is on your side.
But, in order to protect yourself, it is better to make a conclusion with a technical specialist that a repair has really taken place and draw up a memo for which reason you did not install the same part, but resorted to a more perfect one. If you have doubts about the definition and you are not ready to defend your point of view, it is better to consider the costs as the costs of reconstruction.
If the share of expenses accounts for a significant amount, then the organization can carry out repairs at the expense of a pre-formed reserve. To form such a reserve, it is necessary for a long period of time to include certain amounts in the composition of the cost of production, while postings Debit 20 (23, 25, 26) Credit 96 are formed, where on the credit account. 96 and a reserve is formed.
The amount of monthly deductions for the formation of a reserve is determined as 1/12 of the annual cost of repairs according to the estimate. In the course of the repair, all costs are debited to the account of this reserve using postings: D96 K10 (70, 60, 69 ..).
If, at the end of the year, funds remained on account 96, i.e. the repair cost less than the reserve was stored, then the remaining funds must be written off to account 91, thereby closing account 96. If, on the contrary, the amount of the reserve is not enough for repair work, then the missing funds are either received using additional wiring to increase the reserve background
An example of reconstruction and repair
A tractor is on the balance sheet of the enterprise. Its initial cost is 400,000 rubles. In 2017, the facility was modernized using the contract method. The price of the work was 50,800 rubles (including VAT 7,749 rubles).
The following postings were made in the BU:
postings | Sum | The nature of the operation |
Dt 08 Ct 60 | 43051,00 | cost of modernization costs |
Dt 19 Kt 60 | 7749,00 | included the amount of VAT on modernization |
Dt 01 Ct 08 | 43051,00 | Increase in initial cost |
Dt 60 Kt 51 | 50800, 00 | Payment for work by a third party |
Dt 68 Ct 19 | 7749,00 | Accepted for VAT deduction |
Accounts | Sum | Operation |
Monthly from January to December Dt 20,25,26 Kt 96 | 12500 | Reserve accrual 1/12 |
At the time of repair Dt 96 Kt 10.70.69 | 130 000 | Repair costs |
At the end of the year Dt 26 Kt 96 | 20 000 | Reversal of unused reserve amount |
Answers to common questions
Question number 1. Where should the increase in the initial cost of fixed assets be attributed?
Advice: fix the same procedure for terminating and resuming depreciation on fixed assets transferred for modernization for a period of more than 12 months in the accounting policy for accounting purposes, as in tax accounting.
In this case, the accounting of the organization will not arise temporary differences leading to the formation deferred tax liability .
The period of use of the OS after the upgrade
Modernization can lead to an increase in the useful life of the fixed asset. In this case, for accounting purposes, the remaining useful life of the upgraded fixed asset must be revised (clause 20 PBU 6/01, clause 60 of the Guidelines approved by order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n). It does acceptance committee when accepting a fixed asset from an upgrade:
- based on the period during which it is planned to use the fixed asset after modernization for management needs, for the production of products (performance of works, provision of services) and other income generation;
- based on the period after which the fixed asset is expected to be unsuitable for further use (i.e., physically worn out). This takes into account the mode (number of shifts) and the negative operating conditions of the fixed asset, as well as the system (frequency) of repairs.
This follows from paragraph 20 of PBU 6/01.
The fact that the modernization did not lead to an increase in the useful life, the acceptance committee may indicate in the act on Form No. OS-3.
Issue the results of the revision of the useful life in connection with the modernization of the fixed asset by order of the head.
Situation: how to calculate depreciation in accounting after the modernization of a fixed asset?
The procedure for calculating depreciation after the modernization of a fixed asset is not defined by accounting legislation. Paragraph 60 of the Guidelines approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n provides only an example of the calculation depreciation charges using linear way. So according to the example, with the linear method annual amount depreciation deductions of fixed assets after modernization is determined in next order.
Calculate the annual depreciation rate of fixed assets after modernization using the formula:
Then calculate the annual depreciation amount. To do this, use the formula:
The amount of depreciation that must be charged monthly is 1/12 of the annual amount (paragraph 5, clause 19 of PBU 6/01).
The organization has the right to apply this method of calculation, even if, as a result of the modernization, the useful life of the fixed asset has not changed (remained the same). This is explained by the fact that clause 60 of the Guidelines approved by Order No. 91n of the Russian Ministry of Finance dated October 13, 2003, does not contain conditions for a mandatory increase in the useful life as a result of modernization. This means that the organization can charge depreciation based on the residual value of the fixed asset (taking into account its increase by the amount of modernization costs) and the remaining useful life, regardless of whether this period was extended after the modernization or not. Similar explanations are given in the letter of the Ministry of Finance of Russia dated June 23, 2004 No. 07-02-14/144.
If the organization uses other methods of depreciation (the method of declining balance, the method of writing off the cost by the sum of the numbers of years of the useful life, the method of writing off the cost in proportion to the volume of products (work)), then the annual amount of depreciation can be determined in the following order:
- similar to the order given in the example for the linear method;
- developed by the organization itself.
Fix the applied depreciation calculation option for fixed assets after modernizationin the accounting policy of the organization for accounting purposes .
An example of the reflection in accounting of depreciation on a fixed asset after its modernization
Alfa LLC is engaged in the repair of medical equipment. In April 2015, the organization upgraded the production equipment that was put into operation in July 2012.
The initial cost of the equipment is 300,000 rubles. The useful life according to accounting data is 10 years. The depreciation method is linear. As a result of the modernization, the useful life of the facility increased by 1 year.
Prior to the upgrade of the fixed asset, the annual depreciation rate was 10 percent ((1: 10 years) × 100%). The annual depreciation amount was 30,000 rubles. (300,000 rubles × 10%). The monthly depreciation amount was equal to 2500 rubles. (30,000 rubles: 12 months).
59,000 rubles were spent on the modernization of equipment. The modernization lasted less than 12 months, so depreciation was not suspended. At the time of completion of the modernization, the actual life of the equipment was 33 months. His residual value according to the accounting data is:
300 000 rub. - (33 months × 2500 rubles / month) = 217,500 rubles.
After modernization, the useful life of the fixed asset was increased by 1 year and amounted to 8.25 years (7.25 + 1).
The annual depreciation rate for equipment after modernization was 12.1212 percent ((1: 8.25 years) × 100%).
The annual depreciation amount is 33,515 rubles. ((217,500 rubles + 59,000 rubles) × 12.1212%).
The monthly depreciation amount is 2793 rubles. (33,515 rubles: 12 months).
Third party OS upgrades
BASIC: income tax
Do not take into account the costs of upgrading non-production facilities in tax accounting. This is due to the fact that all costs that reduce tax base, must be economically justified (clause 1, article 252 of the Tax Code of the Russian Federation). That is, they are related to the production activities of the organization.
This procedure follows from paragraph 2 of Article 257, paragraph 2 of Article 259.1, paragraph 2 of paragraph 3 of Article 259.2 tax code RF.
If the organization uses the accrual method, increase the initial cost of the fixed asset after the modernization is completed (clause 1, article 272 of the Tax Code of the Russian Federation).
If an organization uses cash basis, increase the initial cost of the fixed asset as the modernization is completed and the costs of its implementation are paid (clause 3 of article 273 of the Tax Code of the Russian Federation).
Important: if, as a result of the upgrade, the fixed asset changes so that a new fixed asset is created ( new code OKOF), then determine the initial cost of the property in okay, established by Article 257 of the Tax Code of the Russian Federation (letter of the Ministry of Finance of Russia dated July 10, 2015 No. 03-03-06 / 39775).
An example of reflection in accounting and taxation of expenses for the modernization of a fixed asset. The organization applies common system taxation
In June-August 2015, Alfa LLC upgraded equipment in a contract way. The cost of work performed by the contractor amounted to 59,000 rubles, including VAT - 9,000 rubles. The act in the form No. OS-3 was signed in August 2015. The organization applies the accrual method and pays income tax on a quarterly basis. accounting and tax accounting match. depreciation premium organization does not apply. The organization does not perform operations that are not subject to VAT.
The initial cost of the equipment, according to which it is accepted for accounting, is 300,000 rubles. The equipment belongs to the second depreciation group. Therefore, upon acceptance for accounting, a useful life of 3 years (36 months) was established. Depreciation is calculated using the straight-line method.
For accounting purposes, the annual depreciation rate is 33.3333 percent (1: 3 × 100%), the annual depreciation amount is 100,000 rubles. (300,000 rubles × 33.3333%), monthly amount depreciation - 8333 rubles / month. (100,000 rubles: 12 months).
For the purposes of tax accounting, the monthly depreciation rate for equipment is 2.7777 percent (1: 36 months × 100%), the monthly depreciation amount is 8333 rubles per month. (300,000 rubles × 2.7777%).
Since the modernization lasted less than 12 months, during the period of its implementation, the accountant charged depreciation on equipment.
The modernization did not lead to an increase in the useful life of the equipment. Therefore, for the purposes of accounting and tax accounting, the useful life of the upgraded equipment was not revised. In accounting, depreciation on equipment was accrued over 24 months. Therefore, for accounting purposes, the remaining useful life of the fixed asset after modernization is 1 year (36 months - 24 months).
During the period of equipment modernization, the accountant of Alpha made the following entries in the accounting.
June and July 2015:
Debit 26 Credit 02
- 8333 rubles. - depreciation charged on modernized equipment.
In August 2015:
Debit 08 subaccount "Expenses for the modernization of fixed assets" Credit 60
- 50,000 rubles. (59,000 rubles - 9,000 rubles) - the cost of the work of the contractor for the modernization of the fixed asset was taken into account;
Debit 19 Credit 60
- 9000 rub. - VAT is taken into account from the cost of the contractor's work;
Debit 68 subaccount "VAT settlements" Credit 19
- 9000 rub. - accepted VAT for deduction;
Debit 60 Credit 51
- 59,000 rubles. - paid for the work of the contractor;
Debit 26 Credit 02
- 8333 rubles. - accrued depreciation on upgraded equipment;
Debit 01 Credit 08 sub-account "Expenses for the modernization of fixed assets"
- 50,000 rubles. - the initial cost of equipment has been increased by the cost of work on its modernization.
The initial cost of the equipment, taking into account the costs of modernization, amounted to 350,000 rubles. (300,000 rubles + 50,000 rubles). The residual value of the equipment, excluding these costs, is 100,008 rubles. (300,000 rubles - 8333 rubles × 24 months), and taking into account - 150,008 rubles. (100,008 rubles + 50,000 rubles).
For accounting purposes, the annual depreciation rate of equipment after modernization is 100 percent (1: 1 year × 100%), the annual depreciation amount is 150,008 rubles. (150,008 rubles × 100%), monthly depreciation amount - 12,501 rubles / month. (150,008 rubles: 12 months).
In tax accounting, the monthly amount of depreciation after modernization was:
350 000 rub. × 2.7777% = 9722 rubles / month
Since, after the modernization, the monthly amount of depreciation deductions for accounting and tax accounting began to differ, the organization had a temporary difference of 2,779 rubles. (12,501 rubles/month - 9,722 rubles/month), leading to the formation of a deferred tax asset.
From September 2015 to August 2016 (12 months), the accountant reflected the accrual of depreciation charges by postings:
Debit 26 Credit 02
- 12,501 rubles. - depreciation charged on modernized equipment;
Debit 09 Credit 68 sub-account "Calculations for income tax"
- 556 rubles. (2779 rubles × 20%) - accrued deferred tax asset from the difference between monthly depreciation charges for accounting and tax purposes.
In August 2016, the equipment was fully depreciated in accounting (350,000 rubles - 8333 rubles / month × 24 months - 12,501 rubles / month × 12 months). Therefore, since September 2016, the accountant stopped accruing depreciation on it.
In tax accounting, equipment is not depreciated in the amount of 33,344 rubles. (350,000 rubles - 8333 rubles / month × 24 months - 9722 rubles / month × 12 months). Therefore, in tax accounting, the accountant continued to calculate depreciation (letter of the Ministry of Finance of Russia dated March 2, 2006 No. 03-03-04 / 1/168).
From September to November 2016 (3 months), as depreciation was accrued, the Hermes accountant wrote off the deferred tax asset:
- 1944 rubles. (RUB 9,722 × 20%) - a deferred tax asset was written off.
In December 2016, the amount of depreciation deductions amounted to 4178 rubles. (33,344 rubles - 9,722 rubles / month × 3 months). The accountant reflected the write-off of the deferred asset by posting:
Debit 68 subaccount "Calculations for income tax" Credit 09
- 836 rubles. (RUB 4,178 × 20%) - a deferred tax asset was written off.
Modernization of fixed assets. Features of accounting and tax accounting
The service life of the object may change if the modernization of fixed assets is carried out. Features of accounting and tax accounting - on examples.
During operation, fixed assets morally and physically wear out. Modernization of fixed assets is one of the ways to restore a fixed asset. Modernization of fixed assets is the work, as a result of which the technological or service purpose of the object has changed or it has become possible to work (use) with increased loads
Modernization of fixed assets can be performed:
- economic means (i.e., the organization's own resources);
- in a contractual way (i.e., with the involvement of third-party organizations, entrepreneurs or citizens).
Documentation of modernization of fixed assets
The decision to modernize fixed assets must be issued by order of the head of the organization, in which it is necessary to indicate:
- reasons for modernization;
- the timing of its implementation;
- persons responsible for the modernization.
If the modernization of fixed assets is carried out by third parties, then it is necessary to conclude a contract with the contractors. When transferring fixed assets to the contractor, draw up an act of acceptance and transfer of the fixed asset object for modernization. It can be made in any form. If the fixed asset is lost (damaged) by the contractor, the signed act will allow the organization to demand compensation for the losses caused. In the absence of such an act, it will be difficult to prove the transfer of the fixed asset to the contractor.
When transferring a fixed asset for modernization to a special division of the organization (for example, a repair service), an invoice for internal movement should be drawn up (for example, according to a unified form No. OS-2). If the location of the fixed asset does not change during the upgrade, no transfer documents no need to compose.
Upon completion of the modernization, an act of acceptance and delivery of the modernized fixed assets is drawn up (for example, in the form No. OS-3). It is filled out regardless of whether the modernization was carried out in an economic or contract way. Only in the first case, the organization draws up a form in one copy, and in the second - in two (for itself and for contractors). The act is signed:
- members of the acceptance committee established in the organization;
- employees responsible for the modernization of the fixed asset (or representatives of the contractor);
- employees responsible for the safety of the fixed asset after modernization.
Modernization of fixed assets: features of accounting
The costs of upgrading fixed assets change (increase) their initial cost in accounting (clause 14 PBU 6/01). The organization is obliged to keep records of fixed assets according to the degree of their use:
- in operation;
- in stock (reserve);
- for modernization, etc.
Accounting for fixed assets by the degree of use can be carried out with or without reflection on account 01 (03). So, in case of long-term modernization, it is advisable to take into account fixed assets on a separate sub-account "Fixed assets for modernization". Such an operation can be reflected in the entry:
DEBIT 01 (03) sub-account "Fixed assets for modernization" CREDIT 01 (03) sub-account "Fixed assets in operation"
- the fixed asset was transferred for modernization.
When the modernization of fixed assets is completed, a reverse posting is made.
Cost accounting for the modernization of fixed assets
Take into account the costs of upgrading fixed assets on account 08 “Investments in non-current assets”. In order to be able to retrieve data by species capital investments, to account 08 it is advisable to open a sub-account "Modernization costs". Modernization of fixed assets is reflected in the accounting entry:
DEBIT 08 sub-account "Modernization costs" CREDIT 10 (16, 23, 60, 68, 69, 70, 76...)
- the cost of modernization has been taken into account.
Upon completion of the modernization, the costs recorded on account 08 can be included in the initial cost of the fixed asset or recorded separately on account 01 (03). This is stated in paragraph 42.
If you include the costs of the modernization in the cost of fixed assets, make the entry:
DEBIT 01 (03) CREDIT 08 sub-account "Modernization costs"
- fixed assets were modernized and their initial cost was increased.
In this case, reflect the cost of the upgrade in primary documents accounting for fixed assets. For example, in inventory card asset accounting.
In case of separate accounting, write off the costs of modernization to a separate subaccount to account 01 (03). For example, sub-account "Expenses for the modernization of fixed assets":
DEBIT 01 (03) sub-account "Costs for the modernization of fixed assets" CREDIT 08 sub-account "Reconstruction costs"
- the costs of upgrading the fixed asset were written off to account 01 (03).
In this case, open a separate inventory card for the amount of expenses incurred.
Depreciation during the modernization of fixed assets
When carrying out modernization with a period of not more than 12 months, accrue depreciation on the fixed asset. If the modernization of the fixed asset is carried out for more than 12 months, then suspend depreciation on it. In this case, resume depreciation after the upgrade is completed.
For accounting purposes, the specific moment of termination and resumption of depreciation on fixed assets transferred for modernization for a period of more than 12 months is not established by law. Therefore, the organization must establish the month from which depreciation is terminated and resumed for the purposes of accounting for such fixed assets. Wherein possible options can be:
- Depreciation is suspended from the 1st day of the month in which the fixed asset was transferred for modernization. A resumes from the 1st day of the month in which the modernization was completed;
- Depreciation is suspended from the 1st day of the month following the month in which the fixed asset was transferred for modernization. A resumes from the 1st day of the month following the month in which the upgrade was completed.
The selected option of suspending and resuming depreciation for accounting purposes for fixed assets upgraded for a period of more than 12 months, reflect in the accounting policy of the organization for accounting purposes.
Advice
In the accounting policy for accounting purposes, fix the same procedure for terminating and resuming depreciation on fixed assets transferred for modernization for a period of more than 12 months, as in tax accounting. In this case, no temporary differences will arise in the accounting of the organization, leading to the formation of a deferred tax liability.
Useful life of fixed assets after modernization
Modernization can lead to an increase in the useful life of property, plant and equipment. In this case, for accounting purposes, the remaining useful life of the upgraded fixed asset must be revised. This is done by the acceptance committee when accepting a fixed asset from an upgrade:
- based on the period during which it is planned to use the fixed asset after modernization for management needs, for the production of products (performance of works, provision of services) and other income generation;
- based on the period after which the fixed asset is expected to be unsuitable for further use (i.e., physically worn out). This takes into account the mode (number of shifts) and the negative operating conditions of the fixed asset, as well as the system (frequency) of repairs.
Issue the results of the revision of the useful life in connection with the modernization of the fixed asset by order of the head.
Depreciation after modernization of a fixed asset
The procedure for calculating depreciation after the modernization of a fixed asset is not defined by accounting legislation. Paragraph 60 of the Guidelines approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n provides only an example of calculating depreciation charges using the linear method.
According to the example, with the straight-line method, the annual amount of depreciation of the fixed asset after modernization is determined in the following order. Calculate the annual depreciation rate of fixed assets after modernization using the formula:
Then calculate the annual depreciation amount. To do this, use the formula:
The amount of depreciation to be charged monthly is 1/12 of the annual amount.
The organization has the right to apply this method of calculation, even if, as a result of the modernization, the useful life of the fixed asset has not changed (remained the same). This is due to the fact that paragraph 60 of the Guidelines, approved by order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n, does not contain conditions for a mandatory increase in the useful life as a result of modernization. This means that the organization can charge depreciation based on the residual value of the fixed asset (taking into account its increase by the amount of modernization costs) and the remaining useful life, regardless of whether this period was extended after the modernization or not.
If the organization uses other methods of depreciation (the method of declining balance, the method of writing off the cost by the sum of the numbers of years of the useful life, the method of writing off the cost in proportion to the volume of products (work)), then the annual amount of depreciation can be determined in the following order:
- similar to the order given in the example for the linear method;
- developed by the organization itself.
Fix the applied option for calculating depreciation for fixed assets after modernization in the accounting policy of the organization for accounting purposes.
Example
CJSC "Alfa" is engaged in the repair of medical equipment. In April 2016, the organization upgraded the production equipment that was put into operation in July 2013.
The initial cost of the equipment is 300,000 rubles. The useful life according to accounting data is 10 years. The depreciation method is linear. As a result of the modernization, the useful life of the facility increased by 1 year.
Prior to the upgrade of the fixed asset, the annual depreciation rate was 10 percent ((1: 10 years) × 100%). The annual depreciation amount was:
300 000 rub. × 10% = 30,000 rubles.
The monthly depreciation amount was:
30 000 rub. : 12 months = 2500 rubles.
59,000 rubles were spent on the modernization of equipment. The modernization lasted less than 12 months, so depreciation was not suspended. At the time of completion of the modernization, the actual life of the equipment was 33 months. Its residual value according to accounting data is equal to:
300 000 rub. - (33 months × 2500 rubles / month) = 217,500 rubles.
After modernization, the useful life of the fixed asset was increased by 1 year and amounted to 8.25 years (7.25 + 1).
The annual depreciation rate for equipment after modernization was:
(1: 8.25 years) × 100% = 12.1212%
The annual depreciation amount is:
(217,500 rubles + 59,000 rubles) × 12.1212% = 33,515 rubles.
The monthly depreciation amount is:
RUB 33,515 : 12 months = 2793 rubles.
Modernization of fixed assets: features of tax accounting
Do not take into account the costs of upgrading non-production facilities in tax accounting. This is due to the fact that all expenses that reduce the tax base must be economically justified (clause 1, article 252 of the Tax Code of the Russian Federation). That is, they are related to the production activities of the organization.
For industrial property, the costs of upgrading a fixed asset during the period of its implementation do not reduce the tax base for income tax. After the modernization is completed, include the costs of its implementation in the initial cost of the fixed asset (when using the straight-line method) or in the total balance of the depreciation group (subgroup) (when using the non-linear method). Further, these expenses are repaid through depreciation.
Example
In June-August 2016, CJSC Alfa carried out the modernization of equipment in a contracted way. The cost of work performed by the contractor amounted to 59,000 rubles, including VAT - 9,000 rubles. The act in the form No. OS-3 was signed in August 2016. The organization applies the accrual method and pays income tax on a quarterly basis. Accounting and tax accounting data are the same. The organization does not apply depreciation bonus. The organization does not perform operations that are not subject to VAT.
The initial cost of the equipment, according to which it is accepted for accounting, is 300,000 rubles. The equipment belongs to the second depreciation group. Therefore, upon acceptance for accounting, a useful life of 3 years (36 months) was established. Depreciation is calculated using the straight-line method.
For accounting purposes, the annual depreciation rate is 33.3333 percent (1: 3 × 100%), the annual depreciation amount is 100,000 rubles. (300,000 rubles × 33.3333%), the monthly depreciation amount is 8333 rubles / month. (100,000 rubles: 12 months).
For the purposes of tax accounting, the monthly depreciation rate for equipment is 2.7777 percent (1: 36 months × 100%), the monthly depreciation amount is 8333 rubles per month. (300,000 rubles × 2.7777%).
Since the modernization lasted less than 12 months, during the period of its implementation, the accountant charged depreciation on equipment.
The modernization of property, plant and equipment did not result in an increase in the useful life of the equipment. Therefore, for the purposes of accounting and tax accounting, the useful life of the upgraded equipment was not revised. In accounting, depreciation on equipment was accrued over 24 months. Therefore, for accounting purposes, the remaining useful life of the fixed asset after modernization is 1 year (36 months - 24 months).
During the period of equipment modernization, the accountant of Alfa made the following entries in the accounting.
in June and July 2016:
DEBIT 26 CREDIT 02
- 8333 rubles. - depreciation charged on modernized equipment.
in August 2016:
DEBIT 08 sub-account "Expenses for the modernization of fixed assets" CREDIT 60
- 50,000 rubles. (59,000 rubles - 9,000 rubles) - the cost of the contractor's work on the modernization of the fixed asset was taken into account;
DEBIT 19 CREDIT 60
- 9000 rub. - VAT is taken into account from the cost of the contractor's work;
DEBIT 68 subaccount "VAT calculations" CREDIT 19
- 9000 rub. - accepted VAT for deduction;
DEBIT 60 CREDIT 51
- 59,000 rubles. - paid for the work of the contractor;
DEBIT 26 CREDIT 02
- 8333 rubles. - accrued depreciation on upgraded equipment;
DEBIT 01 CREDIT 08 sub-account "Expenses for the modernization of fixed assets"
- 50,000 rubles. - the initial cost of equipment has been increased by the cost of work on its modernization.
The initial cost of the equipment, taking into account the costs of modernization, amounted to:
300,000 + 50,000 = 350,000 rubles
The residual value of the equipment, excluding these costs, is:
300 000 rub. - (8333 rubles × 24 months) = 100,008 rubles.
The residual value of the equipment, taking into account the costs of modernization, is:
100,008 + 50,000 = 150,008 rubles
For accounting purposes, the annual depreciation rate of equipment after modernization is 100 percent (1: 1 year × 100%), the annual depreciation amount is 150,008 rubles. (150,008 rubles × 100%), monthly depreciation amount - 12,501 rubles / month. (150,008 rubles: 12 months).
In tax accounting, the monthly amount of depreciation after modernization was:
350 000 rub. × 2.7777% = 9722 rubles / month
Since, after the modernization, the monthly amount of depreciation for accounting and tax purposes began to differ, the organization had a temporary difference leading to the formation of a deferred tax asset. Its sum is:
12,501 rubles/month - 9722 rubles / month = 2779 rubles.
From September 2016 to August 2017 (12 months), the accountant reflects the accrual of depreciation charges by postings:
DEBIT 26 CREDIT 02
- 12,501 rubles. - depreciation charged on modernized equipment;
DEBIT 09 CREDIT 68 subaccount "Calculations for income tax"
- 556 rubles. (RUB 2,779 × 20%) - a deferred tax asset is accrued from the difference between monthly depreciation charges for accounting and tax purposes.
In August 2017, the equipment was fully depreciated in accounting (350,000 rubles - 8333 rubles / month × 24 months - 12,501 rubles / month × 12 months). Therefore, from September 2017, the accountant stopped accruing depreciation on it.
In tax accounting, equipment is not depreciated in the amount of 33,344 rubles. (350,000 rubles - 8333 rubles / month × 24 months - 9722 rubles / month × 12 months). Therefore, in tax accounting, the accountant continued to accrue depreciation.
From September to November 2016 (3 months), as depreciation accrued, the Hermes accountant wrote off the deferred tax asset:
- 1944 rubles. (RUB 9,722 × 20%) - a deferred tax asset was written off.
In December 2016, the amount of depreciation deductions amounted to 4178 rubles. (33,344 rubles - 9,722 rubles / month × 3 months). The accountant reflected the write-off of the deferred asset by posting:
DEBIT 68 subaccount "Calculations for income tax" CREDIT 09
- 836 rubles. (RUB 4,178 × 20%) - a deferred tax asset was written off.
If the modernization of fixed assets is carried out within a period of not more than 12 months, then continue to accrue depreciation on the fixed asset. If the modernization of fixed assets is carried out for more than 12 months, then suspend depreciation on them. In this case, stop accruing depreciation from the 1st day of the month following the month in which the fixed asset was transferred for modernization. Resume depreciation from the next month after the upgrade is completed.
After modernization (regardless of the period of its implementation), the useful life of the fixed asset can be increased. This is possible if, after the modernization, the characteristics of the fixed asset have changed in such a way that it will allow it to operate longer earlier due date. At the same time, it is possible to increase the useful life within the depreciation group to which the fixed asset belongs. That is, if the maximum useful life was originally set, it cannot be increased after the modernization of the fixed asset. Such rules are established in Article 258 of the Tax Code of the Russian Federation.
Set the new useful life of the upgraded fixed asset by order of the head, drawn up in any form.
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