Accounting
The initial cost of fixed assets changes only in the following cases:
Additions;
Additional equipment;
Reconstructions;
Modernization;
Partial liquidation;
Revaluation of fixed assets.
Tax accounting
The initial cost of fixed assets changes in the following cases:
Completion, additional equipment, modernization (work caused by a change in the technological or service purpose of equipment, a building, structure or other object of depreciable fixed assets, increased loads and (or) other new qualities);
Reconstruction (reconstruction of existing fixed assets, associated with the improvement of production and increasing its technical and economic indicators and carried out under the project for the reconstruction of fixed assets in order to increase production capacity, improve quality and change the range of products);
Technical re-equipment (a set of measures to improve the technical and economic indicators of fixed assets or their individual parts based on the introduction of advanced equipment and technology, mechanization and automation of production, modernization and replacement of obsolete and physically worn-out equipment with new, more productive);
Partial liquidation;
For other similar reasons.
A commercial organization may regularly revalue groups of similar fixed assets at current (replacement) cost no more than once a year (at the beginning of the reporting year) by:
Indexing;
Direct recalculation based on documented market prices.
The amount of revaluation of fixed assets is included in the additional capital of the organization.
The amount of depreciation of an item of fixed assets as a result of revaluation is credited to the account of retained earnings (uncovered loss). The amount of depreciation of an object of fixed assets is included in the reduction of the organization’s additional capital formed from the amounts of the additional valuation of this object carried out in previous reporting periods. The excess of the amount of depreciation of an object over the amount of its revaluation credited to the organization’s additional capital as a result of revaluation carried out in previous reporting periods is charged to the account of retained earnings (uncovered loss).
When revaluing (discounting) the value of fixed assets to market value, the positive (negative) amount of such revaluation is not recognized as income (expense) taken into account for tax purposes, and is not accepted when determining the replacement cost of depreciable property and when calculating depreciation taken into account for tax purposes. in accordance with .
Differences between accounting and tax accounting
Contains the concept of “replacement cost” only in relation to fixed assets put into operation before January 1, 2002. In contrast to the accounting provisions, the Tax Code of the Russian Federation does not provide for changes in the initial value of fixed assets as a result of the revaluation of property at market prices. However, in connection with the changes that were made to the order of the Ministry of Finance of Russia dated June 10, 2002 N 45n, expenses from the depreciation of fixed assets in accounting are shown in the account of retained earnings (uncovered loss). In this regard, there are no differences in accounting for income (expenses) in accounting and tax accounting. However, as a result of a change in the accounting value of a fixed asset, the amount of depreciation charges in accounting changes. In tax accounting it remains the same.
If we are based on PBU, then by fixed assets (FPE) we mean the property of an enterprise used by the company for its intended purpose for more than one year (this can be buildings, cars, equipment, computers, etc.) or those that are leased, but are not intended for further implementation.
Accounting for fixed assets should be kept in account 01. As a basis for accounting, you should take assets at their original cost:
- If the expected service life of the asset is less than one year, then it should be accounted for in account 10 (Materials). It can be written off as expenses, sales, expenses;
- If the cost of fixed assets is less than 40 thousand rubles, then accounting can be kept using inventories. Then the organization can keep records without taking such a large limit on the cost of the operating system. They can be written off immediately after they are put into operation. This point must be separately stated in the company’s accounting policy.
A particular object can be classified as an OS only if it meets the following requirements:
- Only if its purpose is to be used for production needs, to provide basic services or perform the main task of the enterprise, for the needs of management, or to provide it for temporary rental;
- It is assumed that the facility will be used for a long time. This time period must be at least one year. Or this period may be equal to one operating cycle, provided that it is not less than one year;
- There are no plans for further marketing of this product;
- In future activities, the facility will be able to generate additional income for the company.
By expected useful life we mean the period during which the use of this OS will generate a certain income for the company. For some OS groups, this period may be determined based on the amount of products that can be obtained as a result of using the OS.
How is the OS assessed?
As mentioned above, fixed assets are taken into account at their original cost. This cost should be understood as the amount of real costs incurred by the organization related to:
- With the purchase of this OS;
- Delivery;
- Installation;
- Manufacturing;
- Others.
But this cost should not include VAT and other reimbursements. There are exceptions; they are provided for by Russian law.
- The initial cost of the fixed assets that were indicated in the contribution section of the company’s charter capital should be taken from their monetary value, agreed upon with the participants (founders) of the company, or anything else not provided for by the legislation of the Russian Federation;
- In the case of assets received on the basis of a gift, their initial value is assessed at the average cost of a similar object on the market at the time the asset was accepted onto the balance sheet;
- The value of fixed assets received on the basis of an agreement on the fulfillment of obligations by non-financial means may be recognized as the value of assets transferred to this company. This price should be assessed at the value on the basis of which similar assets should be transferred in similar situations.
The value at which the assets were initially accepted on the balance sheet cannot be changed in any way. All exceptions that are permissible are listed in the basic rules of enterprise accounting
Change in OS cost
Analytical accounting for fixed assets allows for a change in value in the following cases:
- Improvements;
- Construction of additional branches;
- Improvement;
- Change in cost;
- Purchase of additional equipment;
- Destruction of a part (in case of partial liquidation).
The organization has the ability to change the value of fixed assets more than once a year at their current value.
In cases where fixed assets are revalued, it is important to consider that in the future they will have to be constantly revalued.
This reflects them in accounting at their current value. A change in the initial cost of fixed assets must be made by recalculating its original or replacement cost. But with the condition that this object has already undergone the recalculation procedure and the amount of depreciation accrued for the entire time during which this OS was used.
All results of revaluation at the beginning of the year must be taken into account in the accounting provisions for the previous year. To create a balance in the new year, it is also important to keep track of:
- The overvalued value of the fixed asset based on the results of revaluation must be transferred to the additional capital of the organization;
- The revalued value of the object, which is equal to the amount of its depreciation, for past periods and attributed to the account of the outstanding debt (or underdistributed income) must be credited when accounting for this loss.
The amount of the total depreciation of fixed assets during revaluation must be transferred to the account of the outstanding loss. Situations in which the total amount of the discounted object can be attributed to a smaller change in addition. the capital of the company, which was formed on the basis of revaluation. In cases where the amount of the depreciation exceeds the amount of the revaluation, this difference should be taken into account in the retained loss. This amount must be disclosed in the company's accounts. When disposing of fixed assets, the amount of its revaluation must be transferred from additional capital to the company's retained earnings.
From a tax perspective, the consequences of all of the above possible reasons for recalculation can become not only a reason for revaluation, but also for changing the useful life of the asset.
For example, the Sigma company decided to upgrade its PC to increase its RAM. The cost of additional memory is 2360 rubles, including VAT 360 rubles. As a result, the initial cost of the PC will be increased by 2000 rubles.
In cases where an object was modernized, the cost of which was less than 40 thousand rubles (before 2011 it was up to 20 thousand rubles, and before 2008 up to 10 thousand) and was written off at a time, then the costs of improvement can be written off in the same way way.
This opinion is shared by the control and enforcement authorities. But it is worth noting that this financial department took a different position. The procedure by which modernization costs were to be recorded should depend on their size. If the costs were higher than the minimum price of the depreciable property (at that time it was 10 thousand rubles), then this object needed to be modernized. As a result, its cost had to be formed again on the basis of modernization costs.
But it is important to be able to distinguish all of the above work from ordinary OS repair. After all, in fact, all the costs that had to be transferred to the repair account do not in any way increase the cost of the OS. It is important not to forget about them when calculating profit taxation in the list of other expenses. This point is spelled out in Article 260 of the Tax Code of the Russian Federation.
For example: The company replaced the car engine with a similar one, equal in power to the previous one. At the same time, all technical indicators of this vehicle remained the same as they were. This means that only repairs were made to maintain the facility in working order. Accordingly, analytical accounting of fixed assets does not provide for an increase in the initial cost of fixed assets.
Increasing the initial estimated price of an asset is a rather difficult process that requires a lot of calculations and other red tape. It is necessary to take into account how much the asset cost from the very beginning, how valuable it is at the moment, what depreciation has been accrued over the entire period of use and many other factors. If at least one of the above is overlooked, the calculations may be made incorrectly. This can pose additional challenges for the entire organization. At a minimum, because this could have an impact on the amount of taxes.
Cases in which it is possible to change the initial cost of fixed assets are given in paragraph 14 of Instruction No. 26. These include:
1) reconstruction (modernization, restoration) of fixed assets, carrying out other similar work;
2) revaluation of fixed assets in accordance with the law;
3) other cases established by law.
In essence, the list of such cases has not changed. It is only necessary to clearly know their rationale, because not in all cases it is contained in Instruction No. 26.
Let us provide a comparative table to the above.
| Until 2013 (Instruction No. 118*) | From January 1, 2013 (Instruction No. 26) |
|---|---|
| The initial cost of fixed assets is not subject to change, except in the following cases: | |
|
1) modernization, reconstruction, partial liquidation, additional equipment, completion, technical diagnostics and corresponding examination, other capital works; |
1) reconstruction (modernization, restoration) of fixed assets, carrying out other similar work; |
| 2) revaluation of fixed assets in accordance with the law; | 2) revaluation of fixed assets in accordance with the law; |
|
3) inclusion at the end of the reporting year in the cost of fixed assets, costs incurred (accrued) after the commissioning of fixed assets and separately accounted for during the reporting year as investments in non-current assets: a) exchange rate differences from the revaluation of accounts payable for obligations related to the acquisition of fixed assets, and amount differences arising in the settlement of obligations related to the acquisition of fixed assets (with the exception of organizations financed from the republican and (or) local budgets based on budget estimates having a current account with bank institutions and maintaining accounting records in accordance with the Chart of Accounts for accounting for the execution of cost estimates of organizations financed from the budget); b) expenses associated with the purchase of foreign currency for making payments when making capital investments in fixed assets. |
3) other cases established by law: a) differences arising during the revaluation of property and liabilities in foreign currency are attributed by commercial organizations to accounts payable (including loans received, borrowings and interest on them), accounts receivable for advances issued for the performance of work and the purchase of equipment and materials arising when making capital investments in unfinished construction projects, fixed assets after commissioning (transfer) of fixed assets and into operation - at the end of the reporting quarter and (or) year for the cost of fixed assets (except for interest on loans and credits received). Justification: sub. 1.2.3 Decree of the President of the Republic of Belarus dated June 30, 2000 No. 15 “On the procedure for revaluing property and liabilities in foreign currency when the National Bank changes foreign exchange rates and reflecting exchange rate differences in accounting” (hereinafter referred to as Decree No. 15); b) expenses associated with the purchase of foreign currency, in the amount of the difference between the purchase rate and the National Bank rate at the time of purchase, are written off by commercial organizations for settlements when making capital investments in unfinished construction projects, fixed assets (including those used for these goals for loans, credits and interest on them) after the commissioning (transfer) of fixed assets into operation - at the end of the reporting quarter and (or) year for the cost of fixed assets (except for interest on loans and credits received). |
|
4) Interest on loans and borrowings received for the purchase of fixed assets, accrued after the commissioning of fixed assets, in accordance with the accounting policies of the organization, can be accounted for as part of: Operating expenses; Investments in non-current assets during the year and at the end of the reporting year are included in the cost of fixed assets (with the exception of interest on overdue loans and borrowings). |
4) Interest on loans and borrowings received for the acquisition (creation) of fixed assets, accrued after the acceptance of fixed assets for accounting, organizations have the right to take into account during the reporting year as part of investments in long-term assets and at the end of the reporting year include them in the initial (revalued) cost of fixed assets. Justification: Resolution of the Ministry of Finance of the Republic of Belarus dated March 11, 2013 No. 16, |
_____________________________
* Instructions for accounting of fixed assets, approved by Resolution of the Ministry of Finance of the Republic of Belarus dated December 12, 2001 No. 118.
Impairment of fixed asset
Organizations have the right, based on the decision of the manager, to reflect in the accounting records at the end of the reporting period the amount of depreciation of a fixed asset, which is equal to the amount of excess of the residual value of the fixed asset over its recoverable value.
Signs of impairment of fixed assets that must be determined for the period from the beginning of the year to the reporting date:
1) a significant (more than 20%) decrease in the current market value of a fixed asset;
2) significant changes in the technological, market, economic environment in which the organization operates;
3) increase in market interest rates;
4) a significant change in the method of using a fixed asset;
5) physical damage to the fixed asset;
6) other signs of impairment of fixed assets.
To reflect the amount of impairment it is necessary to have:
a) documentary evidence of signs of impairment of fixed assets;
b) the possibility of reliably determining the amount of impairment.
If there are signs of impairment of a fixed asset, the organization must determine its recoverable amount at the end of the reporting period. It is the greater of the current market value of the fixed asset minus the estimated costs directly related to its sale and the value in use of the fixed asset.
Conditions under which an asset is considered impaired:
The concept of recoverable amount and its assessment, reflected in Instruction No. 26, is also defined in the international financial reporting standard (IAS 36) “Impairment of assets”.
The value in use of a fixed asset is the present (discounted) value of future cash flows from the use of the fixed asset and its disposal at the end of its useful life (clause 16 of Instruction No. 26).
The present (discounted) value of future cash flows from the use of a fixed asset and its disposal at the end of its useful life is determined by multiplying the discount rate by the amount of future cash flows from the use of a fixed asset and its disposal at the end of its useful life. In this case, future cash flows are determined for a period of no more than 5 years (clause 16 of Instruction No. 26).
The refinancing rate established by the National Bank can be used as a discount rate.
If signs of impairment of a fixed asset in the reporting period cease to occur, then, based on the decision of the head of the organization, the accounting at the end of the reporting period reflects the amount of restoration of impairment of the fixed asset within the accumulated amount of impairment for this fixed asset.
The amount of impairment of a fixed asset accounted for at historical cost is reflected by recording:
D-t 91 “Other income and expenses” - D-t 02 “Depreciation of fixed assets” (separate sub-account).
The amount of reversal of impairment of a fixed asset accounted for at historical cost is reflected by the entry:
Dt 02 (separate subaccount) - Kt 91.
Example 1
On the organization's balance sheet, a computer purchased in 2009 is listed as a fixed asset. The Commission on Depreciation Policy reflected in the protocol signs of depreciation of this fixed asset. The decision to reflect in the accounting records the amount of depreciation of this fixed asset at the end of the reporting period was formalized by order of the manager. The residual value of the computer is 2,000,000 rubles. The market value of the computer is documented and equal to 1,000,000 rubles, the estimated costs of implementation, according to the calculations of the organization's economist, will be 20,000 rubles. According to the accounting policy of the organization, the refinancing rate of the National Bank is used as the discount rate (C)
(30% per annum). The amount of expected future cash flows (D) from the use and disposal of the computer is 200,000 rubles. over the next 2 years.
It is necessary to determine the recoverable cost (RC) of the computer.
BC = RS - RR - C,
where: RS - market value,
РР - sales costs,
V - the value of using a computer.
C = discounted value (DS) = = D / (1 + C / 100)t, where t is the period for which the sum of expected cash flows is calculated. For this example t = 2.
DS = 200,000 / (1 + 0.3)2 = 118,343.
BC = 1,000,000 - 20,000 - 118,343 = 861,657.
The amount of depreciation of the computer will be RUB 1,138,343. (2,000,000 - 861,657).
In accounting, this amount is reflected as follows:
D-t 91-4 - K-t 02 (sub-account “Depreciation of fixed assets”).
Reflection of the revaluation of fixed assets during their revaluation
The emergence of the concept of impairment of fixed assets in 2013 led to a change in the reflection of the revaluation of fixed assets.
If there was a previous impairment...
If, as a result of revaluation, the organization restores the amount of depreciation of a fixed asset previously reflected on account 91, then when reflecting the results of the revaluation, the following entries must be made:
Dt 01 "Fixed assets" - Kt 91
- by the amount of restoration of the depreciation of the original cost of the fixed asset;
Dt 91 - Kt 02
- for the amount of restoration of accumulated depreciation markdown;
Dt 01 - Kt 83 "Additional capital"
- for the remaining amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02
- for the remaining amount of accumulated depreciation of the fixed asset.
If there was no impairment...
If there was no depreciation of the fixed asset, then the entire amount of the revaluation of this fixed asset, determined during the revaluation, must be reflected in traditional entries:
Dt 01 - Kt 83
- by the amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02
- by the amount of additional valuation of accumulated depreciation of fixed assets.
Organizations must apply these rules starting with the revaluation, which will be carried out as of January 1, 2014, subject to the necessary conditions.
Based on the results of the revaluation, a depreciation of the fixed asset was established
The amount of depreciation of a fixed asset established during its revaluation is included in the reduction of the additional fund within the existing balance for this fixed asset (subclause 18.2, clause 18 of Instruction No. 26). This norm puts forward a requirement for organizations, starting from 2013, to maintain analytical accounting for account 83 by name of fixed assets. In addition, the amounts of revaluations of the original cost and accumulated depreciation reflected in account 83 for all previous periods must be reflected in the context of each fixed asset listed on the organization’s balance sheet as of January 1, 2013. At the moment, Instruction No. 26 and other normative -legal acts do not contain information on how to deal with the revaluation amounts reflected in account 83 for fixed assets disposed of before 2013.
When depreciating a fixed asset, you should reflect:
Dt 83 - Kt 01
- by the amount of depreciation of the original cost within the existing balance of the additional fund for this fixed asset;
Dt 02 - Kt 83
- by the amount of the discount on accumulated depreciation within the existing balance of the additional fund for this fixed asset;
Dt 91 - Kt 01
- for the remaining amount of depreciation of the original cost of the fixed asset;
Dt 02 - Kt 91
- for the remaining amount of the writedown of accumulated depreciation on the fixed asset.
If for a fixed asset there is no balance of the additional fund formed as a result of previously carried out revaluations of such an asset, then the entire amount of the depreciation of the fixed asset should be reflected in account 91.
Example 2
When revaluing fixed assets as of January 1, 2014, the company applied the direct valuation method. The initial cost of the fixed asset - a profiling machine - before the revaluation was 100 million rubles, the residual value was 60 million rubles. The revalued value, according to the appraiser's conclusion, amounted to 90 million rubles, the residual value after revaluation was 54 million rubles. The balance on account 83 for the profiling machine is 5 million rubles. In accounting, on December 31, 2013, account entries must be made.
The balance on account 83 is formed as a result of the difference between the amounts of revaluations of the original cost and depreciation. The residual value of the machine in this example is 60%.
Based on the results of the revaluation, it is necessary to discount the original cost by 10 million rubles. (100 million - 90 million), the amount of depreciation - by 4 million rubles. ((100 million - 60 million) - (90 million - 54 million)).
The following must be reflected in the accounting:
Dt 83 - Kt 01- 8,333,333 rub. (5,000,000 × 100 / 60)
- the amount of depreciation of the original cost within the balance of the additional fund for the machine;
Dt 02 - Kt 83- RUB 3,333,333 (8,333,333 - 5,000,000 or 8,333,333 × 40 / 100)
- markdown of accumulated depreciation within the balance of the additional fund for the machine;
Dt 91 - Kt 01- 1,666,667 rub. (10,000,000 - 8,333,333)
- the remaining amount of the depreciation of the original cost of the machine;
Dt 02 - Kt 91- 666,667 rub. (4,000,000 - 3,333,333)
- the remaining amount of markdown of the accumulated depreciation of the machine.
Example 3
Let's use the data from example 2.
When revaluing fixed assets as of January 1, 2015, the revalued cost of the profiling machine amounted to 110 million rubles. The amount of depreciation after revaluation is 55 million rubles.
Dt 01 - Kt 91- 1,666,667 rub.
- restoration of the depreciation of the original cost of the fixed asset;
Dt 91 - Kt 02- 666,667 rub.
- restoration of the markdown of accumulated depreciation;
Dt 01 - Kt 83- 18,333,333 rub. (110,000,000 - 90,000,000- 1,666,667)
- the remaining amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02- 18,333,333 rub. (55,000,000 - 36,000,000 - 666,667)
- the remaining amount of accumulated depreciation of the fixed asset.
The organization bought used equipment in Italy. The equipment was installed, put into operation and accounted for on account 01 as part of the operating system. As a result of operation, a number of shortcomings in the purchased equipment were identified. A claim was sent to the supplier and preliminary consent was obtained for a proportionate reduction in the cost of the equipment. How to reflect a decrease in the value of a fixed asset in accounting and tax accounting if clause 2 of Article 257 of the Tax Code of the Russian Federation defines a list of cases in which it is possible to change the value of fixed assets.
Marina Bembeeva answers, expert
In this case, the change in cost must be reflected as a correction of the error. In accounting, you need to correct the cost using adjusting entries.
Debit 08 Credit 60 REVERSE debt to the supplier;
Debit 01 Credit 08 REVERSE the original cost of fixed assets.
Debit 08 Credit 60 reflects the amount of debt to the supplier after adjustment;
Debit 01 Credit 08 reflects the adjusted initial cost.
In tax accounting, it will be necessary to submit an updated income tax return (if the organization filed it taking into account accrued depreciation on equipment), because expenses (accrued depreciation) are overstated.
1.When the original cost of a fixed asset can be adjusted
Usually, once the initial cost has been established, it is not changed during the operation of the fixed asset. There are only a few isolated cases where this is possible. Thus, a change in the initial cost of a fixed asset is permissible during its completion, additional equipment, reconstruction, modernization, partial liquidation and revaluation. This procedure follows from paragraph 14 of PBU 6/01.
There is, however, another situation when the initial cost of a fixed asset will have to be adjusted. You will have to do this if a significant mistake was initially made when forming the initial cost. The fact is that such an error can lead to a gross violation of the rules for keeping records of income and expenses. And it needs to be fixed. This instruction is in paragraph 4 of PBU 22/2010.
If there is no error and some expenses associated with the acquisition of the object are incurred by the organization after its inclusion in the fixed assets, do not change the original cost. And take into account the costs as part of expenses for ordinary activities.*
Elena
2.Can an investor increase the initial cost of a construction project accepted from the developer and put into operation? After the object was registered, the investor’s obligations under the construction investment agreement increased
Yes, it can, if the initial cost was initially formed incorrectly.
As a general rule, the initial cost of a fixed asset does not change during its operation. There are exceptions to this rule, a list of which is contained in paragraph 2 of Article 257 of the Tax Code of the Russian Federation. A change in the initial cost due to its incorrect formation when putting a fixed asset into operation is not included in the list of such exceptions.
At the same time, if an error is detected for past reporting (tax) periods, the organization has the right to recalculate the tax base for the periods when the error was made (clause 1 of Article 54 of the Tax Code of the Russian Federation). Thus, the Russian Ministry of Finance classifies as such an error, in particular, an increase in the investor’s contractual obligations to the developer as a result of the following circumstances:
– the cost of work according to the act signed before the facility was put into operation was transferred to the investor after it was put into operation;
– the increase in the price of construction work occurred on the basis of a court decision that entered into legal force.
Such additional expenses are included in the expenses that form the initial cost of the object, therefore, the investor can take them into account when calculating income tax ().
This can be done in one of two ways:
– starting from the date of putting the facility into operation, make corrections to the tax registers for accounting for depreciation and submit updated tax returns (clause 1, article 54, and the Tax Code of the Russian Federation);
– recalculate depreciation starting from the date the facility was put into operation and take into account the additional accrued difference at a time in the expenses of the current period (clause 1 of Article 54 of the Tax Code of the Russian Federation).
Such clarifications are contained in the letter of the Ministry of Finance of Russia dated November 12, 2012 No. 03-03-10/126.*
Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank
3.How to correct errors in accounting and financial reporting
How to correct errors of the current period in accounting
In accounting, correct errors of the current period with the necessary adjusting entries.*
Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank
4. In what cases is an organization required to file an updated tax return?
Understatement of the tax base
An organization is required to submit an updated tax return if it has discovered inaccuracies or errors in a previously submitted return that resulted in an understatement of the tax base and incomplete payment of tax to the budget. You need to submit an updated declaration if the period in which the error was made is known. If the period in which the error was made is unknown, the adjusted declaration is not submitted. In this case, the tax base and tax amount must be recalculated in the period in which the error was discovered. This follows from the provisions of Article 81 and paragraph 1 of Article 54 of the Tax Code of the Russian Federation.
This procedure applies to both taxpayers and tax agents. At the same time, tax agents are required to submit updated calculations only for those taxpayers in respect of whom errors were discovered. This is stated in Article 81 of the Tax Code of the Russian Federation. For example, an updated tax calculation (information) on income paid to foreign organizations must be submitted only for those taxpayers whose data was distorted in the initial calculation.*
The first thing an accountant must do when registering a fixed asset is to correctly determine its initial cost. Despite the apparent simplicity of the task, this does not always work out. As practice shows, mistakes made when forming the value of property occur quite often.Author: E. V. Kulikova /expert of the magazine “Topical Issues of Accounting and Taxation/This article is devoted to the procedure for correcting errors in calculating the initial cost of fixed assets of an organization. We hope that the analysis of typical violations presented to our readers will help avoid this kind of trouble.
Typical mistakes made when calculating the initial cost
There are several ways to receive fixed assets (fixed assets) to an organization. The most common of these is acquisition for a fee.
There is probably no point in talking about what costs make up the cost of an organization's OS - there is quite enough material on this topic. We would like to draw the readers' attention to the most common mistakes made when objects are accepted for accounting. Due to the fact that the rules for the formation of the initial cost established by PBU 6/01 and the Tax Code of the Russian Federation are different, the most complex aspects of accounting and tax accounting should be separately considered.
Accounting
| Typical errors in calculating the initial value of non-current assets | A regulatory document whose requirements have been violated |
| Errors resulting from incorrect definition of the accounting unit (one inventory item is counted as several or vice versa). | Clause 6 of PBU 6/01; clause 10 of Order No. 91n |
| Costs directly related to the acquisition or production of fixed assets (including those received as a contribution to the authorized capital, under a gift agreement or under agreements providing for the fulfillment of obligations in kind) are not included in their initial cost. | Clauses 8, 12 PBU 6/01; clauses 26 – 32, 34 – 36 of Order No. 91n |
| Amount differences arising in cases where payment is made in rubles in an amount equivalent to an amount in foreign currency are classified as current expenses of the organization. | Clauses 8, 12 PBU 6/01; clause 25 of Order No. 91n |
| The initial cost of the property is overstated by the amount of general business expenses not directly related to the acquisition and production of OS. | Clauses 8, 12 PBU 6/01; clause 24 of Order No. 91n |
| Expenses for reconstruction and modernization are recognized as expenses of the current period; renovation costs increase the initial cost of the property. | Clause 27 PBU 6/01; clause 42 of Order No. 91n |
| The costs of loans and borrowings to be included in the cost of an investment asset or other property are included in the current expenses of the organization. | Clauses 12, 15, 23 – 31 PBU 15/01; clause 8 PBU 6/01 |
| An incorrect estimate of the value of an object purchased for foreign currency was given. | Clause 16 PBU 6/01, Appendix to PBU 3/2000 |
We remind you that in both accounting and tax accounting, business transactions are reflected in accordance with the rules that were in force at the time of the transaction. Therefore, if an organization identifies cases of incorrect assessment of fixed assets accepted for accounting before 2006, it should be guided by the text of the “old” edition PBU 6/01. Considering that non-current assets can have a long useful life (several decades), special attention must be paid to this.
Tax accounting
The table offered to the reader's attention contains links to some of the most interesting explanations given by the Ministry of Finance on certain issues of the application of tax legislation in 2006.
| Typical errors in calculating the initial cost of depreciable property | Article of the Tax Code of the Russian Federation, the requirements of which have been violated | Documents explaining individual provisions of these articles |
| Costs directly related to the acquisition or creation of the OS are not included in the initial cost. The initial cost of an asset is overstated by the amount of other or non-operating expenses, as well as expenses not taken into account when taxing profits. | Clause 1 of Art. 257 Tax Code of the Russian Federation; Art. 264, 265, 270 Tax Code of the Russian Federation | Letters of the Ministry of Finance of the Russian Federation dated 01.08.2006 No. 03-03-4/2/185, dated 20.04.2006 No. 03-03-4/1/363, dated 17.04.2006 No. 03-03-4/1/341, dated 03.04 .2006 No. 03-03-04/1/314, dated 03/02/2006 No. 03-03-4/1/178, dated 02/27/2006 No. 03-03-04/1/145 |
| The initial cost of operating systems that are created by the organization and are included in the product range does not correspond to the amount of direct costs for their creation. | Clause 1 of Art. 257, paragraph 2 of Art. 319 Tax Code of the Russian Federation | |
| The value of property received as a contribution to the authorized capital is distorted (for example, an object whose value is not documented is accepted at a valuation other than zero). | Subclause 2, clause 1, art. 277 Tax Code of the Russian Federation | Letters of the Ministry of Finance of the Russian Federation dated August 10, 2006 No. 03-03-04/1/625, dated May 10, 2006 No. 03-03-04/1/429 |
| Expenses for completion, additional equipment, reconstruction, modernization or technical re-equipment of OS are recognized as expenses of the current period. | Clause 2 of Art. 257 Tax Code of the Russian Federation | Letter of the Ministry of Finance of the Russian Federation dated April 24, 2006 No. 03-03-04/2/118 |
| Repair costs increase the initial cost of the fixed asset. | Clause 2 of Art. 257 Tax Code of the Russian Federation; clause 1, 3 art. 260 Tax Code of the Russian Federation | |
| The residual value of fixed assets was incorrectly determined when switching from the simplified tax system. | Clause 3 of Art. 346.25 Tax Code of the Russian Federation | Letter of the Ministry of Finance of the Russian Federation dated June 8, 2005 No. 03-03-02-04/1/140 |
| The cost of inseparable improvements to the leased property made by the lessee with the consent of the lessor is incorrectly reflected or not reflected in the depreciable property. | Paragraph 4, paragraph 1, art. 256, para. 5, 6 p. 1 art. 258 Tax Code of the Russian Federation | Letters of the Ministry of Finance of the Russian Federation dated July 27, 2006 No. 03-03-04/2/183, dated August 28, 2006 No. 03-03-04/1/640 |
Most errors in the formation of the initial cost of depreciable property in tax accounting arise due to incorrect classification of expenses associated with its acquisition.
IN Article 257 of the Tax Code of the Russian Federation Only a general rule for calculating the initial cost has been formulated. At the same time, there are costs that, although associated with the acquisition of property, but according to the rules Ch. 25 Tax Code of the Russian Federation belong to other expense groups. For example, interest on loans and borrowings received for the purchase or creation of fixed assets within the limits established Art. 269 Tax Code of the Russian Federation, are taken into account as part of non-operating expenses ( pp. 2 p. 1 art. 265 Tax Code of the Russian Federation). Interest accrued in excess of the specified limits is not taken into account when taxing profits ( pp. 8 tbsp. 270 Tax Code of the Russian Federation).
Unfortunately, tax legislation is not always clear. This is confirmed by the customs duties paid when importing OS - they can be considered as other expenses, or can be taken into account in the original cost ( pp. 1 clause 1 art. 264,clause 1 art. 257 Tax Code of the Russian Federation). What to do in this case?
According to clause 4 art. 252 Tax Code of the Russian Federation The taxpayer independently determines the procedure for accounting for expenses that, with equal grounds, can be attributed simultaneously to several groups of expenses. IN Letter of the Ministry of Finance of the Russian Federation dated February 20, 2006 No. 03-03-04/1/130 organizations are recommended to be guided by the above norm of the Tax Code of the Russian Federation, establishing the procedure for accounting for such costs in their accounting policies.
It is difficult to say how justified this approach is. A number of experts consider it not to comply with the requirements of tax legislation, since the costs of acquiring or creating depreciable property cannot be included as expenses for profit tax purposes ( clause 5 art. 270 Tax Code of the Russian Federation). And the Ministry of Finance in its earlier letters - from27.12.200 5 № 03-03-04/1/451 And from09.11.200 5 № 03-03-04/1/349 - indicates that customs duties are not federal taxes and, being expenses directly related to the acquisition of fixed assets, should be included in the increase in its initial cost. Arbitration practice on this issue is ambiguous (see. Resolution of the Federal Antimonopoly Service of the North-West District dated July 13, 2006 No. A26-10026/2005-213 And FAS MO dated May 22, 2006 No. KA-A41/4376-06).
From the example considered, it is clear how much contradictions and constant changes in tax legislation complicate accounting work. Naturally, this state of affairs contributes to the emergence of not only errors, but also disagreements with the tax authorities. Therefore, if an error is discovered, it would be useful to once again analyze the requirements of the legislation in force at that time, the explanations of the Ministry of Finance and the Federal Tax Service, as well as arbitration practice on this issue.
Consequences of incorrectly determining the initial cost
So, an error has been detected in the OS evaluation. Let's consider what consequences it can lead to.
Firstly, for systematic (two or more times during a calendar year) incorrect reflection of material assets in accounting accounts and reporting, an organization can be fined 5,000 rubles. The basis will be a gross violation of the rules for accounting for income and expenses and objects of taxation ( clause 1 art. 120 Tax Code of the Russian Federation). If such violations were repeated for more than one tax period, the amount of the fine will increase to 15,000 rubles. ( clause 2 art. 120 Tax Code of the Russian Federation).
Secondly, overestimating or underestimating the initial cost of property entails a distortion of a number of accounting indicators: the cost of the reporting period, the residual value of non-current assets, debt to the budget for property and profit taxes as of the reporting date. Inexpensive operating systems may fall into the category of inventories if their cost is unreasonably underestimated. This means that the organization’s assets will be unreliably reflected in the balance sheet.
According to Art. 15.11 Code of Administrative Offenses distortion of any article (line) of the financial reporting form by 10% or more is recognized as a gross violation of accounting rules. For this, officials of the organization, that is, its director and chief accountant, may face a fine of 20 to 30 times the minimum wage.
Thirdly, property and income taxes will be calculated incorrectly. The tax base for property tax is formed based on its residual value according to accounting data ( clause 1 art. 375 Tax Code of the Russian Federation). The amount of property tax relates to expenses that reduce taxable profit ( pp. 1 clause 1 art. 264 Tax Code of the Russian Federation). Therefore, even if the cost of fixed assets is distorted only in accounting, the income tax will still have to be recalculated - the Ministry of Finance draws attention to this Letter dated April 13, 2006 No. 03-06-01-04/84.
The penalty for underpayment of taxes is 20% of the unpaid amount ( clause 1 art. 122 Tax Code of the Russian Federation). If the understatement of the tax base was the result of a gross violation of accounting rules, the organization will be fined in accordance with clause 3 art. 120 Tax Code of the Russian Federation. The amount of the fine will be two times lower, but not less than 15,000 rubles. These two rules cannot be applied simultaneously ( clause 2 art. 108 Tax Code of the Russian Federation).
Penalties are assessed only for late payment of taxes, but not for advance payments on them. But you must pay penalties in any case: Federal Law of July 27, 2006 No. 137-FZ the controversial issue of accrual of penalties in case of untimely or incomplete transfer of advance payments has been resolved ( clause 3 art. 58 Tax Code of the Russian Federation).
Example 1.
In September 2006, Rassvet LLC purchased a passenger car, which was put into operation in the same month.
According to accounting and tax records, the initial cost of the car was 294,000 rubles, the useful life was 5 years. The accounting policy of the enterprise provides for a linear method of calculating depreciation of vehicles. The amount of monthly depreciation charges amounted to 4,900 rubles. (RUB 294,000 / 60 months).
In October, the car was equipped with a new alarm system costing 12,000 rubles. (without VAT).
As a result of the modernization, the amount of depreciation charges since November 2006 increased to 5,103 rubles. ((RUB 294,000 - RUB 4,900 x 1 month + RUB 12,000) / 59 months).
Property tax is calculated at the maximum rate of 2.2%.
Equipping a car with a new alarm system is not an upgrade, since its original characteristics do not change ( clause 27 PBU 6/01). Consequently, the cost of the car was unreasonably inflated.
Since the cost of the alarm system is less than 20,000 rubles. (assuming that the organization decided not to set a different cost limit for fixed assets), this object is reflected as part of inventories. Property tax is not assessed on inventories. Let's assume that an error is discovered after submitting annual reports.
The table shows data for calculating property tax for 2006 before and after the error was discovered:
| date | Residual value of the car before the error was detected, rub. | Residual value of the car after detection of an error, rub. |
| 01.10.2006 | 294 000 | 294 000 |
| 01.11.2006 | 301 100 | 289 100 |
| 01.12.2006 | 295 997 | 284 200 |
| 01.01.2007 | 290 894 | 279 300 |
| 90 922 | 88 200 | |
| Property tax | 2 000 | 1 940 |
In the example under consideration, the overpayment of property tax amounted to 60 rubles. The income tax base will be underestimated by the same amount, so the organization must pay a penalty, and if an error is discovered during a tax audit, a fine. But since the error was identified quickly, and given the magnitude of the distortion, it is obvious that their amount will be insignificant.
For tax purposes, installing a new alarm system is also not considered a vehicle upgrade ( para. 2 p. 2 art. 257 Tax Code of the Russian Federation), but the system itself will be taken into account as part of depreciable property. If its useful life is five years, there will be no need to adjust depreciation in tax accounting.
From the above example it is clear that the “price” of an error made when calculating the initial cost of property may not be high. But correcting it will most likely require considerable labor, because it will take a lot of effort and time to recalculate depreciation charges and draw up updated declarations if the error is discovered after, for example, a year or two.
Correcting a mistake
No matter how time-consuming the work on errors may be, it must be done. And what exactly needs to be done is said in letters of the Ministry of Finance of the Russian Federation dated April 11, 2006 No. 03-06-01-04/83 And from17.07.200 6 № 03-06-01-04/148 . It follows from them that the organization must make corrections to its accounting and tax reporting.
We fix accounting
Correcting errors made when accepting an asset for accounting involves adjusting its original cost and the amount of accrued depreciation. Note that this does not contradict the requirement clause 14 PBU 6/01, according to which a change in the initial cost of an object is possible only in cases of its completion, additional equipment, reconstruction, modernization, partial liquidation and revaluation, because in this case we are talking about clarifying the indicator.
In accordance with clause 11 of Order No. 67n accounting adjustments are made in the following order:
– if an error is discovered before the end of the reporting year, corrections are made to the accounting records in the month in which it was discovered;
– if an error is discovered during the period when the reporting year has already ended, but the annual reporting has not yet been approved, corrective entries are made in December of the reporting year;
– if an error is identified after the approval of the annual financial statements, corrections are not made to the accounting records of the previous reporting period. Changes are made to the statements of the period in which the distortions were discovered ( clause 39 of Order No. 34n).
Example 2.
In August 2005, Sigma LLC, in connection with the expansion of production, purchased new technological equipment requiring installation in the amount of 1,770,000 rubles. (including VAT - 270,000 rubles).
The cost of installation work performed by the contractor amounted to 297,360 rubles. (including VAT - 45,360 rubles). The certificate of work performed by the contractor was signed in November, the cost of the work performed is reflected in the expenses of the current period.
Depreciation on purchased equipment is calculated equally in accounting and tax accounting. In accordance with the Classification of fixed assetsthe object belongs to the 5th group. Its useful life, established by the organization, is 10 years. Depreciation is calculated using the straight-line method.
The line was put into operation in November, and on December 1, the accountant began calculating depreciation.
These transactions will be reflected in the accounting accounts of Sigma LLC as follows:
| Contents of operation | Debit | Credit | Sum, rub. |
August 2005 |
|||
| Equipment requiring installation has been taken into account | 07 | 60 | 1 500 000 |
| The amount of VAT on purchased equipment is reflected | 19 | 60 | 270 000 |
| Payment has been made to the equipment supplier | 60 | 51 | 1 770 000 |
| Transfer of equipment for installation reflected | 08 | 07 | 1 500 000 |
November 2005 |
|||
| Equipment installation work has been accepted | 20 | 60, 76 | 252 000 |
| The amount of VAT on installation work is reflected | 19 | 60, 76 | 45 360 |
| Payment for installation work to the contractor has been transferred | 60, 76 | 51 | 297 360 |
| VAT is included on the cost of installation work | 68 | 19 | 45 360 |
| Equipment put into operation | 01 | 08 | 1 500 000 |
| December 2005 | |||
| VAT is included on the cost of equipment | 68 | 19 | 270 000 |
| Monthly, starting from December 2005 until the end of the useful life of the object | |||
| Depreciation accrued (RUB 1,500,000 / 120 months) | 20 | 02 | 12 500 |
Since the cost of installation work is an expense to bring equipment to a state in which it is suitable for use, it must be included in the initial cost of the object in both accounting and tax accounting. Consequently, the organization’s expenses in November 2005 were unreasonably inflated, and the cost of fixed assets, on the contrary, was underestimated by 252,000 rubles.
Let's assume that this error was discovered only a year later, in November 2006. A corrective entry should be made in accounting, the cost of installation work should be included in the initial cost of the equipment and the accrued depreciation should be recalculated. And since reporting for 2005 has already been submitted, these transactions should be reflected in November 2006.
| Contents of operation | Debit | Credit | Sum, rub. |
| The cost of installation work has been reversed | 20 | 60, 76 | (252 000) |
| The cost of installation work is included in investments in non-current assets | 08 | 60, 76 | 252 000 |
| The initial cost of the equipment is increased by the cost of its installation | 01 | 08 | 252 000 |
| Additional depreciation of equipment was accrued for the period from December 2005 to November 2006 inclusive (RUB 252,000 / 120 months x 12 months) | 20 | 02 | 25 200 |
Correcting tax accounting
If errors are detected that lead to an understatement of the tax amount, the organization is obliged to make the necessary additions and changes to the tax return (as well as to the calculations for advance payments for past reporting periods) ( clause 1 art. 81, clause 1 art. 54 Tax Code of the Russian Federation). If, before the moment when the taxpayer learned about the discovery by the tax authority of non-reflection or incomplete reflection of information, and therefore errors leading to an underestimation of the amount of tax payable, the missing amount of tax and penalties were paid, it, according to clause 3 And 4 tbsp. 81 Tax Code of the Russian Federation, is exempt from paying a fine on the grounds provided for clause 3 art. 120 And Art. 122 Tax Code of the Russian Federation (clause 26 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 5). The updated declaration is submitted to the tax authority on the form that was in force at the time the error was committed.
Ministry of Finance in Letter dated December 9, 2004 No. 03-03-01-04/1/174 draws attention to the following circumstance: if the tax period has not yet ended, this does not relieve the organization from the need to draw up adjustment calculations for past reporting periods.
The Tax Code does not establish the obligation to submit an updated declaration in the event of an overstatement of the amount of tax payable. Nevertheless, it is worth doing, and here's why. Firstly, such a declaration will serve as the basis for offset or refund of the overpayment. To do this, the taxpayer must write a written application to the tax authority ( Art. 78 Tax Code of the Russian Federation). Secondly, timely adjustments will help avoid confusion when reconciling settlements with the tax authority during the inventory. Let us remind you that an inventory of property and liabilities, including liabilities to the budget, is carried out before the preparation of annual financial statements, as well as in other cases provided for clause 27 of Order No. 34n.
Let's return to our example with the purchase of equipment.
The underestimation of the initial cost of equipment led to an underestimation of the tax base for property tax. To correct the error, you should recalculate the residual value of the property as of the 1st day of each month (the property tax rate is 2.2%).
| date | Residual value of the property before the error was discovered, rub. | Residual value of property after discovery of an error, rub. (PS – RUB 1,752,000, depreciation – RUB 14,600) |
| 2005 | ||
| 01.12.2005 | 1 500 000 | 1 752 000 |
| 01.01.2006 | 1 487 500 | 1 737 400 |
| Average annual property value | 229 808 | 268 415 |
| Property tax for 2005 | 5 056 | 5 905 |
| 2006 | ||
| 01.01.2006 | 1 487 500 | 1 737 400 |
| 01.02.2006 | 1 475 000 | 1 722 800 |
| 01.03.2006 | 1 462 500 | 1 708 200 |
| 01.04.2006 | 1 450 000 | 1 693 600 |
| 01.05.2006 | 1 437 500 | 1 679 000 |
| 01.06.2006 | 1 425 000 | 1 664 400 |
| 01.07.2006 | 1 412 500 | 1 649 800 |
| 01.08.2006 | 1 400 000 | 1 635 200 |
| 01.09.2006 | 1 387 500 | 1 620 600 |
| 01.10.2006 | 1 375 000 | 1 606 000 |
| Average annual property value | 1 431 250 | 1 671 700 |
| Advance payment of property tax for 9 months 2006 | 31 487,50 | 36 777,40 |
The property tax turned out to be underestimated by 849 rubles. for 2005
and by 5,289.90 rubles. for 9 months of 2006. To correct the mistake, the organization should clarify the declaration for 2005 and calculations for advance payments for the first quarter, half of the year and 9 months of 2006.
Errors in calculating depreciation deductions and property tax, given in the example, resulted in an overpayment of income tax, so the organization may not make corrections to the tax reporting for 2006. But it is obliged to draw up an updated income tax return for the previous year , since the costs of installing equipment in November 2005 were incorrectly classified as expenses. And although this is a separate topic, we note that this violation led to the premature offset of VAT paid to the contractor.
Operations for adjusting tax payments and accruing penalties should be reflected in the accounting accounts. According to Chart of accounts the amounts of accrued penalties are reflected in the debit of account 99 and the credit of account 68.
Accounting Regulations “Accounting for Fixed Assets” PBU 6/01, approved. By order of the Ministry of Finance of the Russian Federation dated March 30, 2001 No. 26n.
Guidelines for accounting of fixed assets, approved. By Order of the Ministry of Finance of the Russian Federation dated October 13, 2003 No. 91n.
Accounting Regulations “Accounting for Loans and Credits and Costs of Their Use” PBU 15/01, approved. By Order of the Ministry of Finance of the Russian Federation dated August 2, 2001 No. 60n.
Accounting Regulations “Accounting for assets and liabilities, the value of which is expressed in foreign currency” PBU 3/2000, approved. By order of the Ministry of Finance of the Russian Federation dated January 10, 2000 No. 2n.
Order of the Ministry of Finance of the Russian Federation dated December 12, 2005 No. 147n “On introducing amendments to the Accounting Regulations “Accounting for Fixed Assets” PBU 6/01.”
According to paragraph 1 of Art. 257 of the Tax Code of the Russian Federation as amended. Federal Law No. 57-FZ of May 29, 2002 “On introducing amendments and additions to part two of the Tax Code of the Russian Federation and certain legislative acts of the Russian Federation” did not include in the initial cost of depreciable property the amounts of taxes taken into account as expenses in accordance with the Tax Code of the Russian Federation .
Order of the Ministry of Finance of the Russian Federation dated July 22, 2003 No. 67n “On the forms of financial statements of organizations.”
Regulations on accounting and financial reporting in the Russian Federation, approved. By Order of the Ministry of Finance of the Russian Federation dated July 29, 1998 No. 34n.
Decree of the Government of the Russian Federation No. 1 of 01.01.2002 “On the Classification of fixed assets included in depreciation groups.”
Before the amendments made to Art. 172 of the Tax Code of the Russian Federation by Federal Law No. 28-FZ of February 28, 2006, the issue of the procedure for deducting “input” VAT when purchasing OS that require installation remained controversial. Specialists from the Ministry of Finance and the Federal Tax Service insisted on the possibility of using deductions no earlier than the 1st day of the month when depreciation began (letter of the Ministry of Finance of the Russian Federation dated May 3, 2005 No. 03-04-11/94, Federal Tax Service of the Russian Federation dated May 17, 2005 No. MM-6-03/404 @). Despite this, arbitration courts allowed taxpayers to offset VAT already at the time the object was accepted for accounting on account 07 (see, for example, Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated February 24, 2004 No. 10865/03).
