Accounting for expenses, income and financial results standards. “Accounting for income, expenses and the formation of financial results in agricultural enterprises. Conditions for recognition of expenses
WORK RECORDING AND ITS PAYMENT
The main legislative document regulating the organization of labor and its payment is the Labor Code. Russian Federation. It establishes the basic principles of labor regulation, the rights and obligations of employees, the duration and mode of working time, rest time, options for remuneration and labor rationing, requirements for working conditions and for the organization of labor protection, guarantees, compensation, etc.
In accordance with the Labor Code of the Russian Federation, the organization independently, taking into account the opinion of the trade union body, establishes the mode of operation, the system of remuneration and incentives for workers, types of additional payments, etc. To this end, the enterprise must develop and approve the Regulation on remuneration.
Labor relations between the administration and employees are legally formalized through the conclusion of a collective agreement and individual labor contracts.
The collective agreement regulates social and labor relations in the organization,
Employment contract - an agreement between an employer and an employee, according to which the employer undertakes to provide work according to the stipulated labor function, ensure the working conditions provided for by law and the collective agreement, pay wages in a timely manner and in full, and the employee undertakes to personally perform a certain labor function, comply with the internal rules of the organization.
Individuals can work in an organization part-time, under civil law contracts (contracts, assignments, transportation, etc.).
The enterprise should be adjusted
Accounting for the personnel of employees
Accounting for the cost of living labor and its payment
Depending on the size of the enterprise, accounting for the personnel of employees can be carried out by the personnel department or the accounting department. The primary documents for accounting for the movement of personnel are orders (instructions) on hiring (form No. T-1), transfer (form No. T-5), granting vacations (form No. T-6), dismissal (form No. T-8), etc.
When hiring, each employee is assigned a personnel number and a personal card (form No. T-2) is opened containing basic data about the employee.
Based on the order for employment in the accounting department, he opens a personal account for each employee (f. No. T-54). It reflects the full name, position, salary of the employee, category, number of dependents, loan arrears and other data necessary for the full calculation of wages. A personal account is opened for a period of one year, the period of its storage is 75 years. On a monthly basis, information on the amount of accrued wages is entered into personal accounts.
The following types of payments are accrued to employees of the enterprise, which make up the wage fund:
pay for hours worked;
payment for unworked time;
one-time incentive and other payments;
AT pay for hours worked include:
wages accrued at tariff rates, salaries and piece rates for work performed;
compensation payments related to the mode of work and working conditions; payments due to regional regulation of wages; bonuses for work in harmful or hazardous conditions and hard work extra pay for night work; payment for work on holidays and weekends; overtime pay, etc.
stimulating additional payments and bonuses to tariff rates and salaries for high qualifications, professional skills;
bonuses and remuneration of a regular or periodic nature, regardless of the sources of their payment;
AT payment for time not worked payment included:
annual, additional and study holidays;
temporary disability benefits based on sick leave;
during downtime not due to the fault of workers (downtime due to the fault of workers is not paid);
during forced absence;
breaks in the work of nursing mothers (having children under the age of one and a half years);
for the period of training of employees aimed at vocational training, advanced training or training in second professions;
Payment for time not worked is made in the amount of the employee's average earnings for the number of days payable. The average daily earnings are calculated by dividing the wages accrued for the previous 12 months by 12 and by 29.4 (average monthly number of calendar days).
The amount of temporary disability benefits depends on the length of service (up to 5 years - 60% of average earnings, 5-8 years - 80%, from 8 years - 100%).
To one-time incentive and other payments include:
one-time bonuses, regardless of the sources of their payments;
remuneration based on the results of work for the year, monetary compensation for unused vacation;
financial assistance;
social payments , which are not mandatory under the law (contributions for voluntary medical insurance of employees; additional payments to pensions, lump-sum benefits for retiring labor veterans; payment for vouchers for treatment, recreation, as well as excursions and travel at the expense of the organization; payment for travel to the place of work; expenses to pay off loans to employees.
Withholding from wages s employees are subject to the following amounts: income tax individuals, amounts for damage caused to the enterprise, amounts on writ of execution, repayment of loans issued, accountable amounts
The following accounting documents are used to register the costs of living labor and its payment.
1. Time sheet (f. No. T-12).
2. Registration sheet of labor and work performed.
3. Book foreman on accounting of labor and work performed.
4. Calculation of the calculation of wages for livestock workers.
5. Attire for piece work.
6. Waybill of the tractor.
7. Waybill of the car.
Timesheet conducted for each employee. It reflects the hours worked and not worked.
Data from primary documents are accumulated and summarized in two directions:
1. For the calculation and payment of wages to each employee in the payroll (form No. T-49). In it, for each employee, indicate data on accrued income and deductions for their specific types for the month and the beginning of the year. The last column indicates the amount to be paid. Data from the statement is transferred to the personal account of the employee.
2. For the accumulation of cost accounting objects and the calculation of the cost of production, a statement is used for the distribution of wages and social payments. This statement reflects the accrued wages by types of production, divisions of the enterprise, types of products, indicating synthetic, sub-accounts and analytical accounts.
Settlements with personnel for wages are reflected in the passive account 70. The main accounting entries for this account.
1) The accrual of remuneration to employees is reflected in the following accounting entries.
D 20, 23, 29, 08 K 70 - wages were accrued to employees of the main, auxiliary and service industries, employees employed in construction.
D 25, 26 K 70 - wages were accrued to the main specialists and the administration of the enterprise.
2) Simultaneously with salary it is necessary to accrue UST and accident insurance premiums
D 20, 23, 29, 08, 25, 26 K 69-1,2,3 - UST (26%) and contributions (from 0.2 to 8.5%).
3) Calculation of benefits for temporary disability is reflected
D 20, etc. K 70 - for the first 2 days of disability at the expense of the employer
D 69-1 K 70 - for the remaining days at the expense of the social insurance fund.
4) Reflection of deductions from wages
D 70 K 68 - personal income tax withheld - 13%
D 70 K 73-1 - withholding amounts on loans granted
D 70 K 73-2 - withholding the amount of damage caused.
D 70 K 71 - deduction of accountable amounts not returned at the time
5) Reflection of payment of wages
D 70 K 50, 51 - salary paid from the cash desk or transferred to the employee's account
6) Issuance of wages in kind - only with the consent of the employee and in the amount of not more than 20%
D 90 K 43 - written off the cost of products sold as wages
D 70 K 90 - revenue for products sold was recognized and the debt to the employee for wages was repaid
D 90 K 68 - VAT charged on products sold
The synthetic accounting register for account 70 is the journal order No. 70.
ACCOUNTING OF INCOME, EXPENSES AND FINANCIAL RESULTS
At each enterprise, indicators characterizing the effectiveness of its activities are determined. As such indicators can be used: gross income, net income, profit.
All products obtained as a result of the production process form it. gross output of the enterprise. The value of gross output is determined by the costs of living and materialized labor (C + v + t),
The value of gross output without materialized labor forms gross income (v + t).
The difference between gross income and labor costs is net income.
In accounting, it is customary to calculate only realized net income, i.e. profit. Based on the withdrawal of profits, enterprises sum up their commercial activities and determine the profitability of production.
When deriving financial results, a distinction is made between: total profit, balance sheet profit, taxable profit, profit remaining at the disposal of the enterprise, and undistributed balance of profit.
To determine the financial result, the company must keep records of its income and expenses. Accounting for income and expenses is regulated by PBU 9/99 "Accounting for the organization's income" and PBU 10/99 "Accounting for the organization's expenses".
Income- an increase in economic benefits as a result of the receipt of assets (cash, other property) or the repayment of liabilities, leading to an increase in the capital of the organization, with the exception of contributions from property owners.
The income of the organization, depending on their nature, the conditions for obtaining and the activities of the organization, are divided into:
a) income from ordinary activities;
b) other income.
Income from ordinary species activity is
1. proceeds from the sale of products, the performance of work and the provision of services.
2. proceeds from the lease of property, rights to intellectual property (license payments), from participation in the authorized capital of other organizations, if these types of activities are the subject of the organization's activities.
Expenses- decrease in economic benefits as a result of the disposal of assets (cash, other property) or the emergence of liabilities, leading to a decrease in the capital of the organization, with the exception of a decrease in the contributions of property owners.
The expenses of the organization, depending on their nature, conditions of implementation and activities of the organization, are divided into:
a) expenses for ordinary activities;
b) other expenses.
Expenses for ordinary activities are
1. expenses associated with the manufacture and sale of products, the performance of work and the provision of services.
2. Expenses associated with the lease of property, rights to intellectual property (license payments), with participation in the authorized capital of other organizations, if these types of activities are the subject of the organization's activities.
Expenses for ordinary activities are divided into
material costs;
Labor costs;
Deductions for social needs;
Depreciation;
Other costs.
Such expenses during the month are initially accumulated on the account for accounting for production costs - D 20 K 10, 70, 69, 76, 23, 25, 26. - 100,000
at the end of the month one part production costs forms the cost of manufactured products - D43 K20 - 80,000
and the other part remains on account 20 i is work in progress - 20,000.
To account for income and expenses for ordinary activities, account 90 “Sales” is used. The loan reflects income from the sale of products to customers (revenue)
D62 K 90-1 "Revenue" - 118,000 - reflects the proceeds for the products sold.
The debit of the account reflects the cost of goods sold i.e. the cost of its production D 90-2 "Cost of sales" K 43 - 70,000
As well as VAT on products sold D 90-3 "VAT" K 68 - 18,000
Comparison of debit and credit turnover monthly determines the financial result from the sale D 90-9 “Profit (loss) from sales” K 99 - 30000
Other income is:
1. proceeds from the lease of property, rights to intellectual property (license payments), from participation in the authorized capital of other organizations, if these types of activities are not the subject of the organization's activities.
2. profit from participation in joint activities (under a simple partnership agreement);
3. proceeds from the sale of fixed assets and other assets other than products;
4. interest received for the provision of funds for use.
5.. fines, penalties, forfeits for violation of the terms of contracts;
6. assets received free of charge, including under a gift agreement;
7. receipts in compensation for losses caused to the organization;
8. the amount of accounts payable for which the limitation period has expired;
9. other non-operating income.
Other expenses are:
1. Expenses associated with the lease of property, rights to intellectual property (license payments), with participation in the authorized capital of other organizations, if these types of activities are the subject of the organization's activities.
2. expenses associated with the sale, disposal and other write-off of fixed assets and other assets other than products;
3. interest for the use of funds (credits, loans);
4. payment for the services of credit institutions;
5. contributions to reserves for doubtful debts, etc.;
6. fines, penalties, forfeits for violation of the terms of contracts;
7. compensation for losses caused by the organization;
8. the amount of receivables for which the limitation period has expired;
9. transfer of funds to charity, expenses for the implementation of sports and cultural events, recreation, entertainment;
10. expenses from the consequences of emergency circumstances (natural disaster, fire, accident, nationalization of property, etc.).
Account 91 is intended to account for other income and expenses. 3 subaccounts are opened for it (1 - other income, 2 - other expenses, 9 - balance of other income and expenses). Expenses are reflected in the debit of the account
D 91-2 K 01, 10 - the value of written-off assets is written off
D 91-2 K 76 - interest has been accrued for the use of money. means
D 91-2 K 20 - expenses for the maintenance of leased property, etc.
Accrual of other income is reflected in the credit of the account
D 62 K 91-1 - proceeds from the sale of property
D 76 K 91-1 - the due rent, dividends, etc. have been accrued.
Comparison of debit and credit turnover monthly determines the financial result from other activities D 91-9 K 99
Thus, account 99 “Profit and Loss” reflects the overall financial result of the enterprise (both from the main and from other activities). After paying income tax, the net profit of the enterprise remains on this account. The tax charge is reflected in the posting
At the end of the year, after the final calculation of net profit, account 99 is closed, and the amount of profit is transferred to account 84 “Retained earnings (uncovered loss)”
The decision on the distribution of net profit is made only by the owners of the organization. Profit can be directed to the following purposes:
D 84 K 80 - profit is aimed at increasing the authorized capital
D 84 K 82 - profit is aimed at increasing reserve capital
D 84 K 75 - profit is used to pay dividends to owners
The purpose of any commercial organization is to make a profit. In accordance with paragraph 79 of the Regulations on accounting and financial reporting in the Russian Federation (Order of the Ministry of Finance No. 34n dated July 29, 1998), accounting profit (loss) is the final financial result identified for the reporting period, based on the accounting of all business operations of the organization and assessment of balance sheet items according to the rules provided for by accounting legislation. In a broad sense, the financial result (profit or loss) is the difference between income and expenses.
According to paragraph 2 of PBU 9/99 (Order of the Ministry of Finance No. 32n of 05/06/99), an organization’s income is recognized as an increase in economic benefits as a result of the receipt of assets (cash or other property) and the repayment of obligations leading to an increase in the capital of this organization, except for an increase in capital due to the contributions of the founders .
The receipts from other legal entities and individuals named in paragraph 3 of PBU 9/99 are not income of the organization, in particular:
Amounts of value added tax, excises, sales tax, export duties and other similar obligatory payments;
Receipts under commission agreements, agency and other similar agreements in favor of the committent, principal, etc.;
Receipts in the order of advance payment for products, goods, works, services;
Receipts of advances on account of payment for products, goods, works, services;
deposit;
Pledge receipts, if the agreement provides for the transfer of the pledged property to the pledgee;
Proceeds in repayment of a loan, a loan granted to a borrower.
According to paragraph 2 of PBU10/99 (Order of the Ministry of Finance No. 33n of 05/06/99), the expenses of the organization are recognized as a decrease in the economic benefits of the organization as a result of the disposal of assets (cash or other property) and the emergence of liabilities, leading to a decrease in the capital of this organization.
The expenses of the organization are not the disposal of assets on the grounds specified in paragraph 3 of RAS 10/99:
In connection with the acquisition (creation) of non-current assets (fixed assets, construction in progress, intangible assets, etc.);
Contributions to the authorized (reserve) capitals of other organizations, acquisition of shares of joint-stock companies and other securities not for the purpose of resale (sale);
Under commission agreements, agency and other similar agreements in favor of the committent, principal, etc.;
In the order of advance payment for inventories and other valuables, works, services;
In the form of advances, a deposit in payment for inventories and other valuables, works, services;
To repay a loan, a loan received by an organization.
For the purposes of PBU 10/99, the disposal of assets is referred to as payment.
The classification of income and expenses is based on their relation to the subject of the organization's activities.
The subject of the organization's activity is the type of activity for which the organization was created and from which the organization receives the bulk of its income. The subject of the organization's activity is fixed in the constituent documents. According to this classification feature, income and expenses are divided into:
1. income and expenses for ordinary activities. The organization receives and implements them in accordance with the subject of activity.
2. other income and expenses. They arise and are carried out in the process of functioning of an economic entity, but they are not systematic and basic.
Income from ordinary activities is the proceeds from the sale of products, goods, performance of work and provision of services. If the object of the organization's activity is:
Renting out property, income from ordinary activities is income in the form of rent.
Granting for a fee the rights arising from patents for inventions, industrial designs and other types of intellectual property, then the revenue of these organizations will be received in the form of royalties (including royalties and other similar receipts)
Participation in the management company of other organizations, proceeds will be considered income received in connection with this activity (dividends receivable)
Revenue is accepted for accounting in an amount calculated in monetary terms, equal to the amount of receipt of cash and other property, and the amount of receivables. If the actual receipt of money covers only part of the proceeds, then the amount of proceeds is determined by the sum of the receipt of money and receivables. Revenue is recorded based on the price stipulated in the contract with the buyer or customer, and if the price is not specified in the contract, based on the normal selling price. When selling products and goods, works and services on the terms of a commercial loan provided in the form of a deferred or installment payment, the proceeds are taken into account in the full amount of receivables, i.e. taking into account interest on commodity commercial credit.
When selling products, goods, works and services under barter and other agreements providing for the fulfillment of obligations by non-monetary means, the proceeds are determined based on the value of the property received, i.e. based on the normal purchase price. And if the value of the property received or receivable cannot be determined, the proceeds are taken into account based on the price at which, in comparable circumstances, the organization sells its products, goods, works and services (the usual selling price).
If the initial obligations change under the contract in the course of its implementation, then the amount of revenue is subject to adjustment. Revenue is reflected in accounting taking into account all discounts and capes provided.
If the contract price is expressed in foreign currency or in conventional units, and the calculation is made in rubles at the rate of conventional units on the date of payment, then the proceeds are taken into account in the following order:
1) If the organization first reflects the sale, and then payment is received, then the proceeds are taken into account at the exchange rate on the date of the sale, and the incoming payment does not change the proceeds and the exchange differences that arise are attributed to other income (expenses);
2) If products, goods, services and works are sold on the condition of 100% prepayment, then the proceeds are taken into account based on the amount of the prepayment received (at the exchange rate as of the date the prepayment was received). When selling products, the amount of revenue is not adjusted and there are no exchange differences.
3) If products, goods, works and services are sold subject to receipt of a partial prepayment, and the final settlement is made after the sale, then the proceeds are taken into account in terms of covered prepayment - at the exchange rate on the date of receipt of the prepayment, and in terms of uncovered prepayment - at the rate of sale date. Exchange differences arising upon receipt of subsequent payments are included in other expenses.
To recognize revenue in accounting, the conditions provided for in paragraph 12 of PBU 9/99 must be met:
c) there is confidence that as a result of a particular transaction there will be an increase in the economic benefits of the organization. The certainty that as a result of a particular transaction there will be an increase in the economic benefits of the organization, there is a case when the organization received an asset in payment, or there is no uncertainty regarding the receipt of the asset;
To account for income and expenses for ordinary activities, as well as to identify the financial result for them, an active - passive account 90 is intended. The chart of accounts for account 90 provides for the following sub-accounts:
90-1 revenue
90-2 cost of sales
90-4 excises
90-9 profit (loss) from sales
Organizations can open sub-accounts to record sales expenses (sales expenses) and to record management expenses.
If the conditions provided for in clause 12 of PBU 9/99 are met, at the time of transfer of ownership of products, goods, works, services, the buyer is recognized in accounting revenue D62 K90-1 for the selling price of products of goods, works, services, including VAT and excises. At the time of recognition, the revenue of organizations that are VAT payers accrue this tax payable to the budget D90-3 K68, and organizations that are payers of excise taxes accrue excises D90-4 K68.
Thus, the amount of revenue is reflected in the income statement and is determined as the difference between the credit turnover on account 90-1 and the debit turnover on account 90-3 and 90-4.
If the amount of revenue is subject to adjustment (increase in the contract price, setting a surcharge for deferred payment), then the adjustment is reflected in additional entries: D62 K90-1, D90-3 K68, D90-4 K68
If the amount of revenue is adjusted downward (reduction of the contract price, provision of a discount)t, then the adjustment is reflected in the reversal entries: D62 K90-1, D90-3 K68, D90-4 K68
Expenses for ordinary activities are expenses incurred according to the subject of the organization's activity, i.e. expenses associated with the manufacture and sale of products, the purchase and sale of goods, work performed and services rendered.
If the object of the organization's activity is:
Leasing property, the expenses for ordinary activities, are the costs of maintaining the leased property and expenses associated with rental activities
The granting of rights arising from patents and other types of intellectual property, as well as participation in the Criminal Code of other organizations, the expenses for ordinary activities, are expenses incurred in pursuance of the subject of activity.
Expenses for ordinary activities include:
1. Costs associated with the acquisition of raw materials, materials and other inventories
2. Expenses arising directly in the process of processing inventories for the purposes of manufacturing products, work performed and services rendered and their sale, as well as for the purposes of reselling purchased goods (expenses for the maintenance, operation of fixed assets and other non-current assets, as well as for keeping them up to date condition, management costs, etc.)
For recognition in accounting of expenses for ordinary activities, the conditions provided for in paragraph 16 of RAS 10/99 must be met:
the expense is made in accordance with a specific contract, the requirement of legislative and regulatory acts, business customs;
the amount of the expense can be determined;
there is confidence that as a result of a particular transaction there will be a decrease in the economic benefits of the organization. There is certainty that a particular transaction will reduce the entity's economic benefits when the entity has transferred the asset, or there is no uncertainty about the transfer of the asset.
If at least one of the named conditions is not fulfilled in relation to any expenses incurred by the organization, then the organization's accounting records recognize receivables.
Depreciation is recognized as an expense based on the depreciation expense based on the value of the depreciable assets, their useful lives and the entity's depreciation methods.
At the time of recognition of revenue under K90-1 or at the end of the reporting month, when revenue was recognized, the following expenses for ordinary activities are written off in D90-2:
1) Actual cost or accounting price of sold finished products D90-2 K43
If during the month accounting for finished products is carried out at accounting prices, and at the end of the month a deviation of the actual cost of finished products from the accounting cost of finished products is determined, then the deviation at the end of the month is written off D90-2 K43 Deviation
If the output is reflected using account 40, then the deviation at the end of the month is written off D90-2 K40 either by an additional or reversal entry;
2) When selling goods, an expense for ordinary activities is the actual cost of acquisition, the purchase price or the accounting price of goods sold is written off D90-2 K41.
If the products were previously shipped to the buyer, but the revenue for which was not recognized in the accounting, their cost is written off at the time of recognition of the revenue D90-2 K45
3) Organizations performing work, providing services write off the cost of works and services handed over and accepted by the customer D90-2 K20
When selling to the side semi-finished products own production and their cost is recognized as an expense D90-2 K21
When services of auxiliary production are sold to the side, their cost is written off D90-2 K23
When goods, works, services of service industries and farms are sold to the side, their cost is written off D90-2 K29
Management expenses, if they were not distributed by type of product and not included in the cost of production (direct costing method), are written off D90 K26 (a separate subaccount can be opened on account 90 to account for management expenses).
Sales expenses at the end of the month are also written off D90 K44 (a separate sub-account can be opened on account 90 to account for sales expenses or for commercial expenses). Thus, the debit turnover on account 90-2 and sub-accounts of administrative and commercial expenses generates information on expenses for ordinary activities necessary to fill out a profit and loss statement.
Entries on sub-accounts 1,2,3,4, etc. except for 9 to the account 90 are made accumulatively during the reporting year. On a monthly basis, by comparing the debit and credit turnover on synthetic account 90, the financial result (profit / loss) from sales for the reporting month is determined. This financial result is monthly turnover, debited from subaccount 9 to account 90 to account 99. In case of excess of credit turnover on synthetic account 90, profit D90-9 K99 is formed under debit turnover. If the debit turnover is greater than the credit turnover on the synthetic account 90, then a loss D99 K90-9 is formed.
Thus, a synthetic account 90 should not have a balance at the end of the month, however, sub-accounts on account 90 are not closed until the end of the reporting year. This is necessary for the formation of interim financial statements, which are compiled on an accrual basis from the beginning of the year. The profit and loss statement in terms of financial results from ordinary activities contains the following indicators:
1. Proceeds from the sale of goods, products, works, services, net of VAT, excises and other obligatory payments (NET proceeds). This indicator is formed as the difference between the credit turnover on account 90-1 and the debit turnover on account 90-3, 90-4.
2. Cost of sold goods, works, services (without commercial and administrative expenses). This indicator is formed as a debit turnover on account 90-2.
3. Gross profit is formed as the difference between revenue and cost. For the organization of trade, gross profit shows the size of realized trade margins, i.e. the difference between the selling price of goods sold and the purchase price of goods sold.
4. Selling expenses are formed as turnover is reflected in entry D90 K44
5. Management expenses are formed as turnover D90 K26
6. Profit/loss on sales is equal to the difference between the gross profit of selling and administrative expenses.
According to accounting data, profit / loss from sales must correspond to the amount written off D90-9 K99 and D99 K 90-9
At the end of the year, the balance sheet is reformed - an accounting operation in which sub-accounts opened to account 90 are closed to account 90-9. At the same time, the amount of revenue accumulated for the year is written off D90-1 K90-9, the amount of the cost price accumulated for the year D90-9 K90-2, the amount of VAT accumulated for the year D90-9 K90-3 is written off.
If other sub-accounts are opened for account 90 (excises, commercial and administrative expenses), then the amounts accumulated on these sub-accounts for the year are written off D90-9 K90-4, KR, UR.
Thus, at the end of the year, neither in synthetic, analytical accounting, account 90 has a balance at the end of the year, and from the new year, the formation of a new financial result on subaccounts begins.
Accounting for other income
Other income is income other than income from ordinary activities. The list of other income is given in paragraph 7 - 9 of PBU 9/99:
Other income are:
income related to the provision for a fee for temporary use (temporary possession and use) of the organization's assets;
income related to the granting for a fee of rights arising from patents for inventions, industrial designs and other types of intellectual property;
income related to participation in the authorized capital of other organizations (including interest and other income from securities);
profit received by the organization as a result of joint activities (under a simple partnership agreement);
proceeds from the sale of fixed assets and other assets other than cash (except for foreign currency), products, goods;
interest received for the provision of the organization's funds for use, as well as interest for the bank's use of funds held on the organization's account with this bank;
fines, penalties, forfeits for violation of the terms of contracts;
assets received free of charge, including under a donation agreement;
receipts in compensation for losses caused to the organization;
profit of previous years, revealed in the reporting year;
amounts of accounts payable and depositor's debts for which the limitation period has expired;
exchange differences;
the amount of revaluation of assets;
Other income.
Other income is also income arising as a consequence of emergency circumstances of economic activity (natural disaster, fire, accident, nationalization, etc.): the cost of material assets remaining from the write-off of assets unsuitable for restoration and further use, etc.
For recognition in accounting of other income in the form of: rent for the provision of assets for use, proceeds from the sale of fixed assets and other assets, interest received under loan agreements and income from participation in other organizations are recognized in accounting under the same conditions under which revenue paragraph 12 RAS 9/99:
a) the entity has a right to receive the proceeds arising from a specific contract or otherwise appropriately evidenced;
b) the amount of proceeds can be determined;
c) there is confidence that as a result of a particular transaction there will be an increase in the economic benefits of the organization. The certainty that as a result of a particular transaction there will be an increase in the economic benefits of the organization, there is a case when the organization received an asset in payment or there is no uncertainty regarding the receipt of the asset;
d) the right of ownership (possession, use and disposal) of the product (goods) has passed from the organization to the buyer or the work has been accepted by the customer (the service has been rendered);
e) the costs incurred or to be incurred in connection with this transaction can be determined.
If at least one of the named conditions is not fulfilled in relation to the cash and other assets received by the organization in payment, then the organization's accounting records are recognized as accounts payable, and not revenue.
In order to recognize in accounting the proceeds from the provision for a fee for temporary use (temporary possession and use) of their assets, rights arising from patents for inventions, industrial designs and other types of intellectual property and from participation in the authorized capital of other organizations, must be simultaneously observed the conditions defined in subparagraphs "a", "b" and "c".
Recognition of other other income in accounting is reflected in accordance with clause 16 of RAS 9/99:
proceeds from the sale of fixed assets and other assets other than cash (except for foreign currency), products, goods, as well as interest received for the provision of funds for use by an organization, and income from participation in the authorized capital of other organizations (when this is not the subject of the organization's activity) - in the manner similar to that provided for in paragraph 12 of these Regulations. However, for the purposes accounting interest is accrued for each expired reporting period in accordance with the terms of the agreement;
fines, penalties, forfeits for violation of the terms of contracts, as well as compensation for losses caused to the organization - in the reporting period in which the court issued a decision on their recovery or they were recognized as a debtor;
amounts of accounts payable and depository debts for which the limitation period has expired - in the reporting period in which the limitation period has expired;
revaluation amounts of assets - in the reporting period to which the date, as of which the revaluation was made, refers;
other receipts - as they are formed (revealed).
Account 91 is intended for accounting for other income and expenses, other income is reflected in the credit of account 91-1. In particular, receipts for the provision of assets for use (receivable rent) D62.76 K91-1 for the amount of rent, including VAT
D91 K68 for the amount of VAT
License payments and other receipts for the provision of intangible assets for use are reflected D62.76 K91-1; D91 K68
Receipts related to participation in the Criminal Code of other organizations, including interest and other income on securities D76-3 K91-1
Profit received by the organization as a result of joint activities (under a simple partnership agreement) D76 K91-1
Proceeds from the sale of fixed assets and other assets (materials, intangible assets, securities, except for products and goods) D62 K91-1 on the sale value of assets, including VAT
D91 K68 for the amount of VAT (additional accounting for the sale of fixed assets, intangible assets, materials)
Interest to be received, as well as interest paid by the bank on the balance of funds on the current account D76.51 K91-1.
Fines, penalties, forfeits for violation of the terms of contracts to be received from counterparties D60,62,76 K91-1
Assets received free of charge: D 10, 41, 58 K 91-1
Fixed assets received free of charge are recognized as income as depreciation is accrued:
D 20, 25, 26 ... K 02, D 98-2 K 91-1
Receipts in compensation for losses caused, organizations D76 K91-1
Profit of previous years revealed in the reporting year D76,68,69 K91-1
The amount of accounts payable and depositor's debts, for which the claim period has expired (3 years) D60,62,76-4 K91-1
Positive exchange differences D50,52,60,62,76 K 91-1
The amount of revaluation of financial investments (securities for which the current market value is determined) D58 K91-1
Other income, excess assets identified during the inventory D50,10,43,41 ... D91-1
The cost of materials remaining after the write-off or dismantling of fixed assets D10 K91-1
Other income also includes receipts as a result of emergency circumstances, economic activities (fires, floods, natural disasters), in particular the cost of material assets from the write-off of objects that are not suitable for restoration D10 K91-1
Accounting for other expenses
To account for other expenses, subaccount 2 to account 91 is intended. The debit of account 91-2 reflects:
expenses for the lease of property D91-2 K02,10,70, 69, 60, 76 ... if the lease is not a normal activity of the organization, additional accounting for the lease of fixed assets.
Expenses associated with the provision of intangible assets for use D91-2 K05.76 ...
Costs associated with the Criminal Code of other organizations D91-2 K76,71,60 ...
Expenses associated with the sale and disposal (other write-off of fixed assets and other assets), in particular, the residual value of fixed assets and intangible assets are written off D91-2 K01VOS,04
D91-2 K10.58 the book value of disposed materials, securities is written off
D91-2 K60,76,23.... Reflects the costs associated with the disposal
D91-2 K66.67 interest payable (except for interest included in the cost of an investment asset)
D91-2 K51.46 Expenses related to payment for services of credit institutions
Deductions to valuation reserves:
D91-2 K41 to the reserve for depreciation of material assets
D91-2 K59 to the reserve for depreciation of financial investments
D91-2 K63 to reserve for doubtful debts
D91-2 K96 reserves associated with the recognition of estimated liabilities
D91-2 K60,62,76 Fines, penalties, forfeits for violation of the terms of the contract payable by the counterparty
D91-2 K76 compensation for losses caused by the organization
D91-2 K02,05,76… Losses of previous years recognized in the reporting year
D91-2 K58 the amount of depreciation of assets (securities, financial assets for which the current market value is determined)
D91-2 K50,60,62,76,66,67 negative exchange rate differences
D91-2 K60,76,71,10,41 transfer of funds to charity, expenses for sports events, recreation, corporate events
D91-2 K76.71 Court costs and arbitration disputes
D91-2 K20,23,25 Expenses for the maintenance of mothballed production facilities and facilities
D91-2 K94 the amount of shortage of material assets in the absence of guilty persons, or if the recovery is refused by the court
D91-2 K01,10,41,43 Losses of property as a result of extraordinary circumstances
D91-2 K60,76,70,69 ... expenses for the elimination of emergency circumstances
Entries on accounts 91-1 and 91-2 are made accumulatively during the reporting year. On a monthly basis, by comparing the credit turnover on account 91-1 and the debit turnover on account 91-2, the financial result from other operations is determined. The excess of credit turnover over debit turnover generates profit from other operations, which is written off D91-9 K99. The excess of debit turnover over credit forms a loss D99 K91-9, i.е. synthetic account 91 balances per reporting date should not have, but according to sub-accounts, there are balances until the end of the year. At the end of the year, when the balance sheet is reformed, the final turnovers close subaccounts to account 91, with internal entries to subaccount 91-9. And for the accumulated amount of other income for the year, the accounting entry D91-1 K91-9 is made, and for the accumulative amount of other expenses for the year, the entry D91-9 K91-2 is made. Thus, at the end of the year, account 91 does not have a balance in synthetic and analytical accounting.
Profit and Loss Accounting
The final financial result of the organization's activities is formed on an active - passive account 99. The final financial result consists of:
1. Profit / loss on sales D90-9 K99 (profit)
2. From the result of other operations D91-9 K99 (profit) / D99 K91-9 (loss)
3. Accrued tax payments for income tax
D99 K68.69 Penalties on taxes and fees payable to the budget and off-budget funds
Thus, the final profit / loss of the reporting period is the balance on the synthetic account 99 (if the organization has a credit balance - profit, debit - loss)
Entries on account 99 are made on a cumulative basis, i.e. cumulatively from the beginning of the year. At the end of the year, the balance sheet is reformed, in which the profit / loss of the reporting year is added to retained earnings and losses of previous years, i.e. account 99 is closed at the end of the year.
D99 K84 for the amount of profit generated during the year
D84 K99 for the amount of profit received for the year, that is, the balance on account 99 does not have
In addition, when reforming the balance sheet, entries for closing sub-accounts to accounts 90 and 91:
And there will be no balance on these accounts.
The reformation is carried out by the final turnovers of the year, and from the new year a new financial result will be formed
As of January 1, CJSC Gorizont has 37,000 rubles on its balance sheet. reserve capital and 94,000 rubles. additional capital.
Dt 82 Kt 84 - 37,000 rubles. - part of the loss was repaid at the expense of the reserve fund;
Dt 83 Kt 84 - 94,000 rubles. - a part of the loss was repaid at the expense of additional capital. The amount of uncovered loss of CJSC Gorizont amounted to 19,000 rubles. (150,000 - 37,000 - 94,000).
The net profit of the organization is the basis for the accrual of dividends and other distribution of profits.
Schematically, the formation of net profit (loss) can be represented as follows:
Accounting for other income and expenses
Account 91 “Other income and expenses” is active-passive, has no balance at the end of the month.
Account 91 reflects income and expenses not related to the normal activities of the organization.
To account for other income, subaccount 91/1 is used. The receipt of income is reflected in the credit of this sub-account.
To account for other expenses, subaccount 91/2 is used. Expenses are reflected in the debit of this sub-account.
Every month, the difference between the amount of income and the amount of expenses reflected in sub-accounts 91/1 and 91/2 is reflected in sub-account 91/9. On sub-accounts 91/1 and 91/2, data are accumulated throughout the year. This information is used to compile the income statement and other financial statements. On a monthly basis, the balance of other income and expenses is written off from sub-account 91/9 to account 99 “Profit and Loss”.
[Amount of other income (credit turnover for the reporting month on subaccount 91/1)] - [Amount of other expenses (debit turnover for the reporting month on subaccount 91/2)] = [Balance of other income and expenses]
The balance of other income and expenses shows the financial result from other activities of the organization - profit or loss.
On December 31, after determining the balance of other income and expenses for December by internal entries on sub-accounts (account 91), all sub-accounts opened to account 91 must be closed:
Dt 91/1 Kt 91/9 - subaccount 91/1 (credit balance) is closed;
Dt 91/9 Kt 91/2 - subaccount 91/2 (debit balance) is closed.
As a result of these postings, debit and credit turnovers on sub-accounts of account 91 will be equal. As of January 1 of the next year, the balance of both account 91 as a whole and all its sub-accounts will be equal to zero.
Example.
The results of the organization's activities in the reporting month are characterized by the following indicators: proceeds from the sale of products in the amount of 180,000 rubles, including VAT - 27,458 rubles; expenses attributed to the cost of goods sold amounted to 110,000 rubles, of which the costs of the main production - 100,000 rubles; management expenses - 10,000 rubles; other income received: under a simple partnership agreement - 15,000 rubles; fines for violation of business contracts - 5000 rubles. Other expenses incurred: for paying interest on a loan - 2,500 rubles; bank services - 1000 rubles; taxes paid at the expense of financial results, -1500 rubles; received losses from the write-off of material assets destroyed by fire - 5 thousand rubles; accrued income tax in the amount of 12 610 RUB. Formation of financial results for the reporting month: Dt 62 Kt 90/1 - 180,000 rubles. - Reflection of proceeds from the sale of products.
D-t 90/3 Set 68 - 27,458 rubles. - Reflection of VAT on revenue.
D-t 90/2 Set 20 - 100,000 rubles. - reflection in the cost of goods sold of the costs of the main production.
D-t 90/2 Set 26 - 10,000 rubles. - Reflection in the cost of goods sold of management expenses.
D-t 90/9 Set 99 - 42,542 rubles. - attributing the amount of profit from the sale of products to the profit and loss account.
Dt 76/3 Kt 91/1 - 15,000 rubles. -- Reflection of income under a simple partnership agreement .
Dt 76/2 Kt 91/1 - 5000 rubles. - Reflection of recognized fines for violation of business contracts.
Dt 91/2 Kt 66 - 2500 rubles. - reflection of accrued interest on the loan.
Dt 91/2 Kt 76/5 - 1000 rubles. - reflection of expenses for payment of banking services.
Dt 91/2 Kt 68 - 1500 rubles. - reflection of the accrued amounts of taxes paid at the expense of profits and losses.
Dt 91/9 Kt 99 - 15,000 rubles. - attributing the amount of profit from other income and expenses to the profit and loss account.
D-t 91/2 Set 10 - 5000 rubles. - reflection of the amount of loss from the write-off of materials destroyed by fire.
Dt 99 Kt 68 - 12,610 rubles. - Calculation of income tax.
For the reporting month, taxable income amounted to 52,542 rubles. (42,542 + 15,000 - 5,000), income tax at a rate of 20% - 10,508 rubles, financial result of the organization's activities - 42,034 rubles. (42,542 + 15,000 - 5,000 - 10,508).
Accounting for deferred income
In accordance with the Regulation on accounting and financial reporting in the Russian Federation (clause 81), income received in the reporting period, but related to the following reporting periods, is called deferred income.
Deferred income is recorded on account 98 "Deferred income" - a passive, balance sheet account. The credit of the account takes into account all types of income relating to future periods, and the debit - their write-off.
4 sub-accounts can be opened for account 98:
- "Income received on account of future periods."
- "Free Income".
- "Upcoming receipts of debts for shortfalls identified over past years."
- "The difference between the amount to be recovered from the perpetrators and the book value for shortages of valuables."
On sub-account 98/1, the following incomes can be taken into account: rent or rent, utility bills, subscription fees for using communication facilities, etc.
When reflecting the amounts of income relating to future reporting periods, the following entries are made:
Dt 50, 51, 52, 55 Kt 98/1 - for the amount of income received relating to future reporting periods;
Dt 58 "Financial investments" Kt 98/1 - for the amount of accrued payments against deferred income.
As the reporting period begins, the amounts recorded under the credit of account 98/1 are transferred to the corresponding accounts:
Dt 98/1 Kt 90 “Sales” - for the amount of deferred income (for example, payment for utilities received in advance, etc.) included in the proceeds from the sale of the reporting period to which they relate.
Dt 98/1 Kt 91 “Other income and expenses” - for the amount of deferred income (for example, rent) included in other income.
In the reporting period, 000 "Don" received a quarterly rent for the lease of premises in the amount of 7,080 rubles relating to the future period, including VAT of 1,080 rubles. The following entries will be made in the account:
Dt 76 Kt 98/1 - 7080 rubles. - for the amount of accrued rent for future periods;
Dt 51 Kt 76 - 7080 rubles. - for the amount of rent received on the settlement account for the quarter;
D-t 98/1 Set 68 - 1080 rubles. - for the amount of VAT charged.
The amount of payment without VAT is subject to write-off to operating income;
Dt 98/1 Kt 91 - 2000 rubles. (6000: 3) - for the amount of the quarterly payment for one month of the quarter.
The cost of assets received by the organization free of charge is recorded on sub-account 98/2. Accounting for such transactions is set out in the relevant topics.
The movement of forthcoming debt receipts for shortages identified in the reporting period for previous years is reflected in sub-account 98/3.
By decision of the court, the sum of the shortfall in the amount of 2,500 rubles, revealed in the reporting period for previous years, was awarded for recovery from the guilty person. The shortfall must be refunded to the cashier in full.
The following entries will be made in the account:
Dt 94 Kt 98/3 - 2500 rubles, - for the amount of the shortage debt awarded by court decision;
Dt 73/2 Kt 94 - 2500 rubles. - for the amount of shortage;
Dt 50 Kt 73/2 - 2500 rubles. - for the amount of the shortage brought to the cash desk;
D-t 98/3 Set 91 - 2500 rubles. - for the amount of debt received (after payment)
Sub-account 98/4 takes into account the difference between the amount recovered from the perpetrators for the missing values and the value recorded in the organization's accounting records.
The revealed amount of the difference is reflected in the accounting entry: Dt 73/2 Kt 98/4.
The organization found a shortage of materials damaged through the fault of a financially responsible person. The actual cost of materials is 20,000 rubles, the market value is 25,000 rubles. When purchasing materials, VAT was paid - 4000 rubles. By order of the manager, the shortage must be compensated in the amount of the market value of the materials. The following entries will be made in the account:
D-t 94 Set 10 - 20,000 rubles. - the amount of the actual cost;
Dt 73/2 Kt 94 - 20,000 rubles. - the amount of the shortage is attributed to the financially responsible person at the actual cost;
Dt 73/2 Kt 68 - 3600 rubles. - on the amount of VAT attributed to the guilty person;
Dt 73/2 Kt 98/4 - 50,000 rubles. - the amount of the difference between the market and actual cost of materials;
Dt 70 Kt 73/2 - 28,600 rubles. - for the amount of shortage withheld from the wages of the guilty person;
Dt 98/4 Kt 91 - 5000 rubles. - the sum of the difference between the market and actual cost of materials is charged to income.
Analytical accounting for account 98 is organized in the reserve of each open sub-account.
Creation and use of a reserve for doubtful debts
In modern conditions, when the probability of bankruptcy of business entities is quite high, almost every enterprise is faced in its work with the inability to receive payment from the debtor. As a result, a debt is formed on the balance sheet of the enterprise, the possibility of repayment of which is in doubt - the so-called doubtful debt.
Doubtful debt is any debt to the organization, subject to two conditions:
- if it is not repaid within the terms established by the agreement;
- if it is not secured by a pledge, surety, bank guarantee.
Doubtful debt refers to debt that is highly likely not to be repaid in deadlines, which involves determining such a probability by the organization itself.
According to new edition clause 70 of Regulation No. 34n, any doubtful receivables, including doubtful debts on loans, which are not repaid or with a high degree of probability will not be repaid within the terms established by the agreement, and are not secured by appropriate guarantees, should be reserved. In addition, advance payments made (i.e. suppliers' debt to ship goods or perform work) also fall under the category of doubtful debts. By not creating a provision, the organization is misleading its external users, reflecting the amount of doubtful receivables in liquid assets.
To determine the amount of the reserve, you can use the methodology provided for tax accounting.
The amount of the reserve is determined separately for each doubtful debt, depending on its maturity.
Since the amount of the created reserve is taken into account as part of other expenses that reduce taxable profit, the creation of the reserve allows you to reduce the amount of income tax. The amount of the reserve for doubtful debts can be determined only by conducting an inventory of receivables on the last day of the reporting (tax) period. If enterprises pay income tax on a quarterly basis, it is advisable to conduct an inventory to identify doubtful debts at the end of the quarter. Enterprises that calculate income tax on a monthly basis should conduct an inventory of receivables on a monthly basis.
The inventory is carried out on the basis of the order of the head of the organization. A certificate is attached to the inventory act, which indicates the names, numbers and dates of documents confirming the receivables of contracts, invoices, etc.
Accounting for reserves for doubtful debts is kept on passive account 63 "Reserves for doubtful debts". The creation (increase) of the reserve is reflected in the credit of account 63, and the use - in the debit of the account.
In accounting, the creation of a reserve for doubtful debts is reflected in the entry
Dt 91, sub-account 2 2 “Other expenses” Kt 63 “Reserves for doubtful debts”.
The write-off of doubtful debts is reflected in accounting as follows:
Dt 63 “Reserves for doubtful debts” Kt 62 “Settlements with buyers”, 76 “Settlements with various debtors and creditors” - in the part covered by the reserve.
If the entire amount of the reserve is not spent by the end of the year, the balance as of December 31 is included in other income. In accounting, this is reflected in the posting:
Dt 63, sub-account "Reserves for doubtful debts" Kt 91, sub-account 1 "Other income".
In the financial statements, it is necessary to reflect the receivables minus the amount of the created reserve, i.e. the credit balance on account 63 is deducted from the amount under the item "Accounts receivable".
As of June 30, 2012, the unused balance of the allowance for doubtful debts amounted to 65,000 rubles.
Accountant 000 "Don", having carried out an inventory of accounts receivable, revealed doubtful accounts receivable for some counterparties. At the same time, in relation to one of the debtors - CJSC "Granit" - information was received that this company is in the process of liquidation and it does not have funds to pay off the debt.
The total amount of the reserve, calculated based on the amount of receivables, is 250,000 rubles.
The accountant will add an additional 185,000 rubles to the reserve.
Dt 91/2 Kt 63 - 185,000 rubles (250,000 - 65,000) - the reserve for doubtful debts for the II quarter was increased.
In August 2012, the accountant recognized the uncollectible debt of CJSC Granit in the amount of 70,000 rubles, since the debtor was liquidated. Having received a document confirming the liquidation, the accountant wrote off the amount of bad debt at the expense of the reserve:
Dt 63 Kt 62 - 70,000 rubles. - the uncollectible receivables of ZAO Granit were written off at the expense of the reserve;
Dr. 007 - 70,000 rubles. - Written-off receivables are reflected off the balance sheet. In the event that the debtor has fully or partially repaid the debt for which the reserve was created, it must be restored to the debt repayment debt.
Dt 51 (50) Kt 62 - the debt of the buyer (customer) has been repaid;
Dt 63 Kt 91/1 - the reserve has been restored in terms of debt repayment.
In tax accounting, you can choose whether to create a reserve for doubtful debts or not. The decision made is fixed in the accounting policy of the organization.
If an organization does not form a reserve in tax accounting, then when creating a reserve for doubtful debts, a permanent taxable difference arises in accounting, which entails the recognition of a permanent tax liability in accounting on the basis of paragraph 7 of PBU 18/02:
Dt 99 Kt 68.
The amount of the created reserve reflects a permanent tax liability.
Analytical accounting on account 63 “Reserves for doubtful debts” is maintained for each created reserve.
Accounting for financial results is a very important process, because it is from correctly completed accounting forms that the owners of the company and its managers receive the data they need to make important economic decisions in the future. Profit is taxed, which is a significant source of formation of the state budget. Finally, it is the basis on which investments can be made in the further development of the enterprise.
If incorrect entries are made in accounting or profit is calculated incorrectly, then this may threaten the company with certain sanctions from the supervisory authorities. In addition, such a distortion of information can lead to the fact that significant management decisions will be made incorrectly.
How are financial performance determined?
The financial result is the delta between the income and expenses of the company in the reporting period. If in the process of this calculation a positive value is obtained, then this means that the organization has received a profit that it can use at its discretion, including to increase equity. If the value is negative, then the company has suffered losses.
This calculation is very important for assessing the effectiveness of the functioning of the organization as a whole. A decrease in profit or its negative value is an alarming signal that something is going wrong. The firm may need to:
- Reduce production;
- Review your marketing policy;
- Change the composition of managers, etc.
In any case, this is an important incentive for both management and owners to develop measures to reduce losses.
On the other hand, high profits are a positive sign that can stimulate a commercial organization to expand its activities. The funds can be used for investment in production (according to statistics, in developed countries up to 70% of profits are allocated for these purposes) and social development, it is from them that dividends are paid to the owners of securities. This is the basis for updating production assets and further improving products, which over time can become morally obsolete.
Profit can be divided into two types:
- accounting;
- Economic.
The first concept has been used in our country since 1999. This is the financial result calculated on the basis of all accounting data. This definition is somewhat narrow and does not take into account a large number of alternatives for using the company's own funds.
Economic profit is the increase in the value of the enterprise. It has a fundamentally different meaning. For example, if a company spent 100 thousand rubles on the development of a new product line and received revenue of 110 thousand rubles during the month, then its monthly accounting profit is 10 thousand rubles. On the other hand, simply by investing this amount in a bank, the company could receive 12,000 rubles from the top. This means that its economic profit is negative, because the firm did not use the most profitable of all possible alternatives for using funds.
Both of these definitions reflect the financial result of the organization in an abstract way. When we are talking about the process of planning or economic analysis at the enterprise, specific indicators are calculated, for example, gross profit, profit before tax, etc. It is these data that allow us to judge how successful the company is in its field of activity.
What are the profit functions in a market economy?
Profit without exaggeration can be called the most important economic category, because it performs a number of significant functions:
- It shows how effective the company is in the chosen direction. This serves as the basis for the owners to evaluate the professionalism of management, as well as for the formation of a positive attitude towards a commercial organization on the part of consumers of its products;
- It becomes the basis for further expansion of production, improvement of business processes, improvement of working conditions for personnel, improvement of goods or services;
- Profit is one of the sources that fill the state budget (profit tax). It is from it that money is drawn for federal and regional programs, infrastructure development and many other important needs;
- It stimulates the further development of the company. When an organization receives a good financial result, it gives its managerial staff to understand that even greater success can be achieved in the chosen direction. As a result, there is an expansion, coverage of related industries, etc.
Correct accounting of financial results is very important, because it is thanks to him that the right management decisions can be made that will lead the company to prosperity.
What is the structure of the company's financial result?
The financial result of any organization can be divided into two relatively independent blocks:
- Profit received from the main activity. This is the money that the company receives from what it was, in fact, created for: from the sale of its products (rendering services);
- Profit not related to the main activity: from the lease or sublease of property, from the sale of assets owned by the company, from the sale of patents and licenses, from investing in a deposit or in the authorized capital of other organizations, etc.
The second part of the profit is the other financial result, which consists of non-operating and operating profit and is not related to the main activity.
If in a certain period the company did not receive a profit from the sale of its goods, then its total financial result will be equal to the rest. If the profit from the main activity was received, then you need to add it to other income and subtract other expenses from this amount.
The main legal acts regulating the accounting of financial results are:
- Chapter 25 of the Tax Code of the Russian Federation "Corporate Income Tax";
- PBU "Expenses of the organization" (No. 10/99);
- PBU "Income of the organization" (No. 9/99);
- PBU "Accounting statements of the enterprise" (No. 4/99).
These documents introduce the following definitions:
- The income of an organization is an increase in its economic benefits as a result of the receipt of assets and a decrease in its liabilities;
- The company's expenses are the decrease in economic benefits associated with the disposal of assets and the increase in liabilities;
- Accounting regulations define a list of criteria that an economic transaction must meet in order to be classified as income or expenses.
What criteria should an organization's spending meet?
According to current legislation costs have the following characteristics:
- The basis for payment is an agreement, legal requirements or business practices;
- Disposal has a monetary value;
- An enterprise can be absolutely sure that this or that operation will lead to a decrease in its economic benefits, in other words, it will cause a reduction in its assets.
If at least one of these three conditions is not met, then the payment cannot be reflected in the company's accounting records as an expense. It is posted as a receivable.
If the operation meets the named criteria, then it must necessarily be reflected in the relevant accounts of the financial statements. This fact does not depend on whether the organization plans to receive revenue from its main, non-operating or financial activities in the same period, as well as on the specific form in which the payment was made (in kind, in cash or in any other way).
There are situations in which the disposal of assets cannot be treated as an expense to the company. These are the cases when:
- The money was used to purchase fixed assets or intangible assets;
- A preliminary payment was made under the supply agreement;
- A contribution was made to the authorized capital of another organization for the purpose of further profit;
- The company has repaid a loan or loan it previously received;
- The firm makes payments resulting from a commission agreement or agency agreement.
Depreciation is also posted in the financial statements as an expense. The specific amount for each period is calculated based on the value of fixed assets (or intangible assets), their expected life, as well as the accounting policy that determines the method of calculating depreciation.
All expenses can be divided into two large groups in accordance with their economic nature:
- For the main activity - these are all the costs that accompany the production and sale of products, as well as depreciation;
- Others are those costs that are associated with the lease of property and participation in the activities of other companies, interest on loans and borrowings, fines and penalties for violation of the terms of contracts, etc.
Expenses are reflected in the period in which they were accrued, regardless of when exactly the payment is due and in what form (cash, in kind, etc.) it will be made.
What is business income?
Current legislation defines an organization's income as an increase in its economic benefits associated with the receipt of assets in cash, property or any other form, as well as with the repayment of its existing liabilities.
The following receipts cannot be classified as income:
- Advance payment for goods, works and services;
- VAT amounts received from counterparties;
- Funds received under agency or commission agreements in favor of third parties;
- advances and deposits;
- Pledges, if under the terms of the agreement they pass into the possession of the pledgee;
- Amounts used to repay loan agreements previously provided by the enterprise.
All the company's income can be conditionally divided into two large groups: proceeds from the main activity (revenue) and other income. The first in the financial statements are reflected in account 90 - "Sales". The latter are further divided into three categories:
- Operating - associated with the lease of property, as well as granting third parties the right to use intangible assets (patents, rights to inventions, etc.). The only exceptions are those organizations for which rental activity is considered the main one;
- Non-operating assets are assets donated to the organization or transferred to it free of charge, receipts to compensate for previously caused losses, fines and penalties received, exchange differences, profits of previous years revealed in the current period, etc.;
- Extraordinary - these are those receipts that arise as a result of the onset of extraordinary circumstances, for example, insurance claims.
According to the current legislation, both income and expenses of an enterprise are recognized in accordance with one of two methods:
- Cash - receipts and payments are taken into account in the period in which they were actually made, i.e. when the money left the current account or cash desk (or came there);
- Accrual method - income and expenses are recorded in the period in which they were actually recognized by the organization, i.e. when they were charged by her.
Increasing the size of income is one of the most important goals of any company. Their growth becomes the basis for increasing profits, which are spent on further expansion and improvement of production.
What is an organization's revenue?
Revenue is the amount of money that the company has received (or should receive) from its counterparties for goods sold, work performed and services performed. It can arise not only as a result of the sale of products, but also in other transactions, for example, barter, in this case it has not a monetary, but a property format.
According to current legislation and recommendations, revenue is recognized by the company and reflected in the relevant accounting accounts only if it meets five criteria:
- The right of the organization to receive funds in a certain amount is specified in the text of the contract with the counterparty, follows from some unwritten, but generally recognized norms, or has another fairly good reason;
- Receipts may have a specific monetary value;
- The organization has full confidence that this economic transaction will increase its benefits, i.e. there must be no uncertainty about the growth of its assets;
- The concluded transaction led to the fact that the ownership of the products ceased to belong to the seller and passed to the buyer;
- Economic transactions are accompanied by certain costs, which can be determined in terms of money.
If with respect to any receipts received by the organization both in the form of cash and in the form of tangible or intangible assets, at least one of the five essential criteria is not observed, then the amount cannot be reflected in the financial statements as revenue. In this case, it is posted as accounts payable.
An important feature of income accounting is that not all of them can be reflected as revenue. A vivid example of this is commission trading, when the seller receives a large amount, but retains only a small part of it, and transfers the rest to the commission agent.
Revenue can be determined by the moment of readiness of the goods (work, services), if it is possible to clearly determine this moment. Especially often it is used by organizations with a long cycle.
Most often, revenue is recognized in the reporting of an enterprise on an accrual basis, i.e. regardless of the moment of actual receipt of funds to the current account or to the cashier. However, small businesses have the right to use the cash method, when the link is made exactly at the time the money actually arrives.
There is a wide list of cases when revenue should be reflected in the financial statements in a special way:
- If a barter transaction has taken place;
- If the buyer has been granted a commercial loan;
- If the buyer received discounts or bonuses;
- If the item was subsequently returned.
According to the provisions of PBU No. 9/99, in the same period, an enterprise can use different ways determination of revenue for different operations. If its amount cannot be accurately calculated, then its value is recognized as the amount of the corresponding expenses, which will be reimbursed to the organization in the future.
How is the financial result formed?
Accounting for financial results allows you to reflect changes in the organization's equity capital arising from financial and economic activities over a certain period of time. The relevant data is collected on account 99 “Profit and Loss”. Its debit reflects a loss, its credit shows a profit.
All business transactions are reflected in this account on an accrual basis from the beginning of the reporting period. The account balance is one-sided, in other words, if the value is obtained by debit, then this means that in a particular period the company suffered losses, if by credit, then it earned a profit.
The size of the final financial result is influenced by the amount of income and expenses for both the main and other activities. The only difference is that the former are reflected in account 90 "Sales", and the latter - in account 91 "Other income and expenses". Both those and others at the end of the month (year, quarter) are debited to account 99.
The only exception to this rule is extraordinary income and expenses that do not go through the intermediate stage and immediately “fall” into account 99. Similarly, tax sanctions receivable by this organization and the results of income tax recalculation are immediately reflected there. Corresponding account - 68.
The algorithm of the accountant's actions in determining the financial results is as follows:
- First, he calculates the amount of revenue. This can be done in two ways: with or without VAT. I must say that the first method is used much more often, it involves the formation of two entries: D 62 - K 90.3 (for the cost of goods) and D 90.3 - K 68 (to reflect VAT);
- On the basis of invoices writes off the cost of shipped products. This can be done, for example, by such postings: D 90.2 - K 20 or D 90.2 - K 26;
- The resulting balance on accounts 90 and 91 is written off to account 99 and the amount of profit and loss that the company has incurred in the current period is determined.
At the end of the period, account 99 must be closed. Profit or loss received in the course of financial and economic activities is written off to account 84 "Retained earnings".
If by the end of a quarter or year a company has suffered losses, this means that it is spending its resources uneconomically, and the management decisions made by its management are incorrect. It is necessary to look for a way out of the current situation: change the managerial staff, reduce production, transform business processes, etc.
If retained earnings have formed on account 84, then this is a good sign: the organization can invest in its further development and in improving working conditions for its staff. It has the ability to pay dividends to its members. The presence of profit is an indicator of the effectiveness of the company.
What is a Profit and Loss Statement?
To analyze the financial results of the organization's activities, there is a "Profit and Loss Statement". This is a mandatory form of financial statements, which is called Form No. 2 and is submitted along with the balance sheet. It reflects all the results of the company's work on an accrual basis since the beginning of the year. The form of the report is approved by law: it is compiled vertically using the gross method (by turnover).
The report highlights the following important points:
- Income and expenses from core activities - that is, receipts and payments for those activities that are enshrined in the statutory documents of a legal entity. These are revenues and expenses associated with the production and sale of products (or the provision of services);
- Other income and expenses - receipts and payments not related to the main activity (operating, non-operating and extraordinary);
- Profit before tax – sales profit adjusted for other income and expenses;
- The amount of net profit - that is, the funds remaining at the disposal of the organization after paying taxes, fees and other obligatory payments. This is the basis for increasing the size of equity capital, investing in the development of production and paying dividends.
The information presented in Form 2 makes it possible to assess the change in the company's income and expenses, their dynamics in relation to previous periods, to understand how gross and net profit is formed and what factors influence them.
Based on the analysis of the form, conclusions can be drawn about:
- The value of profitability;
- The amount of revenue and the cost indicator;
- size different types arrived;
- Factors affecting these indicators;
- Opportunities to change the current situation for the better.
Ultimately, the report data, presented in the form of a table, allows interested users to conclude to what extent the organization's activities are effective and whether certain investments in its assets were appropriate.
How is the financial results analyzed?
Accurate and correct accounting of financial results is necessary so that all users receive undistorted information that allows them to make competent and balanced economic decisions. Analysis can help them with this.
Financial analysis is the process of studying the financial results and the state of the enterprise, the main purpose of which is to build forecasts of its further development and development of effective proposals to increase its market value.
The main stages of such an analysis are:
- Choice of coefficients;
There are many coefficients that, from one side or another, can describe the current state of affairs in the company. Of these, it is necessary to select several of the most significant, for example, solvency, profitability, financial stability, etc. Specific preferences depend on the industry specifics, the characteristics of the company.
It is necessary to calculate the values of the selected coefficients for a certain date (this will require the values of expenses, profits and revenues), as well as prepare a base for comparison, having learned the recommended or average industry indicators for a certain period.
- Express analysis;
This is a quick and visual assessment of the company's financial position. It involves three stages: preparatory, study of accounting data and making a “diagnosis”. In the process of work, the accountant (or analyst) studies the explanatory note to the balance sheet in order to understand the trends in the main indicators and the reasons for such changes. Based on the study, an analytical conclusion is made with varying degrees of detail.
- Establishing diagnosis";
Having studied the financial results and key ratios, the analyst must assess the economic condition of the company, point out its vulnerabilities and development prospects, and put forward proposals for directions for further development.
- Development of financial solutions.
Based on the diagnostics carried out and the problems identified, the responsible persons of the company should develop management solutions that allow them to deal with existing shortcomings, increase financial stability and profitability.
Competent reflection of the financial results of the company and their correct interpretation is the basis effective management organization. Only correct and undistorted information can become the basis for making the right decisions that will lead the company to development and prosperity.
The financial result of the economic activity of the enterprise is determined by the indicator of profit or loss, formed during the calendar (economic) year.
The financial result is the difference between the amounts of income and expenses of the enterprise. The excess of income over expenses means an increase in the property of the enterprise - profit, and the excess of expenses over income - a loss. The financial result received by the enterprise for the reporting year in the form of profit or loss, respectively, leads to an increase or decrease in the equity capital of the enterprise.
The accounting regulations "Income of the organization" (PBU 9/99) and "Expenses of the organization" (PBU 10/99), approved by Orders of the Ministry of Finance of Russia dated 06.05.1999 No. 32n and No. 33n, respectively (as amended and supplemented), recognize an increase in , and expenses - a decrease in economic benefits as a result of the receipt or disposal of assets, as well as the repayment or incurrence of liabilities, leading to corresponding changes in the capital of the enterprise. The said regulations provide a grouping of income and expenses for their reflection in accounting and reporting, their definition and the procedure for recognition in accounting.
According to PBU 10/99 (clause 16), expenses are recognized in accounting under the following conditions:
The expense is made in accordance with a specific contract, the requirement of legislative and regulatory acts, business customs;
The amount of the expense can be determined;
There is confidence that as a result of a particular transaction there will be a decrease in the economic benefits of the organization. There is certainty that a particular transaction will reduce the entity's economic benefits when the entity has transferred the asset, or there is no uncertainty about the transfer of the asset.
If at least one of the named conditions is not fulfilled in relation to any expenses incurred by the organization, then the organization's accounting records recognize receivables.
Depreciation is recognized as an expense based on the depreciation expense based on the value of the depreciable assets, their useful lives and the entity's depreciation methods.
Expenses are subject to recognition in accounting, regardless of the intention to receive revenue, operating or other income and from the form of the expenditure (monetary, in-kind and other).
Expenses are recognized in the reporting period in which they occurred, regardless of the time of actual payment of funds and other form of implementation (assuming the temporal certainty of the facts of economic activity).
Expenses are recognized in the income statement:
Taking into account the relationship between expenses incurred and receipts (correspondence of income and expenses);
By their reasonable distribution between the reporting periods, when the expenses cause the receipt of income during several reporting periods and when the relationship between income and expenses cannot be clearly determined or is determined indirectly;
For expenses recognized in the reporting period, when it becomes certain that they will not receive economic benefits (income) or receive assets;
Regardless of how they are taken for the purposes of calculating the taxable base;
When liabilities arise that are not contingent on the recognition of related assets.
According to PBU 9/99, expenses from ordinary activities are revenue from the sale of products and goods, income related to the performance of work, the provision of services (hereinafter referred to as revenue).
Revenue is recognized in accounting under the following conditions (clause 12 of PBU 9/99):
a) the entity has a right to receive the proceeds arising from a specific contract or otherwise appropriately evidenced;
b) the amount of proceeds can be determined;
c) there is confidence that as a result of a particular transaction there will be an increase in the economic benefits of the organization. The certainty that as a result of a particular transaction there will be an increase in the economic benefits of the organization, there is a case when the organization received an asset in payment or there is no uncertainty regarding the receipt of the asset;
d) the right of ownership (possession, use and disposal) of the product (goods) has passed from the organization to the buyer or the work has been accepted by the customer (the service has been rendered);
e) the costs to be incurred or to be incurred in connection with this transaction can be determined.
If at least one of the named conditions is not fulfilled in relation to the cash and other assets received by the organization in payment, then the organization's accounting records are recognized as accounts payable, and not revenue.
The organization may recognize in accounting revenue from the performance of work, the provision of services, the sale of products with a long production cycle as the work, service, product is ready or upon completion of the work, the provision of services, the manufacture of products as a whole.
The proceeds from the performance of a specific work, the provision of a specific service, the sale of a specific product are recognized in accounting as soon as they are ready, if it is possible to determine the readiness of the work, service, product.
In relation to different in nature and conditions for the performance of work, the provision of services, the manufacture of products, an organization can simultaneously apply in one reporting period different methods of recognizing revenue, provided for in paragraph 13 of PBU 9/99.
If the amount of proceeds from the sale of products, the performance of work, the provision of services cannot be determined, then it is accepted for accounting in the amount of the expenses recognized in accounting for the manufacture of these products, the performance of this work, the provision of this service, which will subsequently be reimbursed to the organization.
The financial result of the economic activity of the enterprise is formed from two of its components, the main of which is the result obtained from the sale of products, goods, works and services, as well as from business operations that are the subject of the enterprise's activity, such as the rental of fixed assets for a fee, the transfer in the paid use of intellectual property and investment in the authorized capital of other enterprises.
The second part in the form of income and expenses not directly related to the formation of the main sales financial result (financial result from sales) forms the other financial result, which includes operating and non-operating income and expenses. If during the reporting period the company received a profit from the sale of products, goods, works, services and other operations that are the subject of its activity, then its entire financial result will be equal to the profit from sales plus other income minus other expenses. If an organization incurs a loss on sales, then its total financial result will be equal to the sum of the loss on sales plus other expenses minus other income.
The total financial result obtained in this way is adjusted for the amount of losses, expenses and income due to extraordinary circumstances of the enterprise's economic activity.
The implementation financial result is determined at the end of each reporting period. If the financial result is profit, then it is reflected in the credit of account 99 "Profit and Loss" in correspondence with the debit of account 90 "Sales". If the result of the enterprise's activity is a loss, then it is reflected in the debit of account 99 "Profit and Loss" in correspondence with the credit of account 90 "Sales".
Other income and expenses included in the overall financial result of the organization are reflected in accounting separately from the financial result from sales on account 91 “Other income and expenses” by “expanded” reflection of individual items of income and expenses during the reporting period.
In the financial statements of profit and loss, income may be shown net of the corresponding expenses related to these incomes, in cases where it is provided for or not prohibited by accounting rules or if certain items of income and related similar items of expenses are not significant for characterizing financial position of the organization.
Other income is reflected in the credit of account 91 “Other income and expenses” in correspondence with the debit of accounts for cash, settlements, inventory and other relevant accounts.
Analytical accounting on account 91 “Other income and expenses” is kept for each type of other income and expenses. At the same time, the construction analytical accounting for other income and expenses relating to the same financial or business transaction, should provide the possibility of identifying the financial result for each transaction.
It should be borne in mind that entries on accounts 90 and 91 are made accumulatively from the beginning of the reporting year so as to ensure the formation of the necessary information for compiling a profit and loss statement (form No. 2).
The balanced result of account 91 “Other income and expenses” in the form of profit and loss is written off monthly, like the balance of account 90 “Sales”, to the final accumulative account of financial results 99 “Profit and loss”: the balance in the form of profit - to the credit of account 99 s the debit of account 91, the balance in the form of losses - to the debit of account 99 from the credit of account 91.
Extraordinary income and expenses are reflected directly on account 91 “Other income and expenses”: income - on credit, expenses - on debit in correspondence with the corresponding accounts for cash, inventory, settlements, etc.
On account 99, at the end of the first quarter, the interim financial result for the first quarter is revealed, at the end of the second quarter - for the first half of the year, at the end of the third quarter - for 9 months of the year and at the end of the fourth quarter - the final financial result for the entire reporting period.
The information structure of account 99 “Profit and Loss” for the formation of the final financial result should ensure the receipt of:
1) systemic reliable information on accounting profit - an indicator necessary to determine the taxable base for income tax by appropriate tax adjustment of accounting profit;
2) information on the formation of the final indicator of net retained earnings, which is at the disposal of the founders (participants) of the enterprise for distribution at the end of the financial year and transferred in December of the reporting year to account 84 “Retained earnings (uncovered loss)”.
In the system of accounts reflecting the financial results of the enterprise for the reporting year, all the necessary information about the indicators contained in the financial statements on profit and loss (form No. 2) should be generated.
Analytical data on all accounts of this group are involved as turnovers and balances in the formation of indicators of the income statement for the reporting year.
At the end of the calendar year, from the amount of actual accounting profit received by the enterprise for the reporting year, the final calculation of the amount of income tax due to the budget at the established tax rate is made as a matter of priority. At the same time, the amount of taxable profit differs from the accounting profit of the enterprise by the amount of those positive and negative adjustments that are established by the Tax Code of the Russian Federation on income taxation.
A complete list of all adjustments to reported income to the level of taxable income is given in the form of a certificate attached to tax return according to the calculation of tax on actual profits.
Due to the fact that the profit indicator in the current quarterly statements does not represent the final financial result, current income tax payments calculated quarterly, as well as intra-quarterly payments, are of an advance nature. This current (essentially, advance) distribution of profits is now reflected during the year in the debit of account 99 “Profits and losses” in correspondence with the credit of account 68 “Calculations on taxes and fees”.
The amount remaining after the deduction of the tax accrued from it from the profit is called net profit, which does not comply with international accounting practice. In foreign literature, this term has a different meaning, it means the balanced result of comparing all the income and expenses of the enterprise, i.e. the entire financial result.
As Russian accounting practice converges with international standards accounting and reporting, the concept of net profit as remaining at the disposal of the enterprise has practically ceased to exist. Its place was taken by a new concept - "retained earnings of the reporting year." This part of the profit is now disposed of by the enterprise after the completion of the process of its formation. From the net profit, the enterprise (both before and now) reimburses payments under the sanctions of the relevant authorities for non-compliance with the rules of taxation and payment of similar mandatory payments to social state non-budgetary funds (pension fund, social and medical insurance funds).
These expenses are reflected in the accounting records as they are accrued by the entry:
Debit account 99 "Profit and loss"
Credit of account 68 "Calculations on taxes and fees",
Credit of account 69 "Calculations for social insurance and security."
From the accounting profit, the enterprise in a priority manner reimburses the costs of paying current payments on income tax, current payments on taxes to the local budget paid from net profit, as well as fines covered by net profit, penalties for non-compliance with taxation rules and violation of the procedure for settlements with state off-budget social funds, payments to which are equated to tax.
The amount of accounting profit received after deducting the listed operating expenses is retained, i.e. net profit that comes to the disposal of the founders of the enterprise for its use after the approval of the results of production and financial activities for the past reporting year. In accordance with clause 83 of the Regulation on Accounting and Accounting in the Russian Federation, the financial result of the reporting period is reflected in the balance sheet as retained earnings (uncovered loss), i.e. the final financial result revealed for the reporting period, minus taxes due from profits established in accordance with the legislation of the Russian Federation and other similar obligatory payments, including sanctions for non-compliance with taxation rules.
In the current financial statements, the financial result is defined as the balance of account 99 “Profit and Loss”. In the annual financial statements, this indicator is reflected after the reformation of the balance sheet in December according to the balance of account 84 “Retained earnings (uncovered loss)”, subaccount 1 “Retained earnings (loss) of the reporting year”, while the corresponding balance on account 99 is in the form profit or loss is transferred to account 84, sub-account 1 "Retained earnings (loss) of the reporting year". Retained earnings are credited to sub-account 84-1, and uncovered losses are debited to the same sub-account.