With the development of the banking system, new settlement systems began to appear . One of them is bill credit. This security is used not only as an investment tool, generating income, but also as a means of payment. This article will be talking specifically about the second function of the bill.
Essence
Any organization inevitably faces the need to obtain borrowed funds for temporary use. With the development of credit relations, banks began to offer new types of loans. Promissory notes - the product on the market is not new, but not sufficiently developed by the participants. The transaction is based on a standard bank loan. But the money is not credited to the bank account, but is provided in the form of the Central Bank.
The company is applying for a bill of credit. The transaction procedure is standard: the organization is asked for constituent documents and financial statements. After making a positive decision, a bill of credit agreement is concluded. It almost completely copies the contents of the standard contract, except for one clause. If the purpose of attracting a regular loan is to pay for raw materials, equipment, pay off wage arrears, then in the case of a bill of exchange loans, the purpose of the transaction is to acquire a bank's debt security. A guarantee agreement, as an additional guarantee, may not be concluded. After signing the papers for the organization open a loan account.
Process
During the use of the loan, the bank transfers the funds to the borrower's account. This amount is immediately debited to the purchase of a bill if it is stated in the contract that the bank is entitled to direct debiting. Or the payer himself must provide a payment confirming the transfer of money. That is, an account is opened only to comply with the requirements of the Central Bank. Using funds for other purposes does not work. Postings are made by bank employees. The first holder shall indicate the borrower on the bill of exchange.
Under one contract, several securities may be issued. The total amount for all bills must be equal to the volume of the loan. Exceptions are cases where the contract provides for the collection of additional commissions.
Using
Typically, a bill is purchased for settlements with suppliers. It is enough for the borrower to put the endorsement on the security in order to pay off the debt to his counterparty. At the bill appears a new owner. The security goes into circulation. But this borrower should not be worried. Despite the specifics of the transaction, bill loans are repaid in cash. The deadline for settlements is specified in the contract. Usually it does not exceed 6 months.
The maturity of the bill may exceed the loan maturity by a maximum of two weeks. This circumstance must be taken into account in the calculations. If the bill is presented ahead of schedule for payment, it will be repaid not at face value, but at a discount. This will also affect the price at which the settlement will be made between the borrower and the lender.
Example 1
The borrower received a bill of par value of 1 million rubles. The amount of his obligations to the bank is 4.7 million rubles. The debt maturity date is March 15, 16. The final settlement date between the borrower and the creditor is scheduled for September 28, 2015. At the time of contacting the bank, the creditor learns that the institution repaid the bill with a discount of 11% on September 28, 15. The presenter received not 1 million rubles, but 890 thousand rubles. The borrower’s obligations are reduced by the same amount: 4.7 - 0.89 = 3.81 million rubles.
Similar calculations are carried out along the entire chain of owners. The closer the settlement period, the larger amounts will be taken into account.
Conditions
Bill loans carry three types of risks: borrowed, interest and the threat of a decrease in liquidity. To reduce them, financial institutions have requirements for customers:
- provide collateral in the form of government loan bonds (other liquid securities), inventories, real estate, equipment;
- conduct activities at the time of signing the agreement for more than a year;
- have regular cash flow in accounts.
When these minimum requirements are met, promissory notes are issued by banks for up to one year at 6-10%.
Benefits
- A bill of credit is cheaper than a regular loan. Although the procedures for processing transactions are identical, the rate on such loans usually does not exceed 10%.
- The loan allows you to make payments even if there are unpaid requirements for the account.
- The fact of repayment of the debt is made out in a transfer inscription on the document. This significantly reduces workflow.
disadvantages
- Decrease in the amount accepted for offset due to repayment of the bill at a discount.
- The need to coordinate with the supplier the possibility of paying off the debt with a bill of exchange and the terms of the transaction, i.e. with what margin he will accept the Central Bank for offset.
Accounting for bill loans
Debt securities are accepted for accounting by the supplier as part of financial investments (accounts 58-2). Depending on the period for which the promissory note was issued, the borrower in the balance sheet reflects the capitalization of the Central Bank on DT accounts 66-2 (short-term) or 67-2 (long-term bank loans ). Amounts allocated for payment of debts are debited in DT 91-2 “Other expenses”.
Example 2
The company received a short-term bill loan from the bank in the amount of 500 thousand rubles. for a period of six months at 5.5% per annum. Interest is paid in equal parts, together with the repayment of the main part of the debt: 500 * 0.055 = 13.75 thousand rubles. This amount is reflected in accounting by posting DT91-2 CT 66-2.
Taxation
In Art. 167 of the Tax Code it is said that when transferring a bill to repay a supplier’s debt, VAT should be calculated only if the Central Bank is paid or transferred by the taxpayer on an endorsement basis. The receipt of a bill of exchange by a third party is considered to be a realization, since the buyer's obligation to the organization terminates without reservation.
Example 3
A buyer of an LLC paid for goods with a ZAO bill of exchange purchased at a branch of Sberbank. The seller shipped goods in the amount of 18 thousand rubles. (VAT 10%). The buyer handed the bill for the same amount. From a legal point of view, LLC fulfilled the obligation to pay for goods. CJSC cannot reflect this security on accounts receivable accounts.
Sberbank is not a debtor of the seller. In this case, the accounting bill of credit should be reflected on account 58 in the amount of the cost of its acquisition, that is, the cost of the shipped products. In the seller's control unit, the following transactions are made:
DT62 KT90-1 “Revenue” - 18 thousand rubles. - reflected the sale of goods to LLC.
DT90-3 “VAT” KT68-3 - 1,636 thousand rubles. - accrued VAT.
DT58-2 “Debt securities” KT76-3 “Settlements for other income” - 18 thousand rubles. - accepted into account a bill.
DT76-3 CT 62 - 18 thousand rubles. - the bill paid for the shipped products.
Features
Bill repayment of the loan stipulates that VAT for purchased goods is calculated based on the book value of the Central Bank. The balance sheet also takes into account the cost of purchasing a bill. The actual amount of expenses may not coincide with the nominal value. If it is more than the balance sheet, then VAT is deducted based on the seller’s accounts.
Bill movements
There are two main patterns of movement of bills. Let's consider them in more detail.
After the buyer and the supplier agree on the transaction amount and payment terms, the counterparties open accounts in one bank located in the same city and enter into a tripartite agreement. The buyer acquires a short-term bill in the amount of the transaction, places it on a deposit and blocks it. Upon completion of the transaction, the deposit is withdrawn, and the funds are transferred to the supplier’s account. If violations were discovered during the transaction, then after unlocking the bill remains with the buyer. A security cannot be withdrawn from collateral without the agreement of both parties. Thus, the buyer is insured against debiting funds before the due date, and the supplier is insured against non-payment of the transaction after its completion.
Change the conditions of the previous scheme. Counterparties open accounts in the branches of one bank in different cities. The buyer draws up long-term bills for the amount of the transaction, notifies the supplier in writing and gives permission to transfer part of the securities received to the securities account. The supplier’s bank contacts the buyer's credit institution to confirm the blocking of bills. Upon completion of the transaction, the security is unblocked and transferred to the supplier’s account.