The assets and liabilities of an entity should be adjusted for accounting estimates. In receivables, such an indicator is the allowance for doubtful debts - in the balance sheet the amount of subsidiaries is shown net of the accumulated savings. This avoids overstating assets. Since 2011, the formation of a reserve for doubtful debts is the responsibility of the organization (according to paragraph 70 of the PBU of the Russian Federation No. 34n). Although in the Tax Code of the Russian Federation this operation is registered as the right of companies. But when you consider that this amount should be included in tax expenses, many enterprises enjoy the right to create reserves. You will learn about how to correctly implement this, what transactions should be generated, and how this operation is displayed in “Accounting 1C” from this article.
Reserves in BU
"Accounting" and "tax" accumulated amounts for doubtful and bad debts are very different, therefore, they need to be formed separately for different purposes. The accounting procedure is established by the enterprise on its own. The accounting procedure of the Russian Federation indicates that the amount of funds should be calculated using one of the following methods:
- separately for each debt, the enterprise determines the amount of subsidiaries, which will not be returned and includes it in the reserve;
- based on information from past periods: the proportion of the unpaid amount for the previous few years is calculated;
- for each amount in proportion to the delay. A similar method is used in NU.
Doubtful are not:
- DZ on the obligations of suppliers who received an advance payment, as well as on short-delivered goods within the time specified in the contract.
- Debt on fines for failure to comply with the terms of the contract.
- Debt under loan and assignment agreements.
Selection confirmation
The selected option must be approved in the accounting policies of the enterprise. If management decides to use the expert assessment method, the criteria for classifying debt to reserves should be clearly stated. In the proportional method, you need to set the percentage values. When choosing a reserve formation option, it is important to consider the purpose of its creation. The higher this amount, the greater the net asset ratio. For "beautiful" reporting, it should be minimal. So the legal requirements will be met, and investors will not suffer. In the BU, the creation of a provision for doubtful debts is recorded in the account. 63, analytical data are recorded separately for each debtor. Deductions to the reserve are shown in “Other expenses” (accounts 91-2).
Example of reserve formation in the control unit
LLC “X” shipped LLC “U” goods for 120 tons. (VAT 18, 24 t rub.) 08/12/2013. A deferral of 10 calendar days has been violated. The accounting policy of LLC “X” provides for the assignment of amounts to uncollectible in full. Management decided to include 100% of the debt in the allowance for doubtful debts. Postings in this case will look like this:
date | DT | KR | Amount, thousand rubles | Operation |
08/31/13 | 91-2 | 63 / LLC “U” | 120 | Formed reserve |
Adjustment. 10/15/13 the buyer decided to pay part of the debt in the amount of 50 tons. Rub. This operation should be reflected in the control unit according to the account. 63 “Allowance for doubtful debts”. Postings:
date | DT | KR | Amount, thousand rubles | Operation |
10/31/13 | 63 / LLC “U” | 91-1 | fifty | Reserve reduction |
At the end of the year, DZ in the balance sheet should be reduced by the amount of doubtful debts: 120 - 50 = 70 tons of rubles.
2. Suppose in June 2014 LLC U was liquidated. Since previously the amount of their debt was included in the fund, then it will be debited from the same account 63 “Reserve for doubtful debts”. Postings:
date | DT | KR | Amount, thousand rubles | Operation |
06/31/14 | 63 / LLC “U” | 62 | 70 | Written off a hopeless DZ |
3. According to PBU RF №34, if before the end of the period following the creation of the reserve, its value has not been fully used up, then the balance should be included in the financial results of the current period. In the framework of this example, if the balance is not written off before 12/31/14, then it should be charged to other expenses (. 91-1). But according to the same provision, at the end of the year a reserve for doubtful debts should be created again. Postings are similar to those discussed above. Due to the ambiguity of the requirements, experts recommend not to write off the debt completely, but to adjust it in one direction or another.
Creating a reserve for doubtful debts in NU
This calculation procedure is clearly stated in Article 266 of the Tax Code. It states that the taxpayer can create / make deductions for any debt. The exception is interest on loans. In the same article, it is said that a reserve for doubtful debts can be created only by the results of an inventory of subsidiaries at the end of the reporting period. This operation should be carried out no earlier than the obligation to pay taxes has arisen. The accounting policy must reflect the fact of the creation or refusal to form a reserve. This must be done before the start of the year. It is not allowed to make any changes in the current period.
The purpose of the inventory in this case is to determine the timing of delay in payment of the debt. Based on the calculations, the company determines the amount of delay, and then classifies it as hopeless (if the debtor was liquidated) or doubtful. In the first case, the debt should be written off at the expense of the created reserve, and in the second - included in it. Fund funds can only be used to cover costs from bad debts.
These deductions relate to non-operating expenses, decreasing the basis for calculating corporate income tax (NPP), that is, only payers of NPP can carry out such operations. The amount of deductions is determined for each debt:
- <90 days of delay - 100%;
- 45-90 days - 50%;
- > 45 days - 0%.
Moreover, if the amount of the debt is fully included in the reserve, then there should not be more than 10% of the proceeds of the current period.
Calculation Example
LLC X established reserves in 2014. Payments on NPP are paid once a quarter, accordingly, the reserve is adjusted at the same time.
1. An inventory of the allowance for doubtful debts on March 31, 2014 showed that four debtors had overdue DZ. The company's revenue is 3 million rubles. The reserve amount is calculated as follows:
Client | Delay, days | Amount of debt, thousand rubles | The amount of deductions, thousand rubles |
1 | 105 | 200 | 200 (200 * 100%) |
2 | 85 | 100 | 50 (100 * 50%) |
3 | fifty | 300 | 150 (300 * 50%) |
4 | 10 | 400 | 0 (400 * 0%) |
The total amount of the reserve: 200 + 50 + 150 = 400 thousand rubles.
Tax restrictions: 3000 * 0.1 = 300 thousand rubles.
The amount of the formed reserve: 300 thousand rubles.
2. The adjustment. In the second quarter, the third debtor paid the supplier, and the first was liquidated. No new doubtful amounts appeared, therefore these operations should be displayed on the balance accounts.
In NU, hopeless DZ is written off in full. If it exceeds the amount accumulated in the fund, it should be attributed to non-operating expenses. So, the calculation of the reserve for doubtful debts in the second quarter should look like this:
Client | Delay, days | Amount of debt, thousand rubles | The amount of deductions, thousand rubles |
2 | 175 | 100 | 100 (100 * 100%) |
4 | 100 | 400 | 400 (400 * 100%) |
Total reserve: 100 + 400 = 500 thousand rubles.
Tax restrictions: 6000 * 0.1 = 600 thousand rubles.
Amount of deductions: 500 t. Rub.
From the first quarter, 100 thousand rubles remained. unused reserve. Accordingly, it is adjusted upward, and 400 thousand should be attributed to non-operating expenses.
Debt transfer
According to Art. 266 of the Tax Code, the completely unwritten amount of doubtful debt in the current period can be carried over to the next. The newly created reserve must be adjusted by the amount of the balance: if it is less, the difference applies to non-operating income; if more - to expenses.
According to the results of the year, the adjustment is as follows. If next year a decision is made to form a reserve, the amount is transferred. If not, the balance should be included in non-operating income.
Typical accounting entries
DT | KR | Business operation |
91-2 sub-account “other costs” | 63 | Creating a reserve. |
63 | 60, 62, 76 | Debts written off previously recognized as doubtful are written off (at the end of the limitation period, by court decision, after liquidation, by the bankruptcy of the debtor). The amount indicated in this transaction must be duplicated on the off-balance sheet account. 007 and stay there for the next 5 years. If the financial situation of the debtor improves, it may be possible to write off the debt. |
76 | 68 | Shows VAT on deducted DZ. |
63 | 91-1 | The unused amounts of reserves to the profit of the current period, which follows the period of creation, are combined. |
51/63 | 62/91 | Full repayment of debt. |
91 | 62 | Assignment of the amount of the excess balance to income. If the reserve was not created, then bad and other debts should be included in the expenses of the organization. |
51 | 91 | The debtor repays the debt in whole or in part. The same amount must be displayed on the loan of the off-balance account 007. |
The difference between OU and BU
As mentioned above, taxpayers who decide to create reserves of OU and BU will inevitably encounter the difference in data. This is due to the following reasons:
1. The amount for the reserve for doubtful debts in the BU includes only the amount for the unpaid realized GP. Debt for the sold OS and other property is not included.
2. On accounts of BU, the amount of doubtful debt is displayed by decision of the management. In the Tax Code, with an delay of more than 90 days, the amount in the reserve is taken into account in full.
3. In the BU, the unused balance should be attributed to the financial results of the organization. In the Tax Code, it can be transferred to the next period (year).
The company must create a calculation register and keep records of reserves for doubtful debts in it. The results of the inventory of the reporting period must be confirmed in the relevant act (No. INV-17) with the following chapters:
- the date of the debt (3 groups from the tax code);
- percentage of deductions (0 or 100).
The accountant must monitor the transition of doubtful debts to bad, and transfer the balance of the amount or include it in the financial results.
Display of operations in "Accounting 1C"
Typical configuration settings allow you to track the amount of overdue debt separately for each client. But for this you need to install checkboxes. In the "Accounting Settings Settings" window, on the "Settlements with Counterparties" tab, specify the period after which the delay period begins. But this rule will be valid if the checkbox “Create reserves in the NU and / or the BU” is set in the accounting policy on the tab “Accounts with counterparties”. If both checkboxes are activated, then inevitably there will be a difference in numbers. The reasons for its appearance have already been indicated above.
If the debt period is more than 45 days, then during the closing of the month a reserve will be charged in the amount of 50% of the total amount under DT 62 and DT 76.06. If the period is more than 90 days, then - 100%. For delay in foreign currency, the amount of the reserve will have to be formed manually. You can check the correctness of the calculations in the database in the homonymous reference.
Next, we consider the typical accounting entries that are formed in the database.
- If the client used the old configuration in which analytics was not carried out for each shipment document, then after updating the configuration, you need to create a new accounting policy, distribute the total amount of the reserve according to the shipment documents using "Operation (control and control unit)."
- Dt 91.02 Ct 63 - the posting is created automatically on the last day of the month.
- The reserve is formed for each client. The program analyzes balances according to DT 62 and 76.06. If the client has an advance payment under one agreement, and in another debt over 45 days, the reserve will still be accrued. And if this amount is different from OU, then the difference will be automatically taken into account.
- Dt 63 Kt 91.01 - posting the restoration of the reserve, which is generated automatically at the end of the month. The amount is reduced if the customer paid for the goods.
- Dt 63 Kt 91.01; - transfer of debt.
- Dt 63 Kt 62 (76.06) - write-off of DZ. This posting is generated by the document “Debt adjustment” with the type “Write-off”. Indicate the “Bad Debt Reserve” account 63 and indicate the subconto.
If the company keeps records in NU and BU, it is necessary to separately change the amount. To do this, in the document "Debt adjustment" you need to activate the checkbox "Manual adjustment". Then, in the posting Dt 63 Kt 62.01, indicate the amount of the reserve, and transfer the balance to permanent and temporary differences. The program correctly calculates the NPP, if the following condition is met: BU = NU + PR + BP.
The rest of the debt not covered by the reserve in NU must be accounted for. 91.02 “Write-off of DZ (KZ)". That is, a negative permanent and temporary difference arises on debit and credit.
The amount of debt written off, over which more than three years have already passed, should be added to the off-balance account 007 for another 5 years. But if during this time the client returned at least part of the money, then this operation is reflected in the following transaction: Dt 50 (51) Kt 91.02. If the money has not been returned, then the account is closed by "Operation BU (OU)" for the entire amount.
Summary
The company at the end of the reporting period should create reserves for doubtful debts, that is, for those amounts whose repayment is unlikely. The methods for calculating such amounts in NU and BU are different. If the management decides to display the amounts not only in the reporting documents, but also in the accounting policy, then adjustments will have to be made in the database manually. It is important to understand the purpose of this reserve. The higher the amount of doubtful debts, the greater the net asset ratio. For the "beautiful" statements that are submitted to the bank, this is not always good.