The heads of many enterprises, striving to improve the conditions of work and leisure for workers, acquire property that is not intended for use in the production process or to satisfy the organization's management needs. Such objects, for example, include kettles, microwave ovens, refrigerators, exercise machines, medical equipment, air conditioners, etc. Despite the fact that this property belongs to the category of non-produced assets, it must be accounted for. In our article, we will talk about the nuances of capitalization of such objects, tax features and other important points.
Relevance of the issue
Difficulties, taking into account the fixed assets of the enterprise, cause some problems in calculating the base for property tax. How to use the opportunity of recognition of expenses for the acquisition of values? Can non-produced assets be subject to VAT? What should an accountant do so that the company does not have problems with the tax authorities? There are a lot of questions. Let's get it right.
What are “non-produced assets” in accounting?
Today, there are two approaches to the reflection of the objects in question. On the one hand, the Provision on reporting does not divide property. On the other hand, on the basis of paragraph 4 of PBU 6/01, one of the main conditions for recognizing an object as the main means is its use in the production process, when performing work or providing services or for the management needs of the company. Another important criterion is the ability of the property to make a profit.
In the first case, investments in non-produced assets, including acquisition costs, bringing them to a condition suitable for use, are reflected in the account. 08 and debited to the account. 01.
In the second case, experts believe that, since the objects do not have a direct relationship to production, it means they cannot bring profit. It follows that in accordance with paragraph 12 of PBU 10/99, the costs of non-produced assets should be accounted for in subaccount 91.2 as non-operating expenses.
Reflection of accounting regulations
Let us first consider the features of documentation in the framework of the first approach.
In general, the cost of fixed assets is paid off by depreciation. But since non-produced assets are not directly related to production, deductions for depreciation should be charged to other expenses, reflected in subaccounts. 91.2 “Other expenses and income”.
The useful life of the facility for depreciation is set by the company when capitalizing property, in accordance with the requirements of the Classifier OS. Since we are talking about the main means of non-productive use, the amount of VAT is not deductible, but relates to other expenses. In this case, the accountant generates the following entries:
- Dt. 91 subaccounts 91.2 CT 19 - the amount of VAT is included in other expenses.
- Dt. 91 subaccounts 91.2 Kt 02 - depreciation rate is included in other expenses.
This option, as practice shows, is quite suitable for the inspectors of the Inspectorate of the Federal Tax Service.
According to some experts, on the basis of sub. 1 p. 1 Article 264 of the Tax Code, such a tax may well be included in the composition of the costs taken into account by the business entity when taxing profits.
Ministry of Finance Explanations
The Ministry of Finance letter No. 03-06-01-04 / 209 of April 21, 2005 confirms the possibility of accounting for non-produced assets as part of fixed assets. The Office proposes to use the norms of labor law to justify the inclusion of information on the legal acts on the account. 01.
The Ministry of Finance cites its explanations using an example. The letter addresses the issue of the possibility of assigning a microwave oven and a refrigerator to fixed assets. These objects, in fact, correspond to the characteristics of fixed assets, since their service life exceeds 12 months. The decisive moment in deciding on the rules for accounting for this property is the presence in the collective agreement of a clause on the working conditions of personnel. Objects that are acquired in order to implement the provisions of this agreement are considered OS. The Finance Ministry made this conclusion on the basis of Art. 163 shopping mall. The tenant is obliged to create working conditions for the personnel that meet the requirements for labor protection and safety.
In addition, the agency notes that if the collective agreement provides for not only the conditions for food for employees, but also the provision, for example, of a microwave or refrigerator, then these facilities will be recognized as fixed assets.
Other case studies
Of course, in addition to a microwave oven and a refrigerator, other non-produced assets can be used at the enterprise. The possibility of including them in the OS depends mainly on the leadership’s ability to justify their “production and management” appointment.
In judicial practice, there are cases when the costs of depreciation of curtains with lambrequins, a sofa, a table, an armchair, and curtains are recognized as administrative expenses. Taxpayers justify the decision to include them in the OS so that these items directly participated in the organization. And the work of the company, in turn, consisted of information services, consulting on commercial issues, conducting market research, analyzing the effectiveness of the oil complex.
Accounting as part of non-operating expenses
If you use the second approach to the reflection of the legal regulations, then the accountant makes the following entries:
- Dt. 91 subaccounts 91.2 Ct 60 - reflects the cost of acquiring non-productive property.
- Dt. 19 Ct. 60 - input VAT included.
- Dt. 60 ctch 51 - payment of legal acts.
VAT reflection options
Methods of tax accounting depend on the occurrence of the object of taxation. As explained by the Federal Tax Service in its letter No. 03-1-08 / 204/26-088 of 2003, if the transfer of non-productive property will not be connected with the formation of the base, then VAT should be taken into account in subaccounts. 91.2 "Other costs". The result is a record:
Dt. 91 subaccounts 91.2 Ct 19 - write-off of input VAT.
If the resources intended for the company's own needs are transferred to its structural divisions, then the situation is twofold. So, on the one hand, there will be a taxable tax turnover:
Dt. 91 subaccounts 91.2 Ct 68 - the amount of VAT has been accrued when transferring property (services, works) for own needs.
And on the other hand, the payer has the right to present the amount of tax deductible:
Dt. 68 ctch 19 - the amount of VAT accepted for deduction.
The Ministry of Finance holds the same position in tax accounting in letter No. 03-03-04 / 2/9.
A Few Words About Tax Accounting
Above, we partially dealt with the reflection of tax information. However, let us turn to the rules of the Tax Code governing accounting.
The assignment of an object to a particular group affects 3 taxes: VAT, income taxes and property. Obviously, the occurrence of obligations on the last deduction directly depends on the procedure for recognition of an object in accounting. But what happens to income tax?
According to paragraph 49 of Art. 270 Tax Code, expenses that do not meet the criteria of paragraph 1 of Art. 252 of the Tax Code, cannot be taken into account. They are not taken into account, for example, if they are not economically justified.
At the same time, depreciable assets and fixed assets are understood as objects used as means of labor for the production and sale of products (provision of services, performance of work) or for the management of an enterprise. Consequently, in tax accounting the recognition of an asset will also depend on the justification of the need for its use in financial and economic activities. Here you can refer to the norms of the Labor Code, providing confirmation of the feasibility of costs aimed at creating appropriate working conditions for personnel. In addition, arguments about managerial or representation costs may be used.
It is worth saying that when confirming the economic feasibility of expenses on non-produced assets by the need to create appropriate working conditions, the enterprise will not increase "salary" taxes. Sad but true.
Nonproduced Assets in Budget Accounting
There are several other types of property that belong to the category we are considering. For example, in a budget institution, an unproductive asset is land or another natural resource.
It can be taken to the balance in case of purchase, donation, transfer to use or operational management, as well as in case of detection of unaccounted objects during the inventory.
When the NPA is donated to the state authority, municipal or state institution, an act is drawn up. An inventory card is attached to it. In case of interdepartmental transfer, an order (decision) of a higher authority or founder is drawn up, an act and an invoice are formed. In case of withdrawal of the legal acts, the primary documents for cancellation are the contract and the act of acceptance and transfer.