Accounting for accounts payable has many nuances. So, the amount of debt for which the statute of limitations has expired is accounted for as financial results and relates to non-operating income.
In this regard, it is necessary to write off accounts payable in a timely manner, since the tax authorities may consider the failure to perform this operation on time to be the concealment or non-accounting of non-operating income of the company. However, judicial practice shows that tax authorities still need to prove that such debts on loans with an expired statute of limitations exist, and this causes the company to understate taxable profits. Otherwise, the court may refuse the lawsuit.
Writing off accounts payable, as well as unclaimed deposits, on which the statute of limitations has expired, is performed in accordance with the Accounting Regulation, clause 78. It states that the amounts of deposits and payables with expired statutes of limitations are to be written off on the basis of information that appeared as a result of the inventory, order and written justification of the head. For non-profit organizations, these amounts are used to increase income, for commercial companies they are referred to financial results.
An inventory must be carried out before making up the annual accounts. The inventory commission when considering payables and receivables by checking the documentation establishes the validity and correctness of the amounts of debt found, including those that have an expired statute of limitations on the claim.
Write-off of accounts payable: postings
These funds, including VAT, are included in other income that is recognized in the reporting period when the statute of limitations has ended. In accounting, this operation is fixed by posting a debit 60 of the account and a loan of 91. The amount of debt having an expired statute of limitations is included in other income.
In some cases , the limitation period may be interrupted for a certain period and then continue. This occurs in cases where the creditor goes to court, and when the debtor recognizes its debt obligations. The company needs to show that it recognizes its debt. The actions that are carried out in order to interrupt the statute of limitations for the claim and which indicate recognition of the debt include the following:
- partial payment of debt under the main contract, as well as the amount of sanctions, including partial recognition of various claims for the payment of debt, if it has only one basis, and it does not work out their various grounds;
- recognition of the claim;
- payment of interest on the principal;
- acceptance of a collection order;
- the change by the authorized person of the contract, from which the recognition by the debtor follows, and also, if a request for this amendment of the contract (by installments or deferred payment) proceeds from it .
In cases where the company once every three years recognizes its debt in writing, the statute of limitations will be extended and no debts will need to be written off.
When the statute of limitations is interrupted, accounts payable are not written off, and, therefore, taxpayers do not have non-operating tax income.
So, for example, one company purchased goods from another. Suppose, on November 15, 2010, the recipient turned to the supplier with a request for a deferred payment. As a result, the parties entered into an additional agreement to the agreement on settlements for goods until 01/15/2011. In such a case, the statute of limitations is interrupted, and a new countdown will occur from 2.01.2011.
The resulting payables can be terminated if the obligation is fulfilled both by the debtor himself and by an authorized third party.