The legislation existing in the Russian Federation today, in the framework of the Federal Law No. 402 "On Accounting" dated December 6, 2011, provides for the accounting of business transactions, liabilities and property strictly in rubles. Tax accounting, or rather its maintenance, is also made in the specified currency. But some revenues are not in rubles. Foreign currency, in accordance with the law, must be converted. Further in the article we will consider such a concept as "exchange rate difference". What are these assets? In what cases do they appear and how are they reflected in the documentation?
general information
In the framework of the law, it is noted that monetary operations on the organization’s accounts are carried out in rubles at the rate established by the Central Bank of the Russian Federation on the day the transaction is conducted directly. Situations are legally provided for when recalculation is allowed on a different date than the moment the calculation was made. In cases of fluctuations (changes) in the exchange rate relative to the revaluation dates, an exchange difference arises. It reflects the operation leads to the appearance of additional income or expense. The exchange rate difference arises when assessing the same asset (claim, liability), expressed in the currency of a foreign country, at different points in time, excluding the situation when the currency exchange rate is constant.
Accounting and tax balance
Foreign exchange differences are accounted for in both tax and accounting. However, their reflection in the documentation has certain differences. Tax accounting provides for the presence of exchange rate and amount differences. Accounting documents reflect only one type. They represent only exchange rate differences. Moreover, the basic essence of the concept is also different for the accounting and tax balance. Accordingly, the calculation for each species is different. Not the last factor influencing the occurrence of exchange rate differences in tax accounting is the option of calculating the tax base. The taxpayer, in accordance with applicable law, is entitled to use the cash or accrual method.
Bookkeeping
Foreign exchange differences arise as a result of transactions in payables or receivables in foreign currencies. In such cases, a certain condition must be met. The exchange rate of the monetary unit on the settlement date differs from that at the time of the adoption of the obligation to be reflected in the reporting period or from the indicator at that reporting date on which the last translation is made.
It also occurs in other cases. For example, for translation transactions:
- the value of monetary units at the organization's cash desk;
- assets in bank accounts;
- cash, payment documents;
- valuable papers.
How are exchange differences reflected?
Postings of assets are carried out in accordance with certain requirements. It should be noted that the reflection in the documentation has its own specifics. So, accounting for exchange rate differences in accounting operations is recorded separately from other types of expenses and income. At the same time, with the exception of cases of settlements on contributions to the authorized capital, the assets under consideration are subject to mandatory transfer to the financial and economic result of the company. Then the display in accounting documents is fixed in the form of income (in the case of an increase in the rate) or expense (in the event of a fall).
Contributions of founders to the authorized capital
These receipts can be made not only in rubles. In cases where, in accordance with the statutory documents, the contribution of the founders to the authorized capital is made in foreign currency, this is reflected in the accounting documentation on account 80 ("Authorized capital"). How are these exchange rate differences recorded? Postings are made in rubles at the exchange rate set by the Central Bank at the time of registration of the legal entity. In the event of situations in which the owners pay off the debt, or when recounting the currency debt already arisen at the reporting date, additional assets appear. They are recorded in the 83rd account ("Additional paid-in capital"). There may also be situations in which a translation at the reporting date reveals a negative exchange rate difference. In this case, debit entries aimed at reducing the registered capital are practiced. At the same time, the debit balance is not valid. Therefore, the founders of the organization are encouraged to set a fixed rate in the reporting period. It should be recalculated once or twice during the reporting period. However, if exchange differences nevertheless arose in the course of the organization’s activities, it is recommended that they be reflected in the following debit accounts: 91 (“Other income and expenses”) or 84 (“Retained earnings or uncovered loss”). To prevent such situations, it is recommended that the organization introduce a procedure for conducting negative exchange rate differences into its authorized capital.
Reporting
Accounting includes exchange differences in other income or expenses. When summarizing data on types of business transactions, liabilities and property, the value of which is expressed in units of foreign currency, there should be a separate display of the assets in question. In this case, the income or expense associated with the purchase and sale of foreign currency is not subject to accounting in the total amount of exchange differences. There is a certain procedure in accordance with which regulation of assets is carried out. In particular:
- Foreign exchange differences arising from the translation of debt in foreign units are subject to disclosure. In this case, it is imperative that the terms of its payment in money conversion are observed.
- Assets formed as a result of debt translation in foreign currency. In this case, it must be paid in rubles.
- Exchange differences posted through the balance sheet of the organization. But the assets did not go through those accounts on which the financial result of the enterprise is taken into account.
- The rate set by the parties to the agreement at the reporting date (in some cases, it may be the official exchange rate against the ruble, which is set by the Central Bank at the reporting time).
However, they do not need to be separately reflected in the final report containing profit and loss data, assets arising from the translation of debts in foreign currency. Foreign exchange differences that generate income (with the exception of those displayed on the capital account) are posted on line 090 (form No. 2) and are included in other income. Parts forming the expense (with the exception of those that are recorded in the account for the account of additional paid-in capital) go through line 100 (form No. 2) and are included in other expenses.
Tax documentation
Exchange differences in the context of the organization may bring income or expense. Unlike accounting documentation, the purpose of which is to determine the financial result from the activities of a particular enterprise, the main task of tax reporting is to determine the basis on which to calculate the tax paid to the budget. Exchange differences in this case are considered from the point of view of increasing or decreasing this base. Assets that increase the organization’s income are called positive in tax documentation. According to the current Tax Code of the Russian Federation, such income must be included in non-operating income. Exchange differences that increase the organization’s expenses in tax accounting are called negative. According to the current Tax Code, which is adopted and operates in the Russian Federation, such assets must be included in non-operating expenses.
Practical activities of the organization
Under the exchange rate difference is understood any type of revaluation of liabilities, claims, property held in foreign currency. Accordingly, payment on them should also be made in the same monetary units. In cases where payment for the revaluation of obligations, claims, property is made in rubles, the difference arising from fluctuations in the exchange rate is called the sum. At the same time, a taxpayer working on a cash basis does not encounter such assets at all in the course of his activity. Exchange differences with this approach arise at the time of revaluation of the organization’s values, expressed in foreign currency, or at the direct revaluation of monetary units at the cash desk of the enterprise.
Reflection in tax reporting
Tax documentation takes into account the occurrence of foreign exchange transactions not only on the last day in the reporting period. This happens at every moment when they appear. Accounting for total receipts, unlike exchange rate, is carried out only with the direct repayment of debt. In this case, the assets do not have any effect on the size of the tax base. This is due to the fact that they are not calculated at the reporting date according to the documentation. These conditions, within the framework of the tax laws that exist today, apply only to taxpayers whose basis for work is the accrual method to reflect their tax base. Provided that the enterprise or entrepreneur uses the cash method in their work in the process, no total assets arise at all. The occurrence of exchange differences is also due to the revaluation of currency values expressed in balances of monetary units that are in the accounts or at the cash desk of the company.
Reflection in the Declaration
The positive sum (exchange rate) differences in the tax documentation were reflected in line 100 of Appendix No. 1, sheet 02 of the Declaration, in the structure of non-operating income. Accordingly, negative assets account for non-operating expenses. They pass along line 200 from Appendix No. 2 to 02 of the Declaration sheet.
Investment in authorized capital in tax documentation
Under the current tax legislation, it is allowed, when determining the tax base used for calculating profit payments, not to take into account the organization’s funds received from owners and aimed at increasing the authorized capital. In addition, it does not count as a profit arising from a taxpayer receiving his rights to property acquired in exchange for his shares (shares) transferred to the disposal of the enterprise. In this regard, exchange rate differences aimed at changing the authorized capital are not grounds for accruing income tax on them.
Differences in financial result and tax base
The result of different determination of the moments of occurrence of the considered exchange rate and total assets in the accounting and tax documentation is the mismatch of the final financial result of the organization with its tax base used to calculate income tax. However, this discrepancy is not critical, since, in essence, it is a volatile phenomenon and it is included in the category of temporarily taxable (deductible) differences. The formed assets will be surely taken into account in the future, when preparing the accounting documentation when calculating the corporate income tax.
conclusions
The activity on reflection in the accounting documentation of the formed assets is carried out in accordance with the procedure established by law. Exchange differences for all types of obligations, the cost of which is set in foreign currency, but the payment of which is made in rubles, is formed as a result of translation on the date of settlement of obligations or on the last day in the reporting period. This is one of the differences from tax accounting. As mentioned above, it provides for the calculation of assets arising only at the time of repayment of obligations. At the same time, exchange differences that arose in accounting at the reporting dates are not grounds for calculating income tax.