The write-off of accounts receivable in tax accounting is considered a procedure carried out by accounting specialists on a regular basis. Accounts receivable are cash owed to the organization by counterparties. In other words, accounts receivable in the Tax Code are the assets of a company that are taken out of circulation.
Features
Given inflation, this phenomenon negatively affects the financial position of the company. The situation is aggravated when tax receivables become unrealistic to take from those who should. Due to the many features of the process, enterprises always have questions. An example of a debt cancellation order is shown in the photographs attached below.
Procedure
Cash is withdrawn, guided by the laws in force in the Russian Federation established by the Civil Code. Carry out this, strictly observing the order. On the expiration date of the limitation is recorded:
Debit 63 “Provisions for doubtful debts”; Credit 62 “Settlements with buyers and customers” (60 “Settlements with suppliers and contractors”, 76 “Settlements with other debtors and creditors”, etc.) - funds that cannot be withdrawn are debited from reserves.
Sometimes a situation arises when there is not enough cash in the reserve. Then make the posting:
Debit 91 “Other income and expenses”; Credit 62 (60, 76, etc.) - debt that cannot be removed is debited. Debit 007 “Debt written off at the loss of insolvent debtors” - take into account debt that cannot be collected in order to wait for the moment when the situation changes, and this becomes possible.
If subsequently the person pays the money, they write in the account:
Debit 51 "Settlement accounts"; Credit 62 (60, 76, etc.) - received funds from the debtor. Debit 62 (60, 76, etc.); Credit 91 - the debt received is included in other income; Credit 007 - bad debt written off by the debtor was written off.
How do bad debts be recognized?
The tax code for receivables governs a separate list of procedures. Article 265 of the Tax Code of the Russian Federation states that non-operating expenses are losses that have been received for different time periods. This includes bad debts. But the situation improves if the organization has already formed reserves for doubtful debts. Then new write-offs are offset by reserves, which becomes beneficial for the legal entity.
They declare their special grounds for the recognition of receivables in accounting and tax accounting as uncollectible. So, to recognize it as such is possible with the following points.
- The statute of limitations expires.
- Obligations are terminated due to the fact that they can no longer be fulfilled.
- Obligations are terminated due to a decision of a state body.
- Obligations are terminated due to the abolition of the enterprise.
For another reason, receivables and payables in tax accounting are not considered hopeless.
Interestingly, accounting does not contain the concept of "hopelessness" of debt. But in PBU it is determined that other expenses of the enterprise include receivables with an expired limitation period and other debts, which it is not more possible to recover. Since the laws of the Russian Federation do not give the concept of “unrealistic for collecting debts”, enterprises themselves determine and approve it. But it must be remembered that a personal definition of the concept sometimes leads to the fact that it is necessary to apply PBU. Therefore, the situation when the criteria for write-offs of bad receivables in tax accounting and accounting will be the same, always need a reason to determine its hopelessness.
Limitation of actions
In the Civil Code, the statute of limitations is a temporary period designed to protect the rights of the victim. It starts immediately, as a person admitted a violation of his rights.
Usually the term is 3 years. However, sometimes for different cases the law provides for different periods of time. For example, if the work was improperly performed, the limitation period is 1 year from the moment when the customer accepted the results of the activity, or from the moment when he announced the presence of shortcomings in the results.
If we are talking about transportation of goods, then it will also be 1 year. The fact from which moment they begin to count it is decided by the code, as well as the transport charter. For example, in cases where the agreement does not reveal the moment at which the obligation is to be fulfilled, it is considered that the procedure should be carried out within a reasonable time.
Often, the calculation of the limitation period is suspended, and then begins again. The time that passed before the pause is not taken into account in the new term. Most often this happens when the debtor confirms that he has a debt. He can do this in the following ways:
- Pay part of the debt.
- Pay interest on arrears.
- Contact the lender on this issue.
- Sign an act of reconciliation of debt.
- Declare offset of mutual claims.
- Agree to debt restructuring.
Usually, when the relevant authorities check the progress of the matter, confirmation is required from taxpayers that everything possible has been done in order to recover the amount of debt.
Laws in force in the Russian Federation establish that there is no relationship between writing off money and the presence of such actions by taxpayers. Since the legal fact that the debt is not recoverable is confirmed by the circumstance that has already been established in the case, it is recognized as hopeless and so. And tax officials do not question this. There is not a single reason for recognizing that taxable profits will be reduced by writing off debts to non-operating expenses upon expiration of the limitation period.
However, in order to recognize the hopelessness of debts using this basis, the company is obliged to provide a number of documents that will help to identify the date the debt appeared. Usually this includes invoices for payment, acts of delivery and acceptance of work, the provision of services.
Official act
Obligations are subject to termination when it is not possible to fulfill them, if this is provoked by reasons independent of the actors. These include force majeure, force majeure circumstances: natural disasters, emergencies, fires. For example, when rental objects are burned up, obligations to rent them out.
The same consequences occur if the debtor dies, and execution is impossible without his direct participation. This happens if the obligation is closely related to his personality.
The next condition leading to the termination of obligations is special official acts. These include acts of the Bank of the Russian Federation, legal acts. Often the following question arises: when the debtor is deprived of the right to fulfill his obligation due to the loss of a license, are debts also considered bad?
In these conditions, a number of points must be taken into account. It would seem that the inability to fulfill the obligation was provoked by a circumstance for which the counterparties could not be fully responsible. However, a license is revoked only when a person acts unlawfully. Therefore, failure to fulfill an obligation in this case is never considered a good reason for recognizing the end of obligations on the basis of an act of an official body. Therefore, it is important to consider the guilt of the one who lost the license. If, as is sometimes the case, the guilt is not proven, bad debt is recognized. But practice shows that most often the licensee is responsible for this.
Executive production
If the creditor wins the lawsuit, the loser pays the money that he owes on these grounds. Otherwise, the decision is enforced. There is an important question: are court decisions considered a sufficient basis for recognizing the bad debts and classifying them as unrealized expenses of the enterprise?
The bailiffs sometimes return the writ of execution due to the inability to recover the amount, and the second time it is possible to demand the recovery in the next three years. This action interrupts the term. The bailiffs have no reason to refuse to accept documents for execution. The bailiffs will start production again, they will give a new document if it is not possible to recover money.
Because of this, the publication of acts does not lead to the endowment of the debtor with the right not to repay debts. They only emphasize that at that moment the bailiff was unable to recover funds from the counterparty. When the production ends, there are supporting documents, this does not lead to the release of the counterparty from the obligation. It remains the obligation to pay off debts.
The abolition of the enterprise, which should
Another criterion for the impossibility of fulfilling an obligation is the abolition of an enterprise when rights and obligations do not transfer to other persons.
An entity may cease to exist as a result of:
- Going through bankruptcy proceedings.
- Decisions of the founders.
- Decisions of the judicial authority, if violations were found in the creation of a legal entity or the absence of a license. An organization is abolished if it grossly violates the law.
In this case, the creditor is obligated to declare his right to this money. They are written off after the debtor company is liquidated. Then the court order is considered the basis for recovery.
The law on state registration indicates that an enterprise is considered liquidated only from the moment when a record confirming this has been entered into the Unified State Register of Legal Entities. Prior to this point, writing off debts is considered unlawful.
Legal entity exclusion from registration
Another separate reason is the removal of the company from the registry. All legal entities that have not submitted tax reporting over the past 12 months are excluded from the Unified State Register of Legal Entities. It is also necessary that they do not perform any actions on their contributions.
At what point is bad debt written off
Sometimes the statute of limitations expires, and the taxpayer reveals this much later. When this happens, you need to decide for how long the debts are recorded and whether they are considered non-operating expenses.
Article 272 of the Tax Code determines that expenses are included in the period when they arose according to the characteristics of the transaction. Bad debts are taken into account when they form the tax base for profit. She also ranked as non-operating expenses. In order to classify debt as uncollectible, at least one basis is required.
The Tax Code of the Russian Federation defines the date on which the bad debts were recognized as the date of the tax period on which the losses occurred - the statute of limitations has expired and the obligations have ended due to the fact that it became impossible to fulfill them.
There is no other procedure for recognizing bad debts. In cases where the inventory is not carried out in a timely manner, this fact does not affect the date on which the bad debt is recognized. It is because of this that the expired statute of claim is reimbursed in the tax period that has already passed. Otherwise, it will be illegal. In the Tax Code of the Russian Federation, expenses are attributed to the time period when the obligations occurred. Liabilities were the reason for identifying bad debts.
The taxpayer further agrees to provide income tax returns for the periods during which debts should have been written off. If you find inaccuracies in the design of tax bases related to the past tax period, then recalculate and calculate the amount of tax. This is done for the period in which inaccuracies are made.
Regardless of the periods when errors were identified, the company has the right to file revised tax returns, including the amount of the identified debt in non-operating expenses. This is how taxpayers re-calculate the tax base for a specific period. This helps reduce income taxes.
However, a number of official representatives say that bad debts are written off in the same time period in which the taxpayer began to have the right to do so. Other jurisdictions tend to believe that tax debt relief laws do not declare the exact time period in which money can be written off. Indeed, strict regulations do not exist.
What debt write off
Only a portion of the receivables to be debited in tax accounting may lie. Her hopelessness for such an operation necessarily needs official recognition. It should also be borne in mind that such are the debts of organizations that have already been excluded from YSYURL later than September 1, 2014. If it was expelled from there before this date, then the write-off of overdue receivables in tax accounting occurs on a common basis.
If money is indebted to the IP, then the procedure is not carried out. This is due to the fact that the individual responsible for the debt personal property. Write-off of bad receivables in tax accounting from a merchant is carried out only in two cases. Which ones? When he went bankrupt or died. These are the most important reasons for writing off receivables in the Tax Code. Sometimes this process is carried out after a court order. This happens when the court recognizes that it is unrealistic to write off the overdue tax accounting receivables from the merchant, because his whereabouts are unknown. Therefore, before carrying out this, it is important to make sure that the circumstances for the implementation of the procedure are present.
Debtors
Sometimes partners must become each other. Then, in all cases, the amounts are calculated, reducing the receivables in the amount of cash that they owe to the partner. If, having completed this procedure, the counterparty remains due, then the amount is considered impossible for withdrawal, and tax debt is written off. If there is information that the one who should have gone bankrupt or was expelled from the JURL after September 1, 2014, it becomes clear that the amount is not refundable. The situation when the limitation period expires is somewhat different. Be sure to take into account that it lasts 3 years. If he was suspended, started again, then he can not exceed 10 years under any circumstances.
Documenting
When it was determined that there is money that cannot be withdrawn, they act as follows. In order to write off the receivables of the Tax Code of the Russian Federation, an inventory act is required. The results of this work are recorded on the INV-17 list. Next, the manager issues an order liquidating the debts of the legal entity. In the accounting certificates the full amount is written, a description of the situation, then, on what grounds the debt is written off, the order data is noted.
You need to know that all the money written off in this way is checked by tax officials with particular care. Tax requires a breakdown of receivables and payables. So this point needs to be paid a lot of attention.
For this reason, for the competent conduct of write-offs of receivables in tax accounting, it is important to attach to the order a history of debts, documents that confirm the reality of transactions. Typically, a set of documents includes many contracts, invoices, accounts, acts on the provision of services, acts of reconciliation. An important application is that will show the hopelessness of tax accounting receivables. These include extracts from the JYURL, as well as decisions of the bailiffs.
In accounting
The procedure for accounting in an enterprise will depend most often on the availability of reserves for doubtful debts. If any, then make notes: Debit 63; Credit 62 (76 or other accounts for accounting debt to the company). They are called tax receivables postings.
If the amount of debts turns out to be more than reserves, then they write: Debit 91.2; 62 ( ). .
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Insurance
Many conduct tax receivables insurance. Having designed it, you can reduce the risk that this phenomenon causes. If there is such insurance, the business is developing in much safer conditions.
This is achieved by evaluating the financial situation of everyone with whom the company deals. There is always a limit on the funds to be refunded. If the partners are unreliable, then the money is paid by the insurer. When a policy is in effect, you can always request an increase in the limit for a partner if it becomes necessary to increase the turnover with him. Insurance companies view the history of each counterparty, which allows them to correctly assess the risks in this case. They approve the increase in the limit or refuse it, relying on the information received and justifying their decision with it.
Such services are convenient, since insurance companies collect data from all sources, using all the documents that they have access to. They look at the financial statements, information about all policyholders who conduct business with the same partners. They also meet with them in person.
Information is subject to constant updating. Upon detection of financial difficulties of any counterparty, the policyholder receives information immediately. The insurance company is involved in the development of a plan aimed at preventing or minimizing losses.
In cases where the loss took place, the policyholder shall indemnify the loss in the amount that was agreed in advance.
Answers to the tax
It must be remembered that it is impossible to leave the tax unanswered. If there is a need to give an answer to the tax on the increase in receivables, it is worth providing. In solving this issue, professionals help. However, it is important to know that the method of providing an answer is not strictly regulated by law. That is, it can be provided in any form, even verbally. But in order to protect yourself, it is better to answer in writing, so that the evidence of an answer is preserved.
Summary
The process of writing off receivables is not considered difficult. It is strictly regulated. Violations of the law lead to questions from the tax authorities and the additional charge of income taxes, and fines for deficiencies in accounting. For these reasons, it is important to make sure in advance that an inventory has already been taken, that the necessary order has been issued.
The law recently expanded the list of grounds for writing off debts. In addition, today it is no longer necessary to wait three years, but the debts of legal entities that have been excluded from the registry are written off at the date the debtor was expelled from it.
But do not provoke an increase in the organization’s expenses by writing off receivables. We must try to achieve the goal of eliminating the accounts receivable of counterparties. This is done simply: it is enough to offer to restructure the debt or arrange it in installments. Such an action will be beneficial for both parties. Therefore, many people resort to this decision. Nevertheless, it is important to know how to write off receivables under the Tax Code.