OS: adjusting accounting. Change in the initial cost of an item of fixed assets in tax accounting Change in the initial cost in tax accounting
The organization bought used equipment in Italy. The equipment was installed, put into operation and accounted for on account 01 as part of the operating system. As a result of operation, a number of shortcomings in the purchased equipment were identified. A claim was sent to the supplier and preliminary consent was obtained for a proportionate reduction in the cost of the equipment. How to reflect a decrease in the value of a fixed asset in accounting and tax accounting if clause 2 of Article 257 of the Tax Code of the Russian Federation defines a list of cases in which it is possible to change the value of fixed assets.
Marina Bembeeva answers, expert
In this case, the change in cost must be reflected as a correction of the error. In accounting, you need to correct the cost using adjusting entries.
Debit 08 Credit 60 REVERSE debt to the supplier;
Debit 01 Credit 08 REVERSE the original cost of fixed assets.
Debit 08 Credit 60 reflects the amount of debt to the supplier after adjustment;
Debit 01 Credit 08 reflects the adjusted initial cost.
In tax accounting, it will be necessary to submit an updated income tax return (if the organization filed it taking into account accrued depreciation on equipment), because expenses (accrued depreciation) are overstated.
1.When the original cost of a fixed asset can be adjusted
Usually, once the initial cost has been established, it is not changed during the operation of the fixed asset. There are only a few isolated cases where this is possible. Thus, a change in the initial cost of a fixed asset is permissible during its completion, additional equipment, reconstruction, modernization, partial liquidation and revaluation. This procedure follows from paragraph 14 of PBU 6/01.
There is, however, another situation when the initial cost of a fixed asset will have to be adjusted. You will have to do this if a significant mistake was initially made when forming the initial cost. The fact is that such an error can lead to a gross violation of the rules for keeping records of income and expenses. And it needs to be fixed. This instruction is in paragraph 4 of PBU 22/2010.
If there is no error and some expenses associated with the acquisition of the object are incurred by the organization after its inclusion in the fixed assets, do not change the original cost. And take into account the costs as part of expenses for ordinary activities.*
Elena
2.Can an investor increase the initial cost of a construction project accepted from the developer and put into operation? After the object was registered, the investor’s obligations under the construction investment agreement increased
Yes, it can, if the initial cost was initially formed incorrectly.
As a general rule, the initial cost of a fixed asset does not change during its operation. There are exceptions to this rule, a list of which is contained in paragraph 2 of Article 257 of the Tax Code of the Russian Federation. A change in the initial cost due to its incorrect formation when putting a fixed asset into operation is not included in the list of such exceptions.
At the same time, if an error is detected for past reporting (tax) periods, the organization has the right to recalculate the tax base for the periods when the error was made (clause 1 of Article 54 of the Tax Code of the Russian Federation). Thus, the Ministry of Finance of Russia classifies as such an error, in particular, an increase in the investor’s contractual obligations to the developer as a result of the following circumstances:
– the cost of work according to the act signed before the facility was put into operation was transferred to the investor after it was put into operation;
– the increase in the price of construction work occurred on the basis of a court decision that entered into legal force.
Such additional expenses are included in the expenses that form the initial cost of the object, therefore, the investor can take them into account when calculating income tax ().
This can be done in one of two ways:
– starting from the date of putting the facility into operation, make corrections to the tax registers for accounting for depreciation and submit updated tax returns (clause 1, article 54, and the Tax Code of the Russian Federation);
– recalculate depreciation starting from the date the facility was put into operation and take into account the additional accrued difference in the expenses of the current period (clause 1 of Article 54 of the Tax Code of the Russian Federation).
Such clarifications are contained in the letter of the Ministry of Finance of Russia dated November 12, 2012 No. 03-03-10/126.*
Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank
3.How to correct errors in accounting and financial reporting
How to correct errors of the current period in accounting
In accounting, correct errors of the current period with the necessary adjusting entries.*
Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank
4. In what cases is an organization required to file an updated tax return?
Understatement of the tax base
An organization is required to submit an updated tax return if it has discovered inaccuracies or errors in a previously submitted return that resulted in an understatement of the tax base and incomplete payment of tax to the budget. You need to submit an updated declaration if the period in which the error was made is known. If the period in which the error was made is unknown, the adjusted declaration is not submitted. In this case, the tax base and tax amount must be recalculated in the period in which the error was discovered. This follows from the provisions of Article 81 and paragraph 1 of Article 54 of the Tax Code of the Russian Federation.
This procedure applies to both taxpayers and tax agents. At the same time, tax agents are required to submit updated calculations only for those taxpayers in respect of whom errors were discovered. This is stated in Article 81 of the Tax Code of the Russian Federation. For example, an updated tax calculation (information) on income paid to foreign organizations must be submitted only for those taxpayers whose data was distorted in the initial calculation.*
Cases in which it is possible to change the initial cost of fixed assets are given in paragraph 14 of Instruction No. 26. These include:
1) reconstruction (modernization, restoration) of fixed assets, carrying out other similar work;
2) revaluation of fixed assets in accordance with the law;
3) other cases established by law.
In essence, the list of such cases has not changed. It is only necessary to clearly know their rationale, because not in all cases it is contained in Instruction No. 26.
Let us provide a comparative table to the above.
| Until 2013 (Instruction No. 118*) | From January 1, 2013 (Instruction No. 26) |
|---|---|
| The initial cost of fixed assets is not subject to change, except in the following cases: | |
|
1) modernization, reconstruction, partial liquidation, additional equipment, completion, technical diagnostics and corresponding examination, other capital works; |
1) reconstruction (modernization, restoration) of fixed assets, carrying out other similar work; |
| 2) revaluation of fixed assets in accordance with the law; | 2) revaluation of fixed assets in accordance with the law; |
|
3) inclusion at the end of the reporting year in the cost of fixed assets, costs incurred (accrued) after the commissioning of fixed assets and separately accounted for during the reporting year as investments in non-current assets: a) exchange rate differences from the revaluation of accounts payable for obligations related to the acquisition of fixed assets, and amount differences arising in the settlement of obligations related to the acquisition of fixed assets (with the exception of organizations financed from the republican and (or) local budgets based on budget estimates having a current account with bank institutions and maintaining accounting records in accordance with the Chart of Accounts for accounting for the execution of cost estimates of organizations financed from the budget); b) expenses associated with the purchase of foreign currency for making payments when making capital investments in fixed assets. |
3) other cases established by law: a) differences arising during the revaluation of property and liabilities in foreign currency are attributed by commercial organizations to accounts payable (including loans received, borrowings and interest on them), accounts receivable for advances issued for the performance of work and the purchase of equipment and materials arising when making capital investments in unfinished construction projects, fixed assets after commissioning (transfer) of fixed assets and into operation - at the end of the reporting quarter and (or) year for the cost of fixed assets (except for interest on loans and credits received). Justification: sub. 1.2.3 Decree of the President of the Republic of Belarus dated June 30, 2000 No. 15 “On the procedure for revaluing property and liabilities in foreign currency when the National Bank changes foreign exchange rates and reflecting exchange rate differences in accounting” (hereinafter referred to as Decree No. 15); b) expenses associated with the purchase of foreign currency, in the amount of the difference between the purchase rate and the National Bank rate at the time of purchase, are written off by commercial organizations for settlements when making capital investments in unfinished construction projects, fixed assets (including those used for these goals for loans, credits and interest on them) after the commissioning (transfer) of fixed assets into operation - at the end of the reporting quarter and (or) year for the cost of fixed assets (except for interest on loans and credits received). |
|
4) Interest on loans and borrowings received for the purchase of fixed assets, accrued after the commissioning of fixed assets, in accordance with the accounting policies of the organization, can be accounted for as part of: Operating expenses; Investments in non-current assets during the year and at the end of the reporting year are included in the cost of fixed assets (with the exception of interest on overdue loans and borrowings). |
4) Interest on loans and borrowings received for the acquisition (creation) of fixed assets, accrued after the acceptance of fixed assets for accounting, organizations have the right to take into account during the reporting year as part of investments in long-term assets and at the end of the reporting year include them in the initial (revalued) cost of fixed assets. Justification: Resolution of the Ministry of Finance of the Republic of Belarus dated March 11, 2013 No. 16, |
_____________________________
* Instructions for accounting of fixed assets, approved by Resolution of the Ministry of Finance of the Republic of Belarus dated December 12, 2001 No. 118.
Impairment of fixed asset
Organizations have the right, based on the decision of the manager, to reflect in the accounting records at the end of the reporting period the amount of depreciation of a fixed asset, which is equal to the amount of excess of the residual value of the fixed asset over its recoverable value.
Signs of impairment of fixed assets that must be determined for the period from the beginning of the year to the reporting date:
1) a significant (more than 20%) decrease in the current market value of a fixed asset;
2) significant changes in the technological, market, economic environment in which the organization operates;
3) increase in market interest rates;
4) a significant change in the method of using a fixed asset;
5) physical damage to the fixed asset;
6) other signs of impairment of fixed assets.
To reflect the amount of impairment it is necessary to have:
a) documentary evidence of signs of impairment of fixed assets;
b) the possibility of reliably determining the amount of impairment.
If there are signs of impairment of a fixed asset, the organization must determine its recoverable amount at the end of the reporting period. It is the greater of the current market value of the fixed asset minus the estimated costs directly related to its sale and the value in use of the fixed asset.
Conditions under which an asset is considered impaired:
The concept of recoverable amount and its assessment, reflected in Instruction No. 26, is also defined in the international financial reporting standard (IAS 36) “Impairment of assets”.
The value in use of a fixed asset is the present (discounted) value of future cash flows from the use of the fixed asset and its disposal at the end of its useful life (clause 16 of Instruction No. 26).
The present (discounted) value of future cash flows from the use of a fixed asset and its disposal at the end of its useful life is determined by multiplying the discount rate by the amount of future cash flows from the use of a fixed asset and its disposal at the end of its useful life. In this case, future cash flows are determined for a period of no more than 5 years (clause 16 of Instruction No. 26).
The refinancing rate established by the National Bank can be used as a discount rate.
If signs of impairment of a fixed asset in the reporting period cease to occur, then, based on the decision of the head of the organization, the accounting at the end of the reporting period reflects the amount of restoration of impairment of the fixed asset within the accumulated amount of impairment for this fixed asset.
The amount of impairment of a fixed asset accounted for at historical cost is reflected by recording:
D-t 91 “Other income and expenses” - D-t 02 “Depreciation of fixed assets” (separate sub-account).
The amount of reversal of impairment of a fixed asset accounted for at historical cost is reflected by the entry:
Dt 02 (separate subaccount) - Kt 91.
Example 1
On the organization's balance sheet, a computer purchased in 2009 is listed as a fixed asset. The Commission on Depreciation Policy reflected in the protocol signs of depreciation of this fixed asset. The decision to reflect in the accounting records the amount of depreciation of this fixed asset at the end of the reporting period was formalized by order of the manager. The residual value of the computer is 2,000,000 rubles. The market value of the computer is documented and equal to 1,000,000 rubles, the estimated costs of implementation, according to the calculations of the organization's economist, will be 20,000 rubles. According to the accounting policy of the organization, the refinancing rate of the National Bank is used as the discount rate (C)
(30% per annum). The amount of expected future cash flows (D) from the use and disposal of the computer is 200,000 rubles. over the next 2 years.
It is necessary to determine the recoverable cost (RC) of the computer.
BC = RS - RR - C,
where: RS - market value,
РР - sales costs,
V - the value of using a computer.
C = discounted value (DS) = = D / (1 + C / 100)t, where t is the period for which the sum of expected cash flows is calculated. For this example t = 2.
DS = 200,000 / (1 + 0.3)2 = 118,343.
BC = 1,000,000 - 20,000 - 118,343 = 861,657.
The amount of depreciation of the computer will be RUB 1,138,343. (2,000,000 - 861,657).
In accounting, this amount is reflected as follows:
D-t 91-4 - K-t 02 (sub-account “Depreciation of fixed assets”).
Reflection of the revaluation of fixed assets during their revaluation
The emergence of the concept of impairment of fixed assets in 2013 led to a change in the reflection of the revaluation of fixed assets.
If there was a previous impairment...
If, as a result of revaluation, the organization restores the amount of depreciation of a fixed asset previously reflected on account 91, then when reflecting the results of the revaluation, the following entries must be made:
Dt 01 "Fixed assets" - Kt 91
- by the amount of restoration of the depreciation of the original cost of the fixed asset;
Dt 91 - Kt 02
- for the amount of restoration of accumulated depreciation markdown;
Dt 01 - Kt 83 "Additional capital"
- for the remaining amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02
- for the remaining amount of accumulated depreciation of the fixed asset.
If there was no impairment...
If there was no depreciation of the fixed asset, then the entire amount of the revaluation of this fixed asset, determined during the revaluation, must be reflected in traditional entries:
Dt 01 - Kt 83
- by the amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02
- by the amount of additional valuation of accumulated depreciation of fixed assets.
Organizations must apply these rules starting with the revaluation, which will be carried out as of January 1, 2014, subject to the necessary conditions.
Based on the results of the revaluation, a depreciation of the fixed asset was established
The amount of depreciation of a fixed asset established during its revaluation is included in the reduction of the additional fund within the existing balance for this fixed asset (subclause 18.2, clause 18 of Instruction No. 26). This norm puts forward a requirement for organizations, starting from 2013, to maintain analytical accounting for account 83 by name of fixed assets. In addition, the amounts of revaluations of the original cost and accumulated depreciation reflected in account 83 for all previous periods must be reflected in the context of each fixed asset listed on the organization’s balance sheet as of January 1, 2013. At the moment, Instruction No. 26 and other normative -legal acts do not contain information on how to deal with the revaluation amounts reflected in account 83 for fixed assets disposed of before 2013.
When depreciating a fixed asset, you should reflect:
Dt 83 - Kt 01
- by the amount of depreciation of the original cost within the existing balance of the additional fund for this fixed asset;
Dt 02 - Kt 83
- by the amount of the discount on accumulated depreciation within the limits of the available balance of the additional fund for this fixed asset;
Dt 91 - Kt 01
- for the remaining amount of depreciation of the original cost of the fixed asset;
Dt 02 - Kt 91
- for the remaining amount of the writedown of accumulated depreciation on the fixed asset.
If for a fixed asset there is no balance of the additional fund formed as a result of previously carried out revaluations of such an asset, then the entire amount of the depreciation of the fixed asset should be reflected in account 91.
Example 2
When revaluing fixed assets as of January 1, 2014, the company applied the direct valuation method. The initial cost of the fixed asset - a profiling machine - before the revaluation was 100 million rubles, the residual value was 60 million rubles. The revalued value, according to the appraiser's conclusion, amounted to 90 million rubles, the residual value after revaluation was 54 million rubles. The balance on account 83 for the profiling machine is 5 million rubles. In accounting, on December 31, 2013, account entries must be made.
The balance on account 83 is formed as a result of the difference between the amounts of revaluations of the original cost and depreciation. The residual value of the machine in this example is 60%.
Based on the results of the revaluation, it is necessary to discount the original cost by 10 million rubles. (100 million - 90 million), the amount of depreciation - by 4 million rubles. ((100 million - 60 million) - (90 million - 54 million)).
The following must be reflected in the accounting:
Dt 83 - Kt 01- 8,333,333 rub. (5,000,000 × 100 / 60)
- the amount of depreciation of the original cost within the balance of the additional fund for the machine;
Dt 02 - Kt 83- RUB 3,333,333 (8,333,333 - 5,000,000 or 8,333,333 × 40 / 100)
- markdown of accumulated depreciation within the balance of the additional fund for the machine;
Dt 91 - Kt 01- 1,666,667 rub. (10,000,000 - 8,333,333)
- the remaining amount of the depreciation of the original cost of the machine;
Dt 02 - Kt 91- 666,667 rub. (4,000,000 - 3,333,333)
- the remaining amount of markdown of the accumulated depreciation of the machine.
Example 3
Let's use the data from example 2.
When revaluing fixed assets as of January 1, 2015, the revalued cost of the profiling machine amounted to 110 million rubles. The amount of depreciation after revaluation is 55 million rubles.
Dt 01 - Kt 91- 1,666,667 rub.
- restoration of the depreciation of the original cost of the fixed asset;
Dt 91 - Kt 02- 666,667 rub.
- restoration of the markdown of accumulated depreciation;
Dt 01 - Kt 83- 18,333,333 rub. (110,000,000 - 90,000,000- 1,666,667)
- the remaining amount of additional valuation of the initial cost of the fixed asset;
Dt 83 - Kt 02- 18,333,333 rub. (55,000,000 - 36,000,000 - 666,667)
- the remaining amount of accumulated depreciation of the fixed asset.
This article describes the method of reflecting an increase in the initial cost of fixed assets in 1C: Accounting 8. All operations related to modernization are considered, as well as its consequences (in particular, changes in the useful life of fixed assets, the procedure for calculating depreciation in tax and accounting). The second part of the article is devoted to reflecting the costs of modernization, completion and additional equipment of fixed assets when applying a simplified taxation system with the object of taxation “income reduced by the amount of expenses.”
Example 1
Construction objects
Collection of modernization costs
Rice. 1
- Construction objects: Computer;
- Expenditures: ;
- Construction methods: Contracting.
Rice. 2
- Construction objects: Computer;
- Expenditures: cost accounting item for modernization of fixed assets;
- Construction methods: Contracting.
Rice. 3
Scheme
...for tax accounting purposes
Modernization of OS when applying the general taxation regime
When reflecting transactions related to an increase in the initial cost of fixed assets and a change in their useful life in accounting, one should be guided by PBU 6/01 (approved by order of the Ministry of Finance of Russia dated March 30, 2001 No. 26n) and Methodological guidelines for accounting of fixed assets (approved. by order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n), and when reflected in tax accounting - Chapter 25 of the Tax Code of the Russian Federation.
According to the rules established by the listed acts, changes in the initial cost of fixed assets at which they are accepted for accounting are allowed in the case of completion, additional equipment, reconstruction, modernization, partial liquidation and revaluation of fixed assets. At the same time, the costs of modernization and reconstruction may increase the initial cost of fixed assets of such an object if, as a result of modernization and reconstruction, the initially accepted standard performance indicators (useful life, power, quality of use, etc.) of such fixed assets are improved (increased). Similar rules are established for tax accounting.
The useful life in accounting must be revised if, as a result of reconstruction or modernization, there has been an improvement (increase) in the initially adopted standard indicators of the functioning of a fixed asset item. If the useful life of a fixed asset in accounting increases, it can also be increased for tax accounting purposes, but only within the limits established for the depreciation group in which such a fixed asset was previously included.
In the 1C: Accounting 8 program, the document “OS Modernization” is used to reflect the increase in the initial cost of fixed assets for accounting and tax accounting, as well as to change their useful life. Let's consider the method of reflecting an increase in the value of a fixed asset using an example.
Example 1
The organization purchased a computer in January 2008 worth 20,000 rubles, with a useful life of 60 months. Depreciation is calculated using the straight-line method in both accounting and tax accounting. In May of the same year, it was decided to increase the computer's RAM capacity. The amount of modernization expenses (both for accounting and tax purposes) amounted to 1,500 rubles. (excluding VAT). This amount was made up of the cost of the RAM module (1,200 rubles) and the cost of installing it in the computer system unit, performed by a specialist from a service company.
The useful life did not change as a result of modernization.
Construction objects
Before increasing the cost of a fixed asset, it is necessary to first collect the costs associated with its modernization at the construction site. To accumulate such costs, account 08.03 “Construction of fixed assets” is intended, which allows you to conduct analytics on construction projects, cost items and construction methods. In our case, we should create a construction object for which the costs of upgrading the computer will be collected. It is convenient to enter the name of the construction project the same as that of the fixed asset for which costs are accumulated. This will make it easier to find and increase the visibility of analytical information.
Collection of modernization costs
Goods purchased from third-party suppliers are registered using the document “Receipt of goods and services” with the transaction type “purchase, commission”. In our example, on the “Products” tab of this document, you should fill in information about the memory module being registered. Since the module is intended for equipment modernization, it can be taken into account on account 10.05 “Spare parts” (see Fig. 1).
Rice. 1
Services for installing a memory module can be reflected in the same document, on the “Services” tab.
In this case, the construction object accounting account should be specified as a cost account. In our example, this will be invoice 03.08 with the following analytics:
- Construction objects: Computer;
- Expenditures: cost accounting item for modernization of fixed assets;
- Construction methods: Contracting.
The cost of a registered memory module after its installation in the computer system unit should also be attributed to the “Computer” construction project. This can be done using the document “Request-invoice” (see Fig. 2).
Rice. 2
As a cost account, you need to specify the construction project accounting accounts with the corresponding analytics for accounting and tax accounting. In our example, this will be invoice 08.03 with the same analytics that were used when registering services for installing a memory module:
- Construction objects: Computer;
- Expenditures: cost accounting item for modernization of fixed assets;
- Construction methods: Contracting.
When posting the document, a posting will be made relating the cost of the memory module from the credit of account 10.05 to the debit of account 08.03. As a result, all costs for upgrading the computer will be collected in account 03/08.
Increase in initial cost
After the costs related to the modernization of a fixed asset are allocated to the construction site, you can fill out the “OS Modernization” document, with the help of which the amount of such costs will be transferred from the construction site to the fixed asset.
In the "Event" input field, you need to select an event that characterizes the modernization of a fixed asset. The selected event when posting a document is entered into the information register "Events with fixed assets". Using this register, you can obtain information about all events that occurred with the fixed asset by setting up the appropriate selection. The event type must be "Upgrade". If an event with this type is not in the directory, it needs to be created.
In the “Object” input field, you should select the construction object at which the costs for modernizing the fixed asset were collected.
On the "Fixed Assets" tab in the tabular section, you should list the fixed asset objects being modernized. To do this, it is convenient to use the “Selection” button located in the command panel of the tabular section. In our example, the main tool “Computer” is being upgraded (see Fig. 3).
Rice. 3
After selecting fixed assets in the “OS Modernization” document, you can automatically fill in the remaining columns of the tabular section based on the program data. To do this, click on the “Fill” button in the command panel of the tabular part of the document, and select “For OS list” in the drop-down menu.
If several fixed assets are selected in the tabular part of the OS Modernization document, then the amount of costs accumulated at the construction site will be distributed among these fixed assets in equal shares.
Then, on the “Accounting and Tax Accounting” tab, you should indicate the total amount of costs (for both accounting and tax accounting) accumulated at the construction site. After the accounts for accounting of construction projects are indicated (in our example, 03/08), you can click on the “Calculate amounts” button in the “OS Modernization” document and the corresponding fields will be filled in automatically by the program.
After filling out the document, you can print out the acceptance certificate for repaired, reconstructed, modernized fixed assets (form No. OS-3).
When posting, the “OS Modernization” document transfers the amount of costs from the credit of the construction projects accounting account to the debit of the fixed assets accounting account. In our example, the following postings will be made:
Debit 01.01 Credit 08.03 - in the amount of 1,500 rubles.
The corresponding entry will be generated in tax accounting.
Features of calculating depreciation after modernization...
...for accounting purposes
According to the clarifications of the Ministry of Finance of Russia, in accounting, when the initial cost of an item of fixed assets increases as a result of modernization and reconstruction, depreciation should be calculated based on the residual value of the item, increased by the costs of modernization and reconstruction, and the remaining useful life (letter of the Ministry of Finance of Russia dated June 23, 2004 No. 07-02-14/144).
Consequently, after the modernization, the cost must be calculated, which will serve as the basis for further depreciation. It is defined as follows - see diagram.
Scheme
The amount received is reflected in the column "Residual value (BC)". In our example, this amount will be 20,166.68 rubles. (20,000 - 999.99 - 333.33 + 1,500).
When carrying out the “OS Modernization” document, the residual value and remaining useful life are remembered. In our example, the remaining useful life is 56 months. (60 - 4).
The new value and the new useful life for calculating depreciation are applied starting from the month following the month in which the modernization was carried out.
In our example, starting from June 2005, the amount of depreciation charges for accounting purposes will be 360.12 rubles. (20,166.68:56).
...for tax accounting purposes
The procedure for calculating depreciation after modernization for tax accounting purposes differs from how it is accepted in accounting. The rules for calculating depreciation in tax accounting are established by Article 259 of the Tax Code of the Russian Federation.
Starting from the month following the month in which the modernization was carried out, the changed original cost and useful life are used to calculate depreciation.
In our example, starting from June 2005, the amount of depreciation deductions for tax accounting purposes will be 358.33 rubles. (21,500.00: 60).
It remains to add that after the expiration of its useful life, the cost of the computer in tax accounting will not be fully repaid, since over 60 months the depreciation amount will be 21,399.80 rubles. (333.33 x 4 + 358.33 x 56).
The remaining 100.20 rubles. will be included in the depreciation amount calculated in the 61st month of using the computer.
Accounting for modernization costs when applying the simplified tax system
When reflecting operations related to the modernization, completion and additional equipment of fixed assets, accounting should be guided by PBU 6/01, and for the purpose of calculating the single tax paid in connection with the application of the simplified tax system, Chapter 26.2 of the Tax Code of the Russian Federation.
In the 1C: Accounting 8 program, the document “OS Modernization” is intended to reflect the modernization, completion and additional equipment of fixed assets.
Example 2
The organization purchased a computer in January 2008 worth 20,000 rubles, with a useful life of 36 months.
In April of the same year, it was decided to increase the computer's RAM capacity. The amount of modernization costs amounted to 1,500 rubles. This amount was made up of the cost of the RAM module (1,200 rubles) and the cost of installing it in the computer system unit, performed by a specialist from a service company.
Collection of modernization costs
Before increasing the value of a fixed asset, it is necessary to first collect the costs associated with its modernization. To accumulate such costs in accounting, account 08.03 “Construction of fixed assets” is intended. Analytical accounting on the account is carried out for construction projects. To account for modernization costs, the object of analytical accounting will be “Installing memory in the i1000 computer.”
Let's create this object in the "Construction Objects" directory.
The purchase of a memory module from a third party and services for its installation are reflected in the document “Receipt of goods and services” with the type of operation “Construction objects”.
On the "Construction Objects" tab we indicate the cost of the memory module.
Services for installing a memory module are reflected in the same document on the “Services” tab.
In this case, the construction object accounting account should be specified as a cost account. In our example, this will be invoice 03.08 with the following analytics:
- Construction objects: Installing memory in an i1000 computer;
- Expenditures: cost accounting item for modernization of fixed assets;
- Construction methods: Contracting.
For all expenses for the construction of fixed assets or their modernization (services of third-party organizations, write-off of materials, remuneration of employees), it is mandatory to indicate “Not accepted” as the procedure for reflecting expenses in tax accounting.
This is due to the fact that such expenses are not accepted in the usual manner, but reduce the tax base as part of the cost of a constructed fixed asset or modernization carried out according to the rules that are provided for expenses for the acquisition, construction and modernization of fixed assets.
Increase in the initial cost of a fixed asset
After the costs related to the modernization of a fixed asset are allocated to the construction site, you can fill out the document “OS Modernization”.
In the "Event" input field, you need to select an event that characterizes the modernization of a fixed asset.
The event type must be "Upgrade". If an event with this type is not in the directory, it needs to be created.
The specified event will be used in the name of the expense object in the book of income and expenses.
In the “Object” input field, you should select the construction object at which the costs for modernizing the fixed asset were collected.
On the “Fixed Assets” tab in the tabular section, you should list the fixed assets that are being modernized (see Fig. 4).
Rice. 4
If several fixed assets are selected in the tabular part of the OS Modernization document, then the amount of costs accumulated at the construction site will be distributed among these fixed assets in equal shares.
Then, on the “Accounting and Tax Accounting” tab, you should indicate the total amount of costs (for both accounting and tax accounting) accumulated at the construction site.
After the accounts for accounting for construction projects are indicated (in our example, 03/08), you can click on the “Calculate amounts” button and the corresponding fields will be filled in automatically by the program.
In the expense payment table, you must provide information about all payments, indicating the date and amount of payment.
If payment to the supplier is made after the document “OS Modernization” is issued, such payment must be registered with the document “Registration of payment for OS and intangible assets for the simplified tax system and individual entrepreneurs”, for which the document provides a special tab “OS Modernization”, on which you can specify the modernization document.
Recognition of expenses for modernization of fixed assets
Recognition of expenses for modernization, completion and additional equipment of fixed assets is carried out in the same manner as the recognition of expenses for the acquisition of fixed assets - at the end of the reporting period with the document “Closing the month” (Fig. 5).
Rice. 5
As a result of the document, expenses will be recognized separately for the acquisition of a fixed asset and for its modernization, and the following records will be generated:
- in section I of the Book of Income and Expenses;
- in section II of the Book of Income and Expenses.
As a result, having generated the Book of Income and Expenses for the half-year, we will obtain a calculation of expenses for fixed assets.
Paragraph 2 of Article 257 of the Tax Code determines that the initial cost of fixed assets can be changed only in cases strictly defined by the specified norm. Namely in cases:
- completions;
- retrofitting;
- reconstruction;
- modernization;
- technical re-equipment;
- partial liquidation;
- and for other reasons.
Let us define what each of the definitions used means. Paragraph 2 of Article 257 of the Tax Code notes that work on completion, additional equipment, and modernization includes work caused by changes in technological or service equipment, a building, structure or other object of depreciable fixed assets, increased loads or other new qualities.
For the purposes of Chapter 25 of the Tax Code, the reconstruction of fixed assets means the reconstruction of existing fixed assets associated with improving production and increasing its technical and economic indicators. At the same time, the reconstruction of fixed assets should be carried out according to the project and in order to increase production capacity, improve quality and change the product range.
Technical re-equipment includes a set of measures to improve the technical and economic indicators of fixed assets or their individual parts based on the introduction of advanced equipment and technology, mechanization and automation of production, modernization and replacement of obsolete and physically worn-out equipment with new, more productive ones.
From the definitions we conclude that the main purpose of carrying out this work (modernization or reconstruction) is to improve or increase the initially adopted standard indicators of the functioning of fixed assets or to change the purpose of use of the object.
However, in practice there are often situations when, for example, reconstruction seems quite difficult to distinguish from major repairs. What should an accountant do in such a situation? And what documents need to be used to determine that reconstruction or repair has been carried out. Let's look at this in more detail.
Important point
The initial cost of fixed assets changes in cases of completion, additional equipment, reconstruction, modernization, technical re-equipment, partial liquidation of relevant facilities and on other similar grounds
What's all the fuss about?
It would seem, why such a distinction? And what difference does it make whether reconstruction or major repairs are carried out? The answer is simple, like everything ingenious - in accounting. In tax accounting, repair costs are taken into account as a lump sum in the amount of actual costs. Provided that the organization does not have a reserve for the repair of fixed assets (clause 2, clause 1, article 253 of the Tax Code of the Russian Federation, clause 1, article 260 of the Tax Code of the Russian Federation, clause 5, article 272 of the Tax Code of the Russian Federation).
As for reconstruction, the accounting is somewhat different. Such expenses increase the initial cost of fixed assets, which in the future can only be written off through depreciation charges (Articles 256-259 of the Tax Code of the Russian Federation). Naturally, such a write-off is extremely unprofitable for business entities, since accounting for costs in income tax expenses extends over many years.
It is also necessary to remember that the calculation of depreciation of fixed assets after reconstruction in accounting and tax accounting differs and the application of PBU 18/02 “Accounting for income tax expenses” (approved by Order of the Ministry of Finance of the Russian Federation of November 19, 2002 No. 114n) is inevitable.
From what has been said, it is clear that the accountant needs to clearly distinguish between when repairs were carried out and when reconstruction was carried out. Note that in the first case, only the shortcomings and errors formed during the work are eliminated in the object, and during reconstruction the properties of the object are improved. Of course, it is beneficial for the company to write off costs at a time and treat them as repairs. However, it is absolutely certain that the tax authorities will not agree with this. And in every convenient case they will assume that reconstruction was carried out and charge income tax with all the ensuing consequences.
Other definitions of reconstruction
Not only does it seem quite difficult to distinguish between the types of construction and installation work being carried out, it is also necessary to use legislation that has been in force since the times of the Soviet Union and branches of law other than tax law.
Let us note that the Tax Code provides too general a definition and in practice it seems quite difficult to classify exactly what types of construction and installation work were performed.
Typically, accountants use Appendix 1 to Departmental Construction Standards VSN 58-88 (r) “Regulations on the organization and conduct of reconstruction, repair and maintenance of buildings, public utility and social-cultural facilities” (approved by the Order of the State Committee for Architecture of the Russian Federation under the USSR State Construction Committee dated November 23 1988, hereinafter referred to as Appendix 1 to the BSN).
Appendix 1 to the BSN notes that the reconstruction of a building is a complex of construction work and organizational and technical measures associated with changes in the main technical and economic indicators. For example, the number and area of apartments, construction volume and total area of the building, capacity and throughput or its purpose in order to improve living conditions, quality of service, increase the volume of services.
Definitions of reconstruction can also be found in letter of the USSR Ministry of Finance dated May 29, 1984 No. 80, Methodology for determining the cost of construction products on the territory of the Russian Federation MDS 81-35.2004 (approved by Resolution of the State Committee for Construction of Russia dated March 5, 2004 15/1), letter of the State Planning Committee USSR No. NB-36-D, letter of the USSR State Construction Committee No. 23-D, USSR Stroybank No. 144, USSR Central Administration No. 6-14 dated May 8, 1984 “On the definition of the concepts of new construction, expansion, reconstruction and technical re-equipment of operations
The Law of July 18, 2011 No. 215-FZ “On Amendments to the Town Planning Code and Certain Legislative Acts of the Russian Federation” (with the exception of certain provisions) (hereinafter referred to as Law No. 215-FZ) brought a lot of clarity. These amendments introduced and supplemented the legislative acts of the Russian Federation. First of all, the innovations affected the Town Planning Code. The legislator has significantly supplemented the existing definition of reconstruction.
Thus, from July 22, 2011, you can use a new, more expanded interpretation of the definition of “reconstruction”, as well as the types of work that can be classified as it. The “new” edition contains definitions of reconstruction for capital construction projects, linear objects (communication or power lines, pipelines, roads, etc.). In addition to changing the parameters of an object, such as height, number of storeys, volume area, reconstruction also includes such types of work as: superstructure, reconstruction or expansion of an object, replacement or restoration of its load-bearing building structures, with the exception of individual elements of these structures with similar ones or other improving indicators.
There is no definition of “repair” in either tax or accounting legislation. Therefore, let us turn again to construction regulations. In the letter of the State Statistics Committee of Russia dated April 9, 2001 No. MS-1-23/1480 there is the following definition: the cost of repairs (current, medium and capital) means the cost of work to maintain fixed assets (their individual parts and structures) in working condition during their useful life, which does not lead to an improvement in the initial standard performance indicators.
In paragraph 3.1 of the Regulations on carrying out planned preventative repairs of industrial buildings and structures MDS 13-14.2000 (approved by the resolution of the USSR State Construction Committee dated December 29, 1973 No. 279) there is another definition of “repair”, defining it as a set of technical measures aimed at maintaining or restoration of the original operational qualities of both the building or structure as a whole and their individual structures. Repairs are usually divided into current and major. Law No. 215 - Federal Law made its “mite” in the definition of “repair”. So a major overhaul is the replacement or restoration of:
- building structures of capital construction projects or replacement of their elements (except load-bearing ones);
- engineering support systems and their networks;
- individual elements of load-bearing building structures for similar or other improving indicators.
Fundamental differences
The main difference between repair and reconstruction is that the purpose of the former is preventive measures, the elimination of minor damage and malfunctions in order to protect and premature wear of fixed assets. As a result of any repair, the purpose of the fixed asset object, its technical and economic indicators, technological or service purpose do not change, product quality does not improve, and production space does not increase.
The purpose of the reconstruction is to improve the initially adopted standard indicators of the functioning of the fixed asset object, to increase the capacity and useful life.
Thus, when distinguishing between the reconstruction and repair of fixed assets, the change in technical and economic indicators, technological or service purpose, and the acquisition of new qualities play a decisive role. This conclusion is confirmed by letters from the Ministry of Finance of Russia dated April 22, 2010 No. 03-03-06/1/289, dated March 24, 2010 No. 03-03-06/4/29.
Important point
The cost of the work carried out cannot be a determining factor for distinguishing between repair and reconstruction. Letter of the Ministry of Finance of Russia dated March 24, 2010 No. 03-03-06/4/29.
Arbitrage practice
The judges, taking into account these definitions, in their decisions come to the conclusion that repair work includes work that does not change the technological or service purpose of fixed assets, does not improve production and does not increase its technical and economic indicators. For example, this position is adhered to in the resolution of the Federal Antimonopoly Service of the Moscow District dated June 8, 2011 No. KA-A40/5373-11. In their decision, the arbitrators indicate that when qualifying the work performed for the purpose of classifying expenses as repair or modernization, it is necessary to proceed from the purpose and focus of such work, taking into account that repair (costs that do not increase the inventory value of the facility) include such types of work , after which the object’s performance does not improve (increase). The purpose of repair is to eliminate existing faults, the presence of which makes the operation of the fixed asset dangerous (impossible). A similar position is expressed in decisions of the FAS North-Western District dated August 30, 2010 No. A56-35754/2009, FAS North Caucasus District dated June 24, 2011 No. A53-18544/2010, FAS Moscow District dated May 11, 2011 No. KA-A41/3691-11.
Replacement of individual failed elements of a fixed asset, not associated with a change in the technological or service purpose of the equipment, or a change in its technical and economic indicators, is not modernization and is considered as a repair of a fixed asset (letter of the Ministry of Finance of the Russian Federation dated August 3, 2010 No. 03-03 -06/1/518). A similar point of view is expressed in the Resolution of the Federal Antimonopoly Service of the Volga Region dated May 17, 2011 No. A65-20282/2010).
Supreme Court Opinion
An interesting position is taken by the judges in the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated February 1, 2011 No. 11495/10. In the said ruling, the arbitrators note that the same work can be qualified as both a major overhaul and a reconstruction. The tax authority qualified the work of cutting out part of the production string intended for lifting oil from the bottom to the wellhead and drilling a sidetrack from this place as reconstruction, since as a result of the measures taken, oil production increased. However, the company took them into account in the taxable base as major repairs. The judges in their decision indicated that an increase in oil production in itself is not a sufficient criterion for qualifying the work mentioned as a major overhaul or reconstruction. And it is necessary to classify the type of work performed as repair or reconstruction based on the condition of the well. Thus, drilling sidetracks in idle wells refers to reconstruction. But work carried out in technically faulty wells or due to the extreme water cut of the formations resulting from the breakthrough of formation waters must be recognized as a major overhaul.
Accounting
A change in the initial cost of fixed assets, in which they are accepted for accounting, is allowed in cases of completion, additional equipment, reconstruction, modernization, partial liquidation (clause 14 of PBU “Accounting for fixed assets 6/01”, approved by Order of the Ministry of Finance of Russia dated March 30, 2001 No. 26n, hereinafter referred to as PBU 6/01).
Upon completion of work on the completion, additional equipment, reconstruction, modernization of a fixed asset item, the costs recorded in the account for investments in non-current assets either increase the initial cost of this fixed asset item and are written off as a debit to the fixed asset account, or are recorded separately in the fixed asset account , and in this case, a separate inventory card is opened for the amount of expenses incurred (clause 42 of the “Methodological guidelines for accounting of fixed assets”, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n, hereinafter referred to as the Guidelines).
The costs of such work are recorded on account “08” “Investments in non-current assets”. Upon completion of the work performed, they must be written off from the credit of account “08” “Investments in non-current assets” to the debit of account “01” “Fixed assets” (clause 42 of the Methodological Instructions, Instructions for using the chart of accounts). In connection with the modernization, reconstruction, completion or additional equipment, the useful life of the facility may be changed (clause 20 of PBU 6/01).
Depreciation for the reconstructed facility will be accrued from the first day of the month following the month of completion of all reconstruction work (clause 21 of PBU 6/01, clause 4 of Article 259 of the Tax Code of the Russian Federation).
note
When carrying out repairs, you need to draw up a defect report.
Documenting
Expenses for repairs, reconstruction and other expenses must be documented. This requirement is contained in paragraph 1 of Article 252 of the Tax Code. The Tax Code does not contain a list of documents that can be used to confirm expenses for repairs, additions, modernization and other similar expenses. Also, do not forget that supporting documents must comply with the requirements of Article 9 of Law No. 129-FZ. Consequently, any primary documents on the completion of these works can serve as documents confirming these expenses. Let's consider this point in more detail.
If the organization carried out work on completion, retrofitting, modernization and reconstruction, then the costs of such work must be documented with the appropriate documents. Namely:
- the change in the initial cost must be recorded in the inventory card according to form No. OS-6 or form No. OS-6a (approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7);
- work acceptance certificate (if the work was carried out by a third party);
- act of acceptance of work performed (form No. KS-2) and a certificate of the cost of work performed and expenses (form KS-3) (approved by Resolution of the State Statistics Committee of Russia dated November 11, 1999 No. 100);
- costings;
- order from the manager to carry out work.
When carrying out repairs, the documents that must be completed are:
- defective statement. Paragraph 69 of the Guidelines notes that it must be compiled if a reserve is created for the repair of fixed assets. However, in order to avoid disagreements with tax inspectors, we recommend drawing up the specified document when carrying out repairs, since it indicates that the fixed asset has defects that need to be removed. There is no unified form of the defective statement, so the company needs to develop it independently with mandatory reflection in the annex to the accounting policy. As a rule, in order to draw up “your own” defective list, the basis is the act of identified equipment defects in form No. OS-16 (approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7);
- order from the manager to carry out repairs. It usually indicates by whom the repairs will be carried out (in-house or contracted), the composition of the commission for organizing the repairs, the timing of its implementation and other necessary information;
- act of acceptance and delivery of repaired, reconstructed, modernized fixed assets in form No. OS-3 (approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7);
When carrying out repairs in an economic way, you need to issue an invoice for the temporary movement of fixed assets in form No. OS-2.
- inventory card in form No. OS-6 or form No. OS-6a (approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7);
- costings.
As you can see, the list of documents is the same both for reconstruction, modernization, completion, additional equipment, and for repairs. When filling out these documents, the accountant, first of all, needs to ensure that, for example, the concept of “reconstruction” is not replaced by the word “repair”. Because tax authorities very often try to replace repair work with reconstruction.
Yu.L. Ternovka, expert
