Accounting and write-off of accounts payable

Accounting for accounts payable has many nuances. Thus, the amount of debt for which the statute of limitations for claims has expired is accounted for as financial results and refers to non-operating income.

In this regard, it is necessary to timely write-off of accounts payable, since the failure of the operation in time can be considered by the tax authorities as a concealment or non-accounting of non-operating income of the company. However, judiciary practice shows that tax officers still have to prove that such indebtedness for loans with expired limitation period exists, and this causes the company to understate the taxable profit. Otherwise, the court in the suit can refuse.

Write-off of accounts payable, as well as unclaimed depositary, on which the statute of limitations expired, are performed in accordance with the Accounting Regulations, p.78. It states that the amounts of accounts payable and accounts payable with retired periods of limitation are subject to write-off based on the information that appeared as a result of the inventory, the order and the written justification of the manager. In non-profit organizations, these amounts go to increase the income, for commercial companies they are referred to financial results.

Inventory is mandatory before the accountability for the year is compiled. The inventory commission, when reviewing accounts payable and receivable by checking the documentation, establishes the validity and correctness of the amounts of arrears found, including those that have expired statute of limitations on the claim.

Write-off of accounts payable: entries

These funds, including VAT, are included in other income that is recognized in the reporting period when the statute of limitations occurred. In accounting, this operation is secured by the posting of debit 60 accounts and loans 91. The amount of debt that has expired statute of limitations is added to other income.

In some cases , the limitation period may be interrupted for a certain period and then proceed. This happens in cases of the creditor's appeal to the court, and when recognizing his debt obligations as a debtor. The company needs to show that it recognizes its debt. The actions that are taken to interrupt the statute of limitations for the claim and which testify to the recognition of a debt include the following:

- partial payment of the debt under the main contract, as well as the amounts of sanctions, including partial recognition of various claims for payment of debt, if it has only one basis, and not obtained their various bases;

- recognition of the claim;

- payment of principal interest;

- acceptance of collection orders;

- the change by an authorized person of a contract, from which recognition by the debtor follows, and also if a request for this modification of the contract (about installment or deferred payment) is requested from it .

In cases where the company once every three years recognizes its debt in writing, there will be an extension of the statute of limitations, and no write-off of accounts payable will be required.

When the statute of limitations is interrupted, the accounts payable are not written off, and, therefore, the taxpayers do not have an extra-sales tax income.

So, for example, one company purchased from another goods. For example, on November 15, 2010, the recipient asked the supplier for a deferred payment. As a result, the parties concluded an additional agreement on the execution of settlements for goods before January 15, 2011. In such a case, the statute of limitations is interrupted, and a new countdown will occur from 2.01.2011.

The existing accounts payable can be terminated if the obligation is fulfilled both by the debtor himself and by an authorized third party.