"Expenses of future periods": what does it concern them? Posting and writing off future expenses

In 2011, accounting legislation was changed. Adjustments, in particular, concerned the reflection of expenses that arose in one period, but related to several financial cycles. Such costs are called BPO. Next, we'll look at how future expenses are taken into account, what is relevant to them.

Normative base

The financial statements of the new form were approved by the Order of the Ministry of Finance 66n. From it, a line was recorded that fixes the expenses of future periods (stocks). After that, the following Order 186n was amended in paragraph 65 of the PBU. In the new edition, this document contains provisions on how future expenses are recorded, which is relevant to them at the present time. Thus, the costs incurred by the organization in the reporting cycle, but relating to the following, are included in the balance sheet under the conditions for recognizing the assets. Deferral of future expenses is carried out in accordance with the general rules for the retirement of this type of funds.

The concept of accounting

In accordance with clause 8.3 of the CBU, an asset in the domestic market economy is recognized as such if it is probable that future profits will be received from this facility. At the same time, its cost can be measured with a sufficient level of reliability. In paragraph 7.2 of the Concept, it is stated that the assets are assets that have come under the control of the enterprise as a result of entrepreneurial activity, and which can bring profit to it in future periods. The forthcoming economic benefits provide for the potential possibility of assets indirectly or directly contribute to the flow of funds. It is generally accepted that funds can bring profit in the future if they:

1. Used alone or in combination with other means during the production of services, products or works intended for sale.
2. Exchange for other assets.
3. Distributed between the owners of the enterprise.

Classification

In accordance with the new edition of paragraph 65 of the PBU, certain types of future expenses should relate to certain assets. In some cases, it is difficult to classify. However, if the compliance of the expenditure with the overall definition of the asset is established, it can be considered as other non-current or other negotiable means in accordance with the term for the write-off. If the BPO is expected to be disposed of during the year, it is shown as current assets. If future deferred expenses are written off for a period exceeding 12 months, they are included in non-current assets.

The complexity of implementing the concept

The above situation caused certain difficulties for accountants. For example, the question arose as to how to distribute, if the payments to future periods include insurance payments. The fact is that they can not be included in the composition of any asset. To clarify the situation, the Ministry of Finance issued a letter. In accordance with it, determining the expenses of future periods (which refers to them in the current cycle and concerns the forthcoming ones), if they correspond to the conditions on which an asset is recognized, they are fixed in the balance in its composition and disposed in the order adopted for Of this category. In other cases, such costs are shown as a BPO. Their cancellation is effected through reasonable distribution between the financial periods according to the rules established in the organization (in proportion to the quantity of products, for example), during the period they are concerned with.

Opinion of specialists

Taking into account the above, it can be considered that the very procedure for recognizing and subsequently writing off expenses for future periods remains the same. Changes only touched on the rules for fixing the BPO in the balance sheet. In the opinion of experts, these adjustments specify how the expenses of future periods are shown, what is relevant to them. In particular, they should include only those costs that are actually those. Their description is contained in PBU 10/99 (in paragraphs 2 and 3). On the other hand, they should relate to future financial periods. In other words, there is and can be established a cycle during which the realized costs will bring the company economic profit.

Deferred expenses: account

When working with a cost item, it is necessary to clearly determine whether the asset has its own rules of disposal, or it is costs that are recognized as one-time. When performing operations, it is necessary to adhere to the established algorithm. First of all, it is necessary to check whether the current accounting standards foresee the method of uniform distribution of the analyzed costs. With a positive answer to this question, they remain on the sc. 97. Expenses of future periods in this case can be continued to be distributed. If the specified method is not provided, it is necessary to determine whether in the forthcoming financial cycles the income from these funds is possible. The possibility of transferring such expenses to the future is provided in PBU 10/99 (in paragraphs 9 and 19). In the case of a positive response, they should also be distributed.

Other costs

They are subject to either write-off or inclusion in advances issued. In the first case, it is necessary to verify compliance with all the conditions for recognizing costs, which are set in PBU 10/99 (on item 16). In particular, it is necessary to determine that:

1. Expenses can be realized under a specific contract, the requirement of law or other normative act, the custom of business turnover.
2. The amount of costs can be set.
3. There is a certainty that when a particular operation is carried out, the economic profit of the enterprise will decrease. In other words, the organization has transferred the asset or there is no uncertainty about its transfer.

If at least one of the specified conditions is not met, the issued advance (receivable) is recorded in the accounting. This provision also applies to the payment of work (services), when at the time of the transfer of funds it was not performed (not rendered). In this case, the contract can be terminated at any time with the requirement of full or partial refund. The remaining costs are included in the loss.

Cost Categories by Article

In accordance with the new rules, only certain expenses of future periods are distributed within a certain period of time. The account may contain:

1. One-time payments for the right to use the results of intellectual activity or means of individualization, which are paid under license agreements, commercial concession agreements and other similar documents with a fixed period of validity.
2. Discount on a bond or accrued interest.
3. Additional costs for loans and borrowings.
4. Accrued interest on the bill amount.
5. Costs incurred with respect to the forthcoming work under the contract of work. They include the cost of materials that were transferred to fulfill the terms of the agreement. This category includes rent, which is listed in the financial period, but refers to the upcoming cycles. Retirement of such costs is carried out in the manner specified in PBU 2/08 (in paragraphs 21 and 16).
6. The cost of raw materials, released for production, but related to future periods. This provision is valid if materials are used in preparatory work within the framework of seasonal production, during mining and preparatory activities in the development of new aggregates, workshops, enterprises (start-up costs), in the development of new technologies and products, in the process of land reclamation.

Errors

Often on sc. 97 fix:

1. R & D expenses . These future expenses are reflected in acc. 08 and are shown under an item on which other non-current assets are fixed. After the completion of the work, they are included in the invoices. 04 and are displayed under the article "Results of development and research".
2. Subscription costs for periodicals. These costs are included in the advance. The matter is that the enterprise at any time can refuse from reception of following numbers and to demand return of the paid sum.
3. Lease payments, which are listed at a time for the upcoming period. They should also be included in receivables, as services have not yet been provided.

To eliminate inaccuracies, an inventory of future expenses is required.

Inclusion into losses

Under the new rules, the current costs are:

1. Expenses under insurance contracts. These include, among other things, agreements on the protection of civil liability, property, CASCO and OSAGO, and so on. The paid amount of the premium (premium) on these acts is allowed to be taken into account at a time as part of expenses at the time of receipt of the policy (the commencement of the contract), since the special acts do not establish a special procedure for fixing them. The premium paid is not included in the advance because in the event of an organization's early termination of the contract, it will not be returned unless another condition is provided for in the agreement.
2. Vacation, moving to the next month, and contributions from these amounts. Uniform inclusion of these costs in accordance with the current PBU is not provided. Also they can not be considered advances, since their payment is carried out for the period worked.

1C: deferred expenses

At the request of users to sc. 76 was linked to the BPO Handbook. This is done for those cases when it became necessary to distribute the insurance evenly, but the user does not believe that it is included in future expenses. Postings in this case are carried out using the acc. 76:

• "Contributions (payments) for voluntary insurance in the event of damage to health or death" (76.01.2).
• Deductions for other categories of insurance (76.01.9).

Innovation

As one of the innovations related to the changes in the legislation described above, there is a props that indicate the type of asset. Its meaning is to establish that line of balance, which will include certain future expenses. Postings should be made simultaneously with filling this requisite for all BPMs that have a debit balance at the end of the financial cycle. If the specified information is absent, the costs are included in the remaining current assets in the balance sheet (line 1260). This props are not important for writing off and recording expenses. The amendments to the law also did not touch upon the procedure for recognizing and disposing of the LLP - it is the same in the program. This means that if there is a need to redefine the types of assets for the established expenditures of future periods in advance of the formation of financial statements, the values of the relevant details can be changed without re-entering either the receipt documents or the disposal operations of the specified costs.

Decoding sums on balance lines

This can be done using the appropriate button. It is located on the top command line of the report and is called "Decrypt". During the formation and automatic filling of the balance, the program allows you to determine the indicators. To verify the correctness of the type of asset in the BPO handbook, to analyze the way in which costs will be displayed in the balance sheet, you can apply the method of the standard accounting report "Subconcrete analysis". In this case, you must first configure it. This is done like this:

1. The sub-currency type should be used to determine the costs for future periods.
2. In the first grouping, the BPM, the type of asset, is indicated.
3. In the second grouping, actual expenses for future periods are established.

You can configure other report parameters as needed. The result is a picture that fully reflects the distribution of costs for future periods between balance assets. In this case, a transcript will be given for each LPO. In a similar way, you can configure the turnover balance sheet according to the invoice. 97.

Self-determination of the accounting procedure

This operation is allowed for expenses that are related to future periods and are not directly specified in the current PBU as a BPO. With the independent determination of the accounting procedure, the following options are possible:

1. Fixing on "costly" articles and a one-time write-off later on articles on accounting for profit from sales (p. 90) or other costs and incomes (p.91).
2. Reflection on the syn. 97 (BPO) with allocation to "costs" when the period in which they are included.

Another option is acceptable. It consists in the reflection of expenses on special sub-accounts of costs and subsequent inclusion in accounts that take into account the profit from sales (item 90) or other expenses and incomes. In this case, the requirement of PBU 10/99 (paragraph 19) will be observed. This requirement provides for the costs of the statement of losses and profits to be reflected by reasonably allocating them for financial periods in the event that costs cause income to be received over several cycles where it is not possible to clearly identify or only indirectly establish the relationship between costs and profit. It should be noted that the last two options can be the most convenient for the company. In these cases, it is possible to maximize the tax and accounting balance. The first is not a one-off, but a gradual write-off of costs that relate to the upcoming periods. Specific definition of a method of accounting and disposal is carried out within the financial policy of the organization. As the main criterion for the gradual, rather than a one-time distribution of those or other costs is the receipt of profit, which is associated with them not in the present, but in the forthcoming cycles.

VAT

As it was mentioned above, the amount of expenses for future periods is fixed at acc. 97. The "input VAT" relating to them is accepted for deduction according to the general procedure, after they are shown in the accounting, provided that these costs are necessary for carrying out activities that are taxed and if the supplier has an account -texture.