1) based on the current market value of the market value;
2) based on the price at which similar goods are purchased in comparable circumstances;
3) based on insurance costs;
4) at the cost of their acquisition.
TOPIC 12. The essence and procedure for accounting for settlements with personnel for wages
After studying the topic, you will learn:
The essence and forms of remuneration in enterprises
What deductions are made from wages and their accounting
The order of synthetic and analytical accounting settlements with personnel for wages
How to create a reserve for vacation pay
The procedure for recording settlements with social insurance and security authorities
12.1. Organization of remuneration
Remuneration is a system of relations related to ensuring that the employer establishes and makes payments to employees for their work in accordance with laws, other regulations, collective agreements, agreements, local regulations and employment contracts.
Salaries are paid in cash in foreign currency Russian Federation(in rubles). In accordance with a collective agreement or an employment contract, upon a written application from an employee, remuneration is possible in other forms that do not contradict the legislation of the Russian Federation and international treaties of the Russian Federation.
The accounting department carries out calculations related to remuneration on the basis of standard primary documents for recording the number of personnel, production and use of working time. Primary documents are drawn up in departments (departments, workshops, sections, teams) by officials according to the document flow schedule and transferred to the accounting department, where, on the basis of these documents, the wages of each employee are calculated, the accrued wage fund is determined for individual structural divisions and the organization as a whole.
To record personnel, hours worked, settlements with employees for the calculation and payment of wages, the organization uses unified forms of primary documents: order (instruction) on hiring an employee; employee personal card; order (instruction) to transfer the employee to another job; order (instruction) on granting leave; order (instruction) to terminate employment contract(contract); time sheet and payroll calculation sheet; time sheet (used when automated processing data).
To account for production they are used various shapes primary documents: orders for piecework, route maps (sheets), records of work performed, etc. The output accounting system depends on the organization of production and labor standards, features of production technology, organization and remuneration of labor, production security measuring instruments etc.
At time wages wages are calculated depending on the amount of time worked and the tariff rate. Rates are set hourly and daily. Their size is determined qualification category, assigned to the worker. There are simple time-based and time-bonus wage systems. With a simple time-based system, a worker's earnings are calculated by multiplying the tariff rate by the amount of time worked.
At piecework wages workers' wages are calculated for work actually performed (manufactured products) based on current prices. The piecework form of remuneration has several varieties: direct piecework, piecework-progressive, indirect and piecework-bonus.
In a number of cases, at the discretion of the administration, remuneration for all or some workers may be made on the basis salaries. Possible use tariff-free wage system, in which the individual wages of a worker represent his share in the wage fund earned by the entire collective, determined on the basis of a constant coefficient assigned to the worker, reflecting the level of his labor participation in the activities of the organization.
The amounts of remuneration for heads of organizations, their deputies and chief accountants are determined by agreement of the parties to the employment contract.
The work of managers, specialists and employees, as a rule, is paid on the basis of official salaries. The salary is determined by the position held and the qualifications of the employee.
The specific amounts of the increase are established by the employer (taking into account the opinion of the representative body of employees), the collective agreement, and the employment contract.
Employees are provided annual holidays while maintaining the place of work (position) and average earnings. Annual basic paid leave is provided to employees for 28 calendar days.
The employee may also be granted additional annual paid leave. Such leave is provided to persons employed in jobs with harmful and dangerous conditions, performing work of a special nature, workers with irregular working hours, persons working in the Far North and equivalent areas, as well as in other cases provided for by law.
The average daily earnings for vacation pay are calculated for the last twelve calendar months by dividing the amount of accrued wages by 12 and by 29.4 (the average monthly number of calendar days). The average daily earnings to pay for vacations provided in working days are determined by dividing the amount of accrued wages by the number of working days according to the calendar of a six-day working week.
The collective agreement may also provide for other periods for calculating average wages, if this does not worsen the situation of employees.
12.2. Salary deductions
In accordance with current labor legislation, mandatory deductions are made from the amounts of accrued wages: income taxes individuals; fines by decisions of judicial and administrative authorities; alimony based on court verdicts, etc. At the initiative of the administration, deductions can be made for marriages committed by an employee, accountable amounts not returned in a timely manner, etc. At the initiative of employees, loans received, transfers to non-state organizations can be withheld pension funds etc.
Personal income tax is paid by individuals on the wages, remunerations, bonuses and other income of a labor and non-labor nature they receive. To calculate the amount of tax, the tax base is determined as the total amount of income received for the reporting period that is a taxable period on an accrual basis from the beginning of the calendar year. The tax base is calculated for each tax rate separately.
Some income paid to individuals is not taxed (state benefits, pensions, etc.) and is not included in the tax base.
The tax is calculated and withheld by organizations (tax agents) in which individuals received income. The calculated and withheld tax must be transferred by the tax agent to the budget Not later in the day receiving from the bank cash for the payment of income to individuals (salaries, remuneration, dividends, etc.).
Payment of tax at the expense of organizations (tax agent) is not allowed. The tax should be in mandatory withheld from the income of the individual himself. In accordance with the requirements of the Tax Code of the Russian Federation, organizations (tax agents) are required to maintain information for each employee tax card for accounting income and personal income tax.
The cards refer to all employees: full-time, non-staff, temporary, seasonal, as well as persons performing work under civil contracts and receiving royalties. The cards are filled out on the basis of data from personal accounts of employees, payroll and settlement statements, primary documents that served as the basis for accrual of relevant income and expenses incurred, and provide information about all types of income for tax purposes. You must also fill out certificate of income of an individual, submitted by organizations at the end of the year to the tax office.
Accounting for calculations of personal income tax is organized on account 68 “Calculations for taxes and fees”, to which a special sub-account is opened.
From the amounts of accrued wages, at the initiative of the organization's administration, the debt of employees for material damage caused, unreturned accountable amounts, etc. can be withheld. To record these transactions, account 73 “Settlements with personnel for other operations”, subaccount 2 “Settlements for compensation of material damage” is used.
At the employee’s initiative, loans are returned from accrued wages, which are accounted for in account 73 “Settlements with personnel for other operations,” subaccount 1 “Settlements for loans provided.”
From the wages accrued to the employee, deductions are also made on writs of execution of judicial authorities in favor of other persons, etc. Such settlement transactions are recorded in account 76 “Settlements with various debtors and creditors”, to which a special sub-account is opened.
12.3. Synthetic and analytical accounting of wage calculations
When organizing wage accounting and reflecting relevant transactions in accounts accounting it is necessary to separate payments included in the cost of products (works, services) and payments reimbursed from other sources.
The cost of production includes the cost of remunerating workers employed in the production sector - manufacturing products, performing work - or servicing production. An organization may make payments that are not included in the cost of products (works, services), but are reimbursed from the social insurance fund, retained earnings, targeted financing, etc. Payments from these sources are compensatory or incentive in nature. These include temporary disability benefits paid from the social insurance fund; bonuses paid from the reserve fund and targeted revenues; financial assistance; payment to employees of vacations additionally provided under the collective agreement, etc.
Organizations maintain synthetic accounting of wage settlements on account 70 “Payroll settlements with personnel”, in the development of which corresponding sub-accounts can be opened. On the credit side, account 70 reflects the amounts of accrued wages, bonuses, temporary disability benefits, on the debit side payments to employees, amounts of withheld tax, advances not returned by accountable persons in a timely manner, amounts for material damage caused, defects, in repayment of debt on loans issued, on executive orders. documents in favor of various legal entities and individuals.
When paying wages according to pay slips or cash orders, the following entry is made in accounting:
Debit 70 Credit 50 - wages were paid to the employee from the cash register.
When paying wages to employees through a current account, the following entry is created in accounting:
Debit 70 Credit 51 - wages were paid to the employee from the current account.
When depositing wages, the following entry is made in accounting:
Debit 70 Credit 76 subaccount “Settlements on deposited amounts” - reflects the deposit of the amount of unpaid wages;
Debit 51 Credit 50 - the deposited amount of cash was deposited into the current account;
Debit 50 Credit 51 - reflects the debiting of funds from the bank account and their receipt at the organization's cash desk;
Debit 76 subaccount “Calculations for deposited amounts” Credit 50 - deposited wages issued.
An organization can create reserves to pay for vacations, pay benefits for length of service and based on the results of work for the year.
Reserve for upcoming vacation pay (including insurance premiums on social insurance) the organization forms employees in order to evenly include expenses for paid vacations in the cost of production. To calculate contributions to the reserve, information about the annual wage fund and the amount of planned vacation pay is used. Contributions to the reserve are calculated as a percentage of accrued wages. When employees go on vacation, the reserve is reduced by the amount of pay accrued to them. For vacations not used by the end of the year, the reserve is transferred to the next year.
Accounting for the formation and use of the reserve is kept in account 96 “Reserves for future expenses”, subaccount “Reserve for future payment of vacations”. The credit of account 96 reflects the creation of the reserve, the debit - its use; the balance can only be a credit balance.
The formation of reserves for vacation pay, payment of benefits for length of service and based on the results of work for the year must be provided for in the administrative document on the organization’s accounting policy for the coming year.
To summarize data for each employee, workshop, department and organization as a whole on accrued wages, deductions made, deductions and payments, the state of wage settlements, the accounting department maintains the following accounting registers.
Personal account is an analytical accounting register and is filled out for each employee of the organization. It reflects calculations for wages and other charges in favor of the employee. A personal account is opened on the basis of an employment order (instruction). A personal account is opened for a year. At the end of the year, the personal account is closed and a new one is opened the following year.
Based on personal account data, a settlement or payroll statement is filled out; determined average earnings; pensions are calculated. The shelf life of personal accounts is 75 years.
IN payslip calculations of wages with the personnel of a department or organization as a whole are reflected. The payroll is a journal consisting of main and loose sheets. The number of loose-leaf sheets depends on the period for which the magazine is designed (quarter, half-year, year).
Payroll is filled out based on payslip data and is used to pay wages. The payroll indicates personnel numbers, surnames, initials of employees and amounts receivable. At the end of the pay period, the amounts of paid and deposited wages are indicated in the payroll.
Personal account, payroll and payroll are used in large organizations. In small organizations it is recommended to form payroll, where the accrual and payment of wages will be shown.
Summary statement for settlements with personnel for wages, summarizes the data of all payroll (settlement) statements compiled for the reporting month in the organization, and is used when reflecting accrued wages, bonuses, benefits, deductions, transfers and payments in the accounting accounts.
The data in the summary sheet is compared with entries in the General Ledger under account 70 “Settlements with personnel for remuneration”, and thus synthetic and analytical accounting for calculations for remuneration is reconciled.
Money to pay wages, temporary disability benefits, bonuses and other payments is received from the bank.
Salaries are paid at least every half month per day, established by rules internal labor regulations of the organization, a collective or employment contract, directly to the employee, except in cases where a different method of payment is provided for by law or the employment contract.
Vacation is paid no later than three days before it starts.
Upon termination of the employment contract, all amounts due to the employee from the employer are paid on the day the employee is dismissed. If the employee did not work on the day of dismissal, then the corresponding amounts must be paid no later than the next day after the dismissed employee submits a request for payment.
Upon expiration of the issuance period, the cashier makes a note “Deposited” in the payroll (settlement and payment) sheet against the names of persons who have not received wages in the “Receipt Receipt” column. The statement indicates in words the amounts issued and deposited. The accountant issues an expense account for the amount issued according to the salary slip. cash order, is registered in the registration book, transferred to the cash desk and reflected in the cash book.
Wages not paid on time are deposited, and the money is transferred to the bank into the organization’s current account. They are received from the bank when the employee contacts the accounting department. The employee has the right to receive the deposited salary for three years. After this period, unclaimed amounts are included in the organization’s other income.
The cashier enters the amounts not issued according to the payment (settlement and payment) sheet into the register of unpaid wages and transfers it to the accountant. In accounting, accounting of settlements with depositors is kept in the book of deposited wages. Accounting for settlements with depositors is kept on account 76 “Settlements with various debtors and creditors”, subaccount 4 “Settlements for deposited amounts”. The credit of account 76 reflects the crediting of the undisbursed amount to the depositor, and the debit indicates its issuance.
Currently, accounting employees of organizations of all forms of ownership strive to properly maintain accounting records and avoid errors and violations. Such a section of accounting as fixed assets is no exception. An important point here is a true reflection of their value, both in accounting and reporting. This article will tell you what methods exist to determine the value of fixed assets.
What is the main tool?
By “fixed assets” we mean assets that take part in production and management processes. Distinctive Features such assets are:
- Their period of use is more than one year;
- They are aimed at increasing income;
- They transfer their cost to finished goods gradually, every month, by calculating depreciation.
The above features distinguish fixed assets from other types of assets.
What is an assessment?
Valuation of fixed assets in accounting means determining the quantity and cost of objects.
In order to determine the value of such assets, valuation is used, and in order to determine their quantity, natural valuation is used.
Valuation of fixed assets is widely used in the process of calculating depreciation, in reporting, in analyzing financial and economic activity company and for other administrative or economic purposes.
Ways to carry out assessment
Valuation in kind is used to determine the quantitative composition of objects and other various technical characteristics.
Valuation is designed to calculate various economic indicators, to calculate depreciation charges and other information. In turn, valuation can be divided into the following types:
- Primary assessment - calculated by summing up all costs aimed at the process of purchasing, delivering, installing or creating a fixed asset item. It is at the primary cost that objects are placed on accounting records;
- Restoration assessment - determined by revaluation of fixed assets. Revaluation is carried out by multiplying the primary value by a special indicator. This indicator shows how many times the value of the object would increase if it were valued at prices valid at the time of revaluation. This indicator, if the cost of the product has increased, will be more than one. If, on the contrary, the value at current prices is lower than the primary value, then the indicator will be less than one. Such a revaluation procedure is carried out either by decision of the company itself or by decision of the Government of the Russian Federation;
- Depreciable valuation - is the amount of depreciation that must be transferred to the cost of finished goods. Calculated using one of the methods for calculating the amount of depreciation charges (linear, based on the sum of the numbers of years useful application, reducing balance, directly proportional to the quantity of manufactured products). The method for calculating depreciation for each object is determined by the company independently, guided by the type, scope of application of the product, as well as various legal acts and recommendations. The choice made is reflected in the company's accounting policies;
- Residual valuation - this value is calculated by the difference between the primary value and the accumulated amount of depreciation. In this case, the amount of deductions (depreciation) must be determined based on the chosen method of calculating depreciation (linear, based on the sum of the number of years of useful use, reducing balance, directly proportional to the number of manufactured products). Exactly according to residual value fixed assets are reflected in the company's reporting (namely, in the balance sheet).
In addition, in addition to the above basic methods of assessing fixed assets, other additional varieties are sometimes used. For example:
- Market valuation – considered equal to the possible sale price of the property;
- Insurance assessment - determined provided that the object is insured, based on the amount that will be paid to the owner of the object upon the occurrence of an insured event;
- Liquidation valuation - represents the value for which an object is sold at the time when the organization is at the stage of bankruptcy.
Depending on the current production and economic situations in the company, other types of valuation of fixed assets may be used.
Currently, for accounting purposes, the following methods are used to estimate the cost of inventory:
- at the cost of each unit;
- at average cost;
- at the cost of the first acquisition of inventories (FIFO method).
For purposes tax accounting An organization may use the following methods for assessing inventories upon disposal:
- valuation method based on the cost of a unit of inventory;
- average cost valuation method
- valuation method based on the cost of first acquisitions (FIFO);
- valuation method based on the cost of recent acquisitions (LIFO).
- when determining the amount of material costs when writing off raw materials and materials used in the production (manufacturing) of goods (performing work, providing services), the methods are enshrined in paragraph 8 of Article 254 of the Tax Code of the Russian Federation;
- When selling purchased goods, the methods are enshrined in clause 3, clause 1 of Art. 268 Tax Code of the Russian Federation;
- When selling or otherwise disposing of securities, the methods are enshrined in clause 9 of Art. 280 Tax Code of the Russian Federation.
This is explained by the desire to bring domestic accounting standards closer to international ones. However, for tax purposes, four methods of valuing inventories are still used.
Let us briefly describe each of the methods.
At the cost of each unit Inventory materials used by the organization in a special manner are assessed ( precious metals, gems etc.), or supplies that cannot normally be replaced with each other. This method is used in exceptional cases or with a small range of inventory items. It is characterized by particular labor intensity, provided that it is used in enterprises with a large product range.
For example.
The company produces cabinet furniture. The balance at the beginning of the stained glass month is 5 sheets in the amount of 125,000.00 rubles.
During the month, the following was purchased: 3 sheets of stained glass for the amount of 84,000.00 rubles.
Transportation costs are included in the cost and amount to 3,000 rubles.
Within a month, 2 sheets from the remainder were used, 1 sheet from the supply of stained glass.
Let's determine the actual cost of the remainder: 125,000 / 5 = 25,000 rubles per sheet;
Let's determine the actual cost of receipt: (84,000 + 3,000) / 3 = 29,000.00 rubles per sheet;
The cost of raw materials consumed in the production process per month will be: 25,000 * 2 + 29,000 = 79,000 rubles.
As the example shows, when using this method there is no need to make additional calculations. If it is possible to accurately determine which materials are used in production, the use of this method has advantages, since materials are written off at their real cost, without deviations.
Average cost calculation is made by dividing the total cost of a group (type) of inventory by its quantity, which consists of the cost and the amount of balance at the beginning of the month and the inventory received during the month. This method is the most common and is included in standard versions of accounting programs.
For example, an organization is engaged in the production of cabinet furniture. The balance of chipboard at the beginning of the month is 300 sheets in the amount of 600,000.00 rubles.
During the month, receipts were made in several batches, including:
- 100 sheets in the amount of 180,000.00 rubles;
- 50 sheets in the amount of 105,000.00 rubles.
Let's calculate the average cost of one sheet of chipboard: (600,000 + 180,000 + 105,000) / (300 + 100 + 50) = 885,000 / 450 = 1,966.67 rubles per sheet.
Let's calculate the cost of chipboard written off for production: 410 * 1,966.67 = 806,334.70 rubles.
The balance of chipboard at the end of the month will be 300 + 150 - 410 = 40 sheets in the amount of 40 * 1,966.67 = 78,666.80 rubles.
P using the FIFO method Inventories that are the first to enter production (sale) are valued at the cost of inventories that were first acquired in time, taking into account the cost of inventories listed at the beginning of the month. Thus, the sequence of write-offs when applying this method is as follows: first, balances at the beginning of the period are written off, then the first batch, then in order. Otherwise, this method can be called a conveyor method. In conditions of rising prices for purchased materials, the cost of purchased products is minimal, while the assessment of inventories and profits is maximum. And when prices fall, on the contrary, inventories and profits are minimized.
When using the FIFO method when calculating the cost of materials released into production, you can use one of the following methods:
The first method is based on writing off the cost of each batch in order: first, the cost of the balance is written off, if the amount of materials written off is greater than the balance, the first batch received is written off, then the second and subsequent ones. The balance of materials is determined by subtracting the cost of written-off materials from total cost materials received for the month (taking into account the balance at the beginning of the month).
The second method is based on determining the balance of materials at the end of the month at the price of the most recent purchase. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).
Using the conditions of the previous example, we will calculate using the FIFO method using two options.
Option 1:
Written off for production:
300 sheets in the amount of 600,000.00 rubles; 100 sheets in the amount of 180,000.00 rubles; 10 sheets worth 21,000.00 rubles. Total: 801,000.00 rubles. The balance at the end of the month is 40 sheets in the amount of 84,000.00 rubles.
Option 2:
The balance of chipboard at the end of the month is 40 sheets (300 + 150 - 410), the entire balance from the second batch. Accordingly, the cost of the balance is: 84,000.00 rubles;
Let's calculate the cost of written-off chipboard: 600,000 + 180,000 + 105,000 - 84,000 = 801,000.00
The average cost of one sheet of chipboard written off for production is 801,000 / 410 = 1,953.66 rubles per sheet.
With the LIFO method Inventories that are the first to enter production (sale) are valued at the cost of the last in the acquisition sequence. The LIFO method is the opposite of the FIFO method. In conditions of rising prices - a minimum estimate of reserves and profits. In conditions of falling prices - maximizing inventory valuation and profit.
There are two ways to calculate the cost of materials released into production using the LIFO method. The methods are similar to those above for the FIFO method, with the difference that for the first calculation option the cost of the last received batch is used, then the batches are written off in reverse order. The cost of the earliest purchased batch is used to determine the closing balance. For brevity, we will use the last method of calculation.
The conditions of the example are the same.
The balance of chipboard at the end of the month is transferred from the balance at the beginning of the month, since 410 sheets of chipboard were used for production, of which 50 sheets were from the last batch, 100 sheets from the first batch, 260 sheets from the balance at the beginning of the month.
So, the balance will be 40 sheets at a price of 2000 rubles per sheet, in the amount of 80,000.00 rubles.
Let's determine the cost of chipboard used for production: 600,000 + 180,000 + 105,000 - 80,000 = 805,000.00
The average cost of 1 sheet of chipboard written off for production is 1963.41 rubles.
Let us make a reservation that in practice there are two options for using methods of average estimates of the actual cost of inventory items when released into production or written off for other purposes:
The first involves a weighted assessment based on the average monthly actual cost; in this case, the calculation includes the quantity and cost of materials at the beginning of the month and all receipts for the month (reporting period).
The second method is based on determining the actual cost of the material at the time of its release (rolling estimate); in this case, the average estimate is calculated based on the quantity and cost of materials at the beginning of the month and all receipts until the time of release.
Thus, the choice of the date on which the inventory is assessed determines the difference between the weighted and rolling assessment.
The use of a rolling assessment must be economically justified and supported by appropriate computer technology.
Options for calculating average estimates of the actual cost of materials for accounting and tax accounting purposes should be disclosed in the organization’s accounting policies.
Let's compare the results:
| Indicator | Average cost method | FIFO method | LIFO method |
| Written off for production (RUB) | 806 334,70 | 801 000,00 | 805 000,00 |
| Average cost of items written off in production (RUB) | 1 966,67 | 1953,66 | 1963,41 |
| Balance at the end of the month (RUB) | 78 666,80 | 84 000,00 | 80 000,00 |
| Average cost of materials in balance | 1 966,67 | 2 100,00 | 2 000,00 |
In the example given, there is no clear tendency for the values obtained to differ when using in various ways estimates of inventories, since the conditions of the example provide for fluctuations in the purchase price of materials. So the cost of the balance at the beginning is 2,000.00 rubles, in reporting period materials were purchased at prices of 1,800.00 and 2,100.00 rubles.
Subject to a steady increase in prices, the most profitable, undoubtedly, is the LIFO method, since the cost of written-off inventory items increases, and profit, accordingly, decreases. When prices decline, the exact opposite pattern occurs when applying the FIFO method. To avoid jumps, accountants, as a rule, choose the method of writing off inventories at average cost for both accounting and tax purposes. This method is time-tested and does not cause difficulties in calculations, and also gives average indicators for any changes in prices on the market.
To make the right management decisions in the field of inventory management, there is a need to choose a method for assessing inventories for accounting purposes.
For tax purposes, one or another method of assessing materials is used to optimize taxation, in particular to reduce income tax payments, provided that the method that provides for write-off for reduction is chosen. tax base maximum possible expenses.
Consequences of using different methods of inventory valuation for accounting and tax purposes.
How to take into account the differences that arise when using different methods of valuing inventories for accounting and tax purposes. In this case, it becomes necessary to apply the requirements of PBU 18/02.
So the organization uses different methods valuation of inventories for accounting and tax purposes. What differences arise?
If the amount of expenses reflected in the accounting records exceeds the amount of expenses accepted for taxation, a deductible temporary difference arises, and, as a consequence, a deferred tax asset (DTA). If the amount of expenses reflected in the accounting records is less than the amount of expenses accepted for calculating income tax, a taxable temporary difference arises, and, as a result, a deferred tax liability. Let's look at how differences arise based on our example data.
When calculating by the average cost method, the amount attributable to the cost is 806,334.70 rubles, with the FIFO method - 801,000.00 rubles, with the LIFO method 805,000.00 rubles.
| Applicable assessment of the MPZ for the purposes | Differences that arise | SHE/IT | |
| Accounting | Taxation | ||
| At average cost 806 334,70 | Using the FIFO method 801 000,00 | Deductible temporary difference | SHE |
| At average cost 806 334,70 | Using the LIFO method 805 000,00 | Deductible temporary difference | SHE |
| Using the FIFO method 801 000,00 | At average cost 806 334,70 | IT | |
| Using the FIFO method 801 000,00 | Using the LIFO method 805 000,00 | Taxable temporary difference | IT |
The optimal method for assessing inventories for tax accounting purposes in organizations using a simplified taxation system is the FIFO method, since the method of assessing inventories at average cost for the purposes of tax accounting of expenses under the simplified tax system does not allow compliance with the requirements of Art. 346.17 of the Tax Code of the Russian Federation, regarding control of payment of expenses. At the same time, the organization retains the opportunity to keep track of inventories “on average” in accounting.
Of course, the emergence of differences between accounting and tax accounting leads to a complication of the accounting process, as a consequence to more errors. However, market conditions, the presence of multiple approaches of users of financial statements (for example, it is beneficial for an organization to show profit in order to pay dividends in larger size) and recent changes in legislation increase the number of situations where these differences arise. In addition, if the range of materials (goods) is small and the accountant has the option of batch accounting, you should think about whether the weighted average valuation method is convenient and practical from a tax point of view.
If you are serious about getting into trading, you will have to choose which costing method to use. Such a seemingly simple question - how to write off sold goods - can seriously affect how your trade will develop. In this material we will consider all permitted by law cost calculation methods, we will evaluate the advantages of each, and also tell you when it is better to use which one.
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The law allows three methods of assessment and calculation - by the cost of each unit of goods, by the average cost and by the FIFO method (English: “first in, first out”). Each of them will give different indicators for business profitability, and therefore for tax and management accounting. Let's figure out what the difference is.
At the cost of each unitAs the name implies, this method assumes that the cost of each specific product is taken into account in the calculations. This system is used when trading unique and expensive goods, when accuracy is important. For example, it is suitable for those who will sell cars, art or jewelry. It is logical that when a product is piecemeal, and one cannot easily replace another, exactly the price at which it was delivered is entered into accounting when writing off inventory items. This method also assumes that it is always clear from which specific delivery the goods sold came from.
Average cost method
It is used more often than the previous one, and involves monthly calculation of the cost of goods using the arithmetic average. In this case, it does not matter from which specific delivery this or that product “left”. This method of writing off inventory items is suitable for companies selling products for which piece accounting is not important. This could be, for example, stationery, clothing, shoes, toys, cosmetics and any other consumer goods. The average cost method is especially beneficial for those goods for which the price is constantly changing, both up and down.
This method is the easiest to account for. The average cost of goods is calculated using the following formula:
[average cost of inventory items] = ([cost of inventory items at the beginning of the month] + [cost of inventory items received during the month]) / ([number of inventory items at the beginning of the month] + [number of inventory items received during the month])
And the cost of inventory written off per month is calculated as follows:
[cost of written-off inventory items] = [average cost of inventory items] X [number of inventory items sold per month]
Example of calculation using the average cost methodAt the beginning of the month, the Stationery store had 370 ballpoint pens left at a purchase price of 10 rubles. Within a month, another 1000 pens were delivered in two batches - 500 for 9 rubles 50 kopecks and 500 for 9 rubles. We calculate the average cost.
Cost of inventory items at the beginning of the month: 370 X 10 = 3700 (rub.)
Cost of the 1st new supply of goods and materials: 500 X 9.5 = 4750 (rub.)
Cost of the 2nd new supply of goods and materials: 500 X 9 = 4500 (rub.)
Average cost of inventory items: (3700 + 4750 + 4500) : (370 + 1000) = 9.45 (rub.)
1100 X 15 – 1100 X 9.45 = 6105 (rub.)
The advantages of the average cost calculation method are the stability of the price of materials sold and simplicity. However, from a tax accounting point of view, it is not optimal in the case where, for example, you purchase the same pens from the same supplier, and he gradually reduces your prices. Let's consider the following option.
FIFO method. Calculation example
This is the most popular cost calculation method. It uses the queuing principle. It is assumed that the items that were delivered first are written off first. Hence the name of the FIFO method (English: “first in, first out” - “first in, first out”). However, unless the shelf life is important, it is not necessary to ship goods from an earlier delivery first - this is used as an assumption in the calculations. That is, the cost of goods that are sold first is calculated at the price of the balances from the “oldest” delivery. When the balances are quantitatively exhausted, inventory items are written off at the price of the next delivery, then the next one, and so on.
Example of calculation using the FIFO method
Let’s take our “Stationery” store with ballpoint pens and exactly the same situation as above. We have 370 ballpoint pens for 10 rubles and are supplied in two batches of 500 pens - first for 9 rubles 50 kopecks, then for 9 rubles. 1100 pens sold for 15 rubles. We count the profit.
The first to go will be 370 pens for 10 rubles - that's 3,700 rubles. Next, 500 pens cost 9.5 rubles each, which is another 4,750. There are 230 pens left, each priced at 9 rubles, which is 2,070 rubles.
1100 X 15 – (3700 + 4750 + 2070) = 5980 (rub.)
As can be seen from the example of calculation using the FIFO method, the profit indicator in this case is lower than in the example with average cost. Accordingly, income tax will be less.
FIFO or average cost - which is better?
Both of these methods work quite well. However, FIFO is considered more accurate than the average cost method. It is especially beneficial in terms of taxes if the price of the goods you purchase is constantly decreasing. Then the cost of the written-off goods will be the greatest, and the balance will be the minimum. Therefore, the answer to the question is, Which is better, FIFO or average cost, in most cases there will be the first option.
FIFO method in warehouse program
Despite the fact that the FIFO method is quite simple in terms of understanding the principle of its operation, manually calculating the cost each time is very labor-intensive. Especially if you have small business, and you yourself are the director, the cashier, the accountant, and the chief buyer. It is much easier if you simply enter data on deliveries and sales and immediately get the result. This is exactly how you can work with the MyWarehouse service. The program fully automates trading processes and itself calculates the cost of written-off goods using the FIFO method. MyWarehouse calculates profitability for each product or product group, stores and displays current and historical balances, as well as many other data that may be useful. This way, you save time and can be confident in the accuracy of the indicators on which you make decisions.
Company accounting policyAccording to the law, the organization itself chooses how to calculate the cost of goods. It is important that the method you consider is necessarily reflected in the company's accounting policies. This is stated in Article 313 of the Tax Code of the Russian Federation, as well as in paragraph 73 of the Methodological Instructions approved by Order of the Ministry of Finance of Russia dated October 28, 2001 No. 119n.
Changes to accounting policies can be made once a year. That is, you can deposit them earlier, but they will take effect according to the law next year - at the beginning of the new tax period. The accounting policy is drawn up by an accountant and approved by the head of the organization.
For management accounting purposes, you are free to use any costing method. Our advice is to use the same one that is written down in your accounting policy - this way there will be less confusion.
