Assets and liabilities of an organization adjusted for estimated values. For receivables such as an indicator is a reserve of doubtful receivables – the balance sheet shows the amount of credit unpaid accumulated savings. This will prevent the overestimation of assets.
Since 2011, the creation of the provision for doubtful receivables is the responsibility of the organization (pursuant to paragraph 70 of the RF Accounting Regulation No. 34n).
Although in the Russian Federation Tax Law, this operation is registered as company law. However, if you believe that this amount should be included in tax costs, many businesses have the right to create reserves. How to do it correctly, what billing should be created and how this operation is displayed in “1C Accounting”, you will learn from this article.
The amounts ‘Accounting’ and ‘Tax’ because doubtful and bad debts are very different, so they need to be created separately for different purposes. In BU the company determines the calculation procedure itself. The RFU RF states that the amount of funds must be calculated using one of the following methods:
– separately for each debt, the company fixes the amount of PPA that will not be recovered and puts it in reserve;
– on the basis of information from previous periods: calculate the part of the outstanding amount over the past few years;
– proportional to the delay for each amount. A similar method is used in NU.
There is no doubt:
- DZ for the obligations of suppliers who have received an advance payment and for undelivered goods under the terms of the contract.
- Debt for penalties for failure to comply with the terms of the contract.
- Debt agreements and assignment of the right to a claim.
The selected option must be an enterprise policy in your account. Where management has decided to use the expert assessment method, the criteria for allocating debt to reserves should be clearly defined. You must set the percentage values in the proportional method.
It is important to consider the purpose of creating a reserve when choosing an option. The higher this amount, the higher the net asset value.
This should be minimal for “beautiful” reports. The legal requirements will thus be met and investors will not suffer. In BU, the provision for doubtful debts is reflected in the accounts. 63, analytical data is recorded separately for each debtor. Deductions from the reserve are shown under “Other expenses” (account 91-2).
Creation of provision for bad debts in NU
This settlement procedure is clearly outlined in Article 266.NK RF. It stipulates that the taxpayer may deduct/make deductions for any debt. The exception is interest on loans. The same article states that it is possible to create a provision for doubtful debts only on the basis of an inventory of DM at the end of the reporting period.
This operation should not be carried out before the obligation to pay taxes. The accounting policy should reflect the creation or abandonment of provisioning. This should be done before the beginning of the year. You cannot make any changes to the current date range.
The purpose of the inventory, in this case, is to determine the deadlines for repayment of the debt. Based on the calculations, the company determines the amount of the delay and then classifies it as hopeless (if the debtor was liquidated) or doubtful. In the first case, the debt should be written off at the expense of the created reserve and in the second – included in it. The Fund may only be used to cover the costs of bad debts.
These deductions apply to non-functional costs reducing the basis for calculating corporate income tax (IPA), ie only NPP payers can perform such operations. The amount of deductions shall be fixed for each debt:
- <90 days delay – 100%;
- 45-90 days – 50%;
- > 45 days – 0%.
In addition, if the amount of the debt is fully included in the reserve, it should not exceed 10% of the current period’s return.
At the end of the reporting period, the Company should create provisions for doubtful debts, ie amounts that are unlikely to be recovered. The methods of calculating these amounts in NU and BU are different. If management chooses to display amounts not only in statements but also in accounting policies, it will be necessary to make adjustments to the database manually.
It is important to understand the purpose of this reserve. The higher the amount of doubtful debt, the higher the net asset ratio. This is not always good for the “beautiful” statements that are submitted to the bank.