Provisions for liabilities - are the means which are shown in the accounting organization.The balances are designed for different purposes, are shown in the relevant article of the accounting document.The article "Provisions for liabilities" is contained in the section on current liabilities of the balance sheet.Admission and application, and for the previous fiscal year, as well as the remains of the beginning and end of a certain period are shown in the statement of changes in equity.
organization may create a reserve for future expenses.It may include funds directed to the following:
- annual payments for long service.
- holiday pay employees.
- Repair fixed production assets.
- Payment of incentives for the annual results.
- warranty service and repair.
- Preparatory work due to the seasonal type of activity of the enterprise.
- repair items which are intended for delivery to the use (rent) in accordance with the contract of hire.
- land reclamation and the implementation of other environmental measures.
- other unforeseen purposes stipulated in the legislation and regulatory acts.
There are many ways of accounting for funds.This, in turn, provides a certain freedom in the choice of the reflection of the facts taking place in the course of business.Effects of different methods of accounting to the cost or income and, accordingly, the financial outcome can be quite significant depending on the objectives pursued by the organization in its activities.
Provisions are inventoried at the end of the year.The main goal of this operation is to check the feasibility of establishing the correctness of the calculation and replacement funds.
Provisions are inventoried on the basis of orders (orders) management.The standard form for such inventories to be developed, in connection with the accountant has the right to develop their own form.If the company's accounting records coincides with the tax, this will serve as an inventory and inventory documents, and register.
specialist identifies the amounts transferred to the reserve, and correlates them with all the payments that were made to him.It so happens that the spare resources is not enough.In this case, the amounts are allocated from other sources, they are included in other expenses.If the cost is less than the reserved amount, in the calculation of income tax residual funds included in non-operating income.
permitted to transfer the remains of the coming year.It is possible, for example, if any of the employees did not take vacation or work at the plant delayed repair of fixed assets.These amounts are included in the reserve for the coming year and are not included in the calculation of income tax in the current year.
However, in some cases there is a necessity to clarify the tolerable amount.For example, with respect to the reserved funds allocated for warranty repair, take into account the proportion of the actual costs of implementing the repair work in total revenue for the products to which this warranty applies.The transfer of residual funds available if the accounting policy of the company in the coming year provides the same type of provision.
should be noted that previously, in order to avoid sudden jumps in the cost of production, as well as a uniform distribution for the period, the right to create reserves for future expenses has been used widely in enterprises.Today, these funds have a somewhat different status.Taking them from the financial statements, they are an estimated liability company.
