"Prepaid expenses": that applies to them?

In 2011, the accounting legislation has been changed.Adjustments, in particular, touched reflect the costs that have arisen in the same period but relate to multiple financial cycles.These costs are referred to as BPO.Next, consider how to account for prepaid expenses that applies to them.

Legislation

financial statements of the new form was approved by the Ministry of Finance Order 66n.She was removed from the line, fixing prepaid expenses (reserves).After that follows orders 186n adjustments were made in para. 65 PBU.The new edition of this document includes provisions on how fixed prepaid expenses that applies to them at the moment.Thus, costs are incurred by the organization in the reporting cycle, but relating to the following shall be entered in the balance sheet under the terms of the recognition of assets.Write-off of deferred expenses performed in accordance with the general rules of disposal of funds of this type.

accounting concept

In accordance with para. 8.3 BMF active in the domestic market economy is recognized as such if probable that future profits from the drug.Moreover, its value can be measured with sufficient reliability.In Sec. 7.2 Concept states that as assets are the economic resources that are under the control of the company as a result of the exercise of entrepreneurial activity, and which may bring him a profit in future periods.Upcoming economic benefits include potential asset indirectly or directly contribute to the flow of cash.It is believed that the funds can be profitable in the future, if they:

1. Used detached or in combination with other agents in the production of services, products or works intended for sale.
2. exchange for other assets.
3. distributed among the owners of the enterprise.

Classification In accordance with the new para. 65 AR, certain types of deferred expenses should relate to certain assets.In some cases, difficult to classify.However, if you set the related costs to the general definition of an asset, it is possible to consider other non-current or other current assets in accordance with the write-off period.If you intend to disposals LSO costs throughout the year, it is shown in the current assets.If the write-off of deferred expenses will be implemented over a period exceeding 12 months., They are included in non-current assets.

complexity of implementing the concept

The above situation has caused difficulties accountants.For example, the question of how to distribute if a Deferred expenses include insurance premiums.The fact that they include a part of an asset can not.To clarify the situation, the Ministry of Finance had issued a letter.According to him, determining deferred expenses (which applies to them in the current cycle and concerns forthcoming), if they meet the conditions, which recognizes one or the other assets, they are recorded in the balance sheet composition and eliminated in accordance with the procedure adopted forthis category.In other cases, such expenses are shown as BPO.Cancellation carried out through reasonable distribution between financial periods by the rules established in the company (in proportion to the number of products, for example) during the period to which they relate.

Expert opinion

Given the above, it can be assumed that the very procedure for recognition and the subsequent write-off of deferred costs remained the same.The changes affected only the rules fixing the BPO in balance.According to experts, these adjustments specifically indicate as shown prepaid expenses that applies to them.In particular, their composition should include only those costs that are really those are.Their description is contained in the PBU 10/99 (paragraphs 2 and 3).On the other hand, they must relate to future financial periods.In other words, there is and can be set to cycle, during which the realized costs will bring economic benefits to the enterprise.

Prepaid expenses: account

When the article cost should clearly determine whether the asset is their rules of origin, or that the costs are recognized immediately.In carrying out the operations necessary to adhere to the established algorithm.First of all, you should check whether the current regulations provide for the accounting method for the uniform distribution of the analyzed costs.If the answer to this question, they remain in the midrange.97. Prepaid expenses in this case, you can continue to distribute.If this method does not provide, necessary to determine whether it is possible in the upcoming cycle of financial income from these funds.The ability to transfer these costs in the future envisaged in the PBU 10/99 (in paragraphs 9 and 19).If so, they should also be distributed.

remaining costs

They are subject to any cancellation or included in the authorized advances.In the first case, you should check compliance with all the conditions for the recognition of expenses that are installed in the PBU 10/99 (item 16).In particular, it is necessary to determine that:

1. consumption can be implemented for a particular contract, required by law or other regulation, business customs.
2. amount of costs can be established.
3. It is believed that the implementation of a particular operation will be a reduction of economic profit enterprise.In other words, the organization of the transferred assets or not the uncertainty of its transmission.

If at least one of these conditions is not met, the fixed account of advances paid (receivables).This provision also applies to payment for work (services), when the time of the transfer of funds, it is not executed (not provided).This agreement may be terminated at any time with the requirement of full or partial refund.The remaining costs are included in the losses.

Cost categories under

In accordance with the new rules, are distributed over a period of only some of the costs of future periods.Account thus may contain:

1. One-time payments for the right to use the results of intellectual activity or means of individualization, which are paid on license agreements, franchise agreements and other similar documents with the established expiration date.
2. Discount on bonds or interest accrued.
3. Additional costs on borrowings.
4. Accrued interest on the principal amount.
5. costs incurred with respect to the upcoming work on the contract.They include the cost of materials that have been transmitted for execution of the agreement.This category is the rent, which is listed in the financial period, but refers to the upcoming cycles.Disposal of such costs shall be as defined in AR 2/08 (in paragraphs 21 and 16).
6. cost of raw materials for the production of tempered, but related to future periods.This applies if the materials used in the preparatory work of the seasonality of production, in the course of mining-preparatory activities in the development of new units, departments, enterprises (start-up costs), in the development of new technologies and products in the process of land reclamation.

errors

often on MF.97 record:

1. costs for research and development.These deferred expenses are reflected in the midrange.08 and displayed on the article, which is fixed other non-current assets.After work, they are included in the midrange.04 and displayed on the article "The results of development and research."
2. costs of subscriptions to periodicals.These costs are included in the advance.The fact that the company may at any time opt out of receiving the following numbers and request a refund of the amount paid.
3. lease payments, which are listed at the same time for the coming periods.They should also be included in the accounts receivable, as services not yet rendered.

To correct inaccuracies necessary inventory of prepaid expenses.

Inclusion in damages

Under the new rules to the current costs include:

1. expenses insurance contracts.These include, among other things, include arrangements for the protection of civil liability, property insurance and hull insurance and so on.The amount paid fee (premium) to these acts may be taken into account at the same time as an expense at the time the policy (the beginning of the agreement), as the regulations do not set a special procedure for their fixation.Paid insurance premium is not included in the advance, as in the case of premature failure of the organization of the contract, it will not be returned if another condition stipulated in the agreement.
2. Selling going over the next month, and the contributions of these amounts.Uniform their inclusion in the cost in accordance with the RAS is not provided.Also, they can not be considered as advances, since their payment is made for the spent time.

1C: prepaid expenses

At the request of users to MF.76 was tied Directory BPO.This is done in cases where there was a need to distribute evenly the insurance, but the user does not consider that it is included in prepaid expenses.Postings in this case is carried out using the MF.76:

• "contributions (payments) for voluntary insurance in case of injury or death" (76.01.2).
• Deductions for other categories of insurance (76.01.9).

innovation as one of the innovations relating to the above changes in the law, acts props, indicating the type of asset.Its meaning is to establish the balance of the line, which will include certain deferred expenses.The postings must be done simultaneously with the filling of props for all RPB, who have a debit balance at the end of the fiscal cycle.If this information is missing, the remaining costs are included in current assets in the balance sheet (line 1260).This prop is not important to write-offs and accounting costs.The adjustments did not affect the law and order of recognition and disposal of BPR - in the previous program it.This means that when the need arises in any way to override established deferrals types of assets before the formation of the financial statements, the value at the relevant details may be changed without performing any documents pereprovodki receipt or disposal of these operations costs.

a breakdown of the balance of the lines

This can be done using the appropriate button.It is located on the top of the command line report called "Decode."During the formation and auto-fill balance, the program allows you to define parameters.To check the correctness of filling in the directory BPO type of asset, the analysis of the method by which the costs will be displayed in the balance sheet, it is possible to apply the method of standard accounting report "Analysis subkonto."In this case, it is necessary first to set up.Here's how:

1. View subkonto costs should be set for future periods.
2. In the first group are specified BPM, type of asset.
3. second group sets its own expenses for future periods.

Setting other parameters of the report can be made as needed.That will have painting, which fully reflects the allocation of costs for future periods of balance-sheet assets.Moreover, for each BPO will be given the transcript.In a similar way you can customize the trial balance of the MF.97.

Self-determination of the order of accounting

This operation is allowed for expenses that relate to future periods and are not directly included in the current AR as BPO.With self-determination of the accounting options are possible:

1. Committing to the "expensive" one-time write-off of articles and subsequent articles on accounting profit on sales (p. 90), or other expenses and income (sch.91).
2. Reflection on MF.97 (LSO) with the distribution to the "costs" upon the occurrence of the period in which they are included.

allowed another option.It is the reflection of the cost of the special sub-accounts of expenses and subsequent inclusion in the bill, taking into account the income from sales (cq. 90), or other expenses and income.In this case, will comply with the regulations AR 10/99 (p. 19).This requirement is to record the cost of the report on profits and losses through their reasonable distribution of financial periods when costs cause revenue collection over several cycles when you can not clearly identify or perhaps only indirectly the link between costs and profits.It should be noted that the last two can be most advantageous for the company.In these cases it has the opportunity to bring together as much as possible, and the tax balance sheet.The first involves not lump, and a gradual write-off of expenses that relate to the period ahead.The exact definition of a method of accounting and disposals carried out in the framework of the financial policy of the organization.The main criterion for a gradual rather than a one-time allocation of those costs or other acts for profit, which is associated with them in the present and in future cycles.

VAT

As indicated above, the amount of expenses for future periods recorded in the midrange.97. "input" VAT "concerning them, deductible by the general order. This is done after they are shown in the account, provided that these costs are required to carry out activities, which are taxed, and if the supplier has an accountrelevant invoice.