Carrying out work under a toll agreement. We reflect in accounting and tax accounting the demolition of a building, the further use of which is inappropriate Materials from dismantling
"Chief Accountant". Appendix "Accounting in construction", N 1, 2005
WE HIRE A COMPANY TO DEMOLISH A BUILDING
Instead of an old building, its owner has the right to erect a new modern building. The demolition work can be carried out either in-house or by a third party.
Moreover, a contract for the demolition of a building may be concluded with the condition that instead of payment, the construction organization takes for itself all the materials that will remain from the demolished building.
Example. CJSC Stroitelny Trest hired Omega LLC to demolish the building, in place of which a new facility will be built.
In accordance with the terms of the contract, in payment for its work, Omega LLC takes materials suitable for further use that will remain from the demolished building.
Let's assume that the cost of the work is not specified in the contract. Wherein:
- the cost of similar work to demolish the building, if they were paid in cash, is 500,000 rubles, and the actual cost of these works for Omega LLC was 420,000 rubles;
- the market value of materials received by Omega LLC from the demolition of the building is 520,000 rubles.
Accounting at CJSC "Stroitelny Trest"
The materials obtained during the dismantling and demolition of the building belong to the owner of this building, that is, ZAO Stroitelny Trest.
The actual cost of materials remaining from the disposal of fixed assets is determined based on their market value as of the date of acceptance for accounting. This is stated in paragraph 9 of the Accounting Regulations “Accounting for Inventories” (PBU 5/01), approved by Order of the Ministry of Finance of Russia dated June 9, 2001 N 44n. In this case, market value refers to the amount of money that can be received from the sale of these materials.
At the same time, the cost of materials obtained from dismantling fixed assets should be determined by the price of their possible use. This provision is enshrined in clause 84 of the Methodological Guidelines for Accounting of Fixed Assets, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 N 91n.
However, in our opinion, there is no contradiction between these points: if materials are planned to be used in one’s own activities, then they must be capitalized at the price of possible use, and if they are sold, at market value.
Therefore, in our case, for the cost of materials received by Omega LLC during the demolition of the building, the accountant of Stroitelny Trest CJSC needs to make the following entry in accounting:
Debit 10 subaccount "Building materials" Credit 91 subaccount "Other income"
- 520,000 rub. - materials received during the demolition of the building were capitalized at market value.
Income from the transfer of materials in payment for work performed by Omega LLC must be reflected in the accounting records of Stroitelny Trest CJSC in accordance with the requirements of clause 6.3 of the Accounting Regulations “Organization Income” (PBU 9/99), approved by Order of the Ministry of Finance Russia dated May 6, 1999 N 32n.
It is said here that the amount of receipts or receivables (in other words, income) under contracts providing for the fulfillment of obligations in non-monetary means is accepted for accounting at the cost of goods (valuables) received or to be received by the organization. Moreover, the cost of these goods (valuables) is determined based on the price at which, in comparable circumstances, the organization determines the cost of similar goods (valuables).
Thus, the income from the transfer of materials to Omega LLC is equal to the market value of the work performed by this company.
VAT must be charged on the income received by Stroitelny Trest CJSC from the transfer of materials. In this case, the taxable base is determined as the market value of the transferred materials, which follows from clause 2 of Article 154 of the Tax Code of the Russian Federation.
So, operations for the transfer of materials from Omega LLC to the accountant of Stroitelny Trest CJSC should be reflected in the accounting records with the following entries:
Debit 91 subaccount "Other expenses" Credit 10 subaccount "Building materials"
- 520,000 rub. - materials received during the demolition of the building were transferred to Omega LLC as payment for the work performed on the demolition of the building;
Debit 62 Credit 91 subaccount "Other income"
- 500,000 rub. - income from the transfer of materials is reflected;
Debit 91 subaccount "Other expenses" Credit 68 subaccount "VAT calculations"
- 79,322.03 rub. (RUB 520,000 x 18%: 118%) - VAT charged.
The costs of demolishing the building must be included in the cost of the object being built (account 08 "Investments in non-current assets" subaccount "Construction of fixed assets").
That is, these expenses will form the cost of a new fixed asset.
Therefore, when accounting for such work, you should be guided by the requirements of the Accounting Regulations “Accounting for Fixed Assets” (PBU 6/01).
Clause 11 of this PBU provides that the initial cost of fixed assets received under contracts providing for the fulfillment of obligations (payment) in non-monetary means is recognized as the value of assets transferred or to be transferred by the organization, based on their market price. At the same time, the cost of fixed assets does not include refundable taxes (clause 8 of PBU 6/01). And “input” VAT on goods (work, services) that were paid for with the organization’s property is calculated based on the book value of such property (clause 2 of Article 172 of the Tax Code of the Russian Federation).
Thus, the accountant will make the following entries in the accounting of Stroitelny Trest CJSC:
Debit 08 subaccount "Construction of fixed assets" Credit 60
- 426,400 rub. (520,000 rubles - 520,000 rubles x 18%) - reflects the cost of demolition work (excluding VAT);
Debit 19 Credit 60
- 93,600 rub. (RUB 520,000 x 18%) - VAT is reflected on the cost of demolition work;
Debit 60 Credit 62
- 500,000 rub. - mutual debts were offset;
Debit 60 Credit 91 subaccount "Other income"
- 20,000 rub. (426,400 + 93,600 - 500,000) - the difference in account 60 that arose when offsetting mutual debts was written off.
Note. Calculation of VAT on the book value of property
When paying for goods (work, services) with its own property, the organization can reimburse the “input” VAT from the budget in an amount calculated using the following formula: the book value of the property multiplied by the VAT rate. Representatives of official bodies provide the same explanations.
Accounting at Omega LLC
The accounting of transactions in Omega LLC is similar to the one we reviewed, since it is regulated by the same requirements.
The accountant of Omega LLC needs to reflect the transactions with the following entries:
Debit 20 Credit 02 (10, 26, 60, 69, 70...)
- 420,000 rub. - reflects the actual costs of demolishing the building;
Debit 62 Credit 90 subaccount "Revenue"
- 520,000 rub. - revenue from the work is reflected (based on the market value of the materials received);
Debit 90 subaccount "Value added tax" Credit 68 subaccount "VAT calculations"
- 79,322.03 rub. (RUB 520,000 x 18%: 118%) - VAT charged;
Debit 90 subaccount "Cost of sales" Credit 20
- 420,000 rub. - the cost of demolition work has been written off;
Debit 90 subaccount "Profit/loss from sales" Credit 99
- 20,677.97 rub. (520,000 - 79,322.03 - 420,000) - profit from the demolition of the building is reflected;
Debit 10 subaccount "Building materials" Credit 60
- 424,400 rub. (RUB 500,000 - RUB 420,000 x 18%) - materials received for the demolition of the building were capitalized excluding VAT (the cost of valuables received under commodity exchange contracts is determined based on the value of the transferred assets in accordance with clause 10 of PBU 5/01 "Accounting inventories");
Debit 19 Credit 60
- 75,600 rub. (RUB 420,000 x 18%) - VAT is reflected on the cost of materials received;
Debit 60 Credit 62
- 500,000 rub. - mutual debts were offset;
Debit 68 subaccount "VAT calculations" Credit 19
- 75,600 rub. - submitted for deduction from the budget of VAT on building materials;
Debit 91 subaccount "Other expenses" Credit 62
- 20,000 rub. (520,000 - 75,600 - 424,400) - the difference in account 62 that arose when offsetting mutual debts was written off.
Write-off of the balance on account 62 “Settlements with buyers and customers” in the amount of 20,000 rubles. is essentially debt forgiveness.
This amount will not be accepted for income tax purposes.
R.P.Nichuk
Auditor
Signed for seal
13.01.2005
Liquidation of real estate- a complex and costly operation. As a rule, real estate is liquidated if it begins to interfere with the organization. For example, it has become unprofitable: the costs of its maintenance significantly exceed the amount of income received from its use. Or it happens that in place of an old object it is planned to build something new (more powerful, economical, modern), the operation or sale of which should bring more income. We will deal with tax and accounting of real estate liquidation. But let’s make a reservation right away: this article does not address issues related to the forced demolition of real estate (as, for example, in cases of demolition of unauthorized buildings).
We prepare documents for liquidation
So, outdated real estate wastes space and does not generate adequate income. Its demolition causes difficulties not so much from an accounting and accounting point of view, but from an organizational and coordination point of view. After all, demolition of buildings is not like dismantling a cabinet in an office.
Stage 1. We make and formalize a decision on the liquidation of real estate
First of all, the organization must record on paper its decision to liquidate real estate.
According to the rules established for the liquidation of fixed assets, it is necessary to create a liquidation commission (Clause 77 of the Guidelines for accounting of fixed assets, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 N 91n (hereinafter referred to as the Guidelines)). To do this, the manager must sign an order for her appointment. The liquidation commission must include the chief accountant (accountant) and persons who are responsible for the safety of fixed assets.
It is also advisable to include representatives of the technical (or engineering) service in the commission.
The purpose of the commission is to assess whether the building needs to be demolished or not. This decision itself, as well as its justification, must be reflected by the commission in the act of writing off a fixed asset item in Form N OS-4 (Approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 N 7).
It often happens that the manager (who is also the sole owner) independently decides to demolish the building. In this case, there is no point in creating a commission. But it’s still better to do the act on you. Because the Form N OS-4- unified. And in order not to argue with the inspectors over the question of why you filled out the unified form incorrectly (let alone didn’t fill it out at all), it is better to draw up an OS-4 act according to the instructions - “as it should.”
By the way, looking ahead, let’s say that the OS-4 act is also important for justifying the costs associated with the demolition of a building in tax accounting. After all, it (according to the rules that are still in force) is a mandatory document confirming the very fact of demolition of the building.
From authoritative sources
Bakhvalova Alexandra Sergeevna, chief specialist-expert of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of Russia
“According to the current legislation, primary accounting documents are accepted for accounting if they are drawn up in the form contained in the albums of unified forms of primary accounting documentation, and documents whose form is not provided for in these albums must contain the mandatory details provided for by the Law “On Accounting” ( Clause 2 of Article 9 of the Federal Law of November 21, 1996 N 129-FZ “On Accounting”).
For cases of liquidation of an asset, the albums of unified forms contain the form of the primary accounting document - Form N OS-4 “Act on the write-off of fixed assets (except for motor vehicles)”. Therefore, when writing off a fixed asset (building), it is necessary to draw up an act in Form N OS-4, which must be signed by members of the liquidation commission.
In my opinion, a document independently drawn up by an organization (which completely replaces the act in Form N OS-4) should not be accepted for accounting as a primary document."
So, you will need Act OS-4. But be prepared for difficulties in filling it out, since the form of this act does not take into account all the nuances of liquidating real estate: it is intended for writing off various fixed assets.
If the decision on liquidation is made by a commission, and the manager approves it, then in order to fill out this act reliably, you will have to enter additional details into it. Because it must reflect, in addition to the decision on liquidation itself, its results. After all, it is simply impossible to liquidate real estate in 5 minutes. In this case, you will need at least different lines for the dates of signing of the first two sections of the act (drawn up before liquidation) and its section. 3. Section 3 is called “Information on the costs associated with the write-off of fixed assets from accounting, and on the receipt of material assets from their write-off,” and it should be compiled by the accounting department based on the results of liquidation.
But you can take a different path. For example, you can draw up a separate order from the manager approving the decision to demolish the building. And the accounting department will draw up an OS-4 act solely to reflect the results of demolition in accounting. But even in this case, the requirement for this act to be signed by the liquidation commission and approved by its head is not canceled.
The search for answers to questions about how to correctly fill out the OS-4 act when demolishing real estate is complicated by the fact that neither the Ministry of Finance, nor Rosstat, nor any other department can currently develop and approve forms of primary accounting documents. They also do not have the authority to give explanations on their application (Letter of the Ministry of Finance of Russia dated October 14, 2010 N 03-04-05/8-622). Meanwhile, the strict connection of the Accounting Law to these unified forms remains.
To clarify the difficult situation that has arisen with the registration of liquidation of real estate in accounting (in particular, with filling out the OS-4 act), we contacted the Ministry of Finance.
From authoritative sources
Sukharev Igor Robertovich, Head of the Department of Accounting and Reporting Methodology of the Department for Regulation of State Financial Control, Auditing, Accounting and Reporting of the Ministry of Finance of Russia
“Unified forms of primary documents are already an obsolete phenomenon. The state function of approving such forms and establishing requirements for their completion is recognized as redundant. There is no government agency whose competence would include it. The bill on accounting, which is currently being considered in the Duma, does not provide for what -or standard forms of documents, there are only requirements for details.
So the question of what additional documents (in addition to the OS-4 act) need to be drawn up when liquidating real estate remains at the discretion of the organization. Of course, every independently developed document must contain the necessary details and it must really confirm a fait accompli of economic life."
So, no matter which option for preparing documents (including the OS-4 act) you choose, the main thing is that it is clear from them what happened and when. Since these dates may be needed, among other things, to reflect transactions in accounting (which we will discuss in detail later).
Stage 2. We coordinate the liquidation of real estate with supervisory authorities
To obtain permission to liquidate real estate, organizations, as a rule, have to contact the local administration with a whole package of documents.
So, for example, in Moscow, the owner of a building (if it is not an object of cultural heritage and is not located on historically established and historically particularly valuable territories) can demolish it on the basis of (Clause 2.1.4 of the Rules for the preparation and execution of earthworks, arrangement and maintenance of construction sites in the city of Moscow, approved by Decree of the Moscow Government dated December 7, 2004 N 857-PP):
(or) a demolition permit issued by the Moscow Main Directorate for the Protection of Monuments;
(or) orders of the prefect of the administrative district (head of the district government).
Approval of permits for the demolition of valuable buildings located in the historical part of the city is more complex.
In addition, when demolishing a building, it is necessary to coordinate with Moscow officials the process of disposal and processing of construction waste (Clause 2.3.12, 2.3.13 of the Rules, approved by Moscow Government Resolution No. 857-PP of December 7, 2004).
Also, before starting work, you must obtain a warrant for their production from the Technical Inspectorate of the Association of Administrative and Technical Inspections of Moscow. And to receive each piece of paper you will need a whole package of documents.
And in order to stimulate the owners in collecting these documents and interest them in obtaining approvals, an administrative fine is provided for the unauthorized demolition of buildings in Moscow (Article 7.4 of the Moscow City Law of November 21, 2007 N 45 “Moscow City Code on Administrative Offences”):
- for officials - from 1000 to 5000 rubles;
- for organizations - from 200,000 to 300,000 rubles.
Another example: Gorno-Altaisk. Permission to demolish a building in this city is issued by the Department of Architecture and Urban Planning (Clause 15.2, 15.3 of the Land Use and Development Rules in the city of Gorno-Altaisk, approved by the Decision of the Gorno-Altaisk City Council of Deputies dated September 15, 2005 N 29-3). And of course, to obtain such a permit, you also need to submit a number of documents (according to the list established by the Land Use Rules).
In many cities, the preparation and issuance of permits for the demolition or dismantling of objects is entrusted to a certain department of the local administration (for example, the department of architecture and urban planning, the department of architecture and urban services, etc.).
Therefore, you need to find out a clear list of the documents you need to approve the demolition of your building from the local administration.
Stage 3. We liquidate real estate and document the results
Upon completion of the demolition or dismantling of the property, as we have already said, we fill out section. 3 acts in form N OS-4. In addition, it would be completely useful to attach to this act a copy of the document from the technical inventory service (BTI certificate on demolition and deregistration from cadastral registration) (Clause 9 of the Regulations on the organization of state technical accounting in the Russian Federation, approved by Decree of the Government of the Russian Federation of December 4, 2000 N 921).
You also need to put a note on the disposal of a fixed asset item on the inventory card in Form N OS-6 (Clause 80 of the Guidelines).
The final stage in documenting the demolition of a building will be the registration of termination of ownership of real estate, which must be registered (Article 235 of the Civil Code of the Russian Federation). After all, only when an entry is made in the Unified State Register of Rights to Real Estate and Transactions with It about the termination of ownership of real estate, the organization will cease to be the owner of this real estate (Clause 1, 3 of Article 2 of the Federal Law of July 21, 1997 N 122-FZ "On state registration of rights to real estate and transactions with it"). But, as we will see later, from the point of view of accounting and tax accounting, this document is now not so important.
In addition to the above documents, in order to reflect real estate liquidation operations in accounting and tax accounting, you will need contracts for contractor services, certificates of completed work, payment documents, and others.
We figure out when and how to write off the residual value of liquidated real estate
When recording the liquidation of real estate, first of all, we need to figure out where and when we will write off its residual value (of course, if the real estate has not been fully depreciated). There are several interesting points in both accounting and tax accounting that need to be considered in more detail.
Deciding how to write off the residual value of real estate
Situation 1. We are demolishing the building and do not plan to build anything in the near future.
In tax accounting, the recognition of residual value in expenses depends on the depreciation method:
(if) depreciation was calculated using the straight-line method, That:
- you must stop accruing depreciation using the linear method from the 1st day of the month following the month in which the fixed asset was removed from the depreciable property for any reason (or its value was completely written off) (Clause 5 of Article 259.1 of the Tax Code of the Russian Federation). This means that you cannot depreciate a building that you do not use and no longer plan to use in your business (even if it has not yet been demolished);
- the residual value of liquidated real estate must be fully taken into account as part of non-operating expenses (Clause 5 of Article 259.1, paragraph 8 of paragraph 1 of Article 265 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated October 21, 2008 N 03-03-06/1/592). This must be done after the demolition of the building (Letters of the Ministry of Finance of Russia dated 02/07/2011 N 03-03-06/2/27, dated 07/09/2009 N 03-03-06/1/454, dated 10/21/2008 N 03-03- 06/1/592, dated 19.09.2007 N 03-03-06/1/675, dated 17.01.2006 N 03-03-04/1/27) and reflecting its results in an act in form N OS-4. The correctness of this approach was confirmed to us by the Ministry of Finance.
From authoritative sources
Bakhvalova A.S., Ministry of Finance of Russia
“Depreciable property is property that is owned by the taxpayer and is used by him to generate income (Clause 1 of Article 256 of the Tax Code of the Russian Federation). And the accrual of depreciation stops from the 1st day of the month following the month when the cost of the object was completely written off depreciable property or when this object has been removed from the taxpayer’s depreciable property for any reason (Clause 5 of Article 259.1 of the Tax Code of the Russian Federation). Thus, depreciation stops accruing from the 1st day of the month following the month when the fixed asset item ceased to be used in activities organization.In this case, the actual demolition of the building can be done later.
It is possible to take into account the residual value of a demolished building as part of tax expenses only on the basis of a fully executed act in form N OS-4, since (as we have already figured out) it is the mandatory primary document necessary to formalize this operation (Subclause 8, clause 1, art. 265 of the Tax Code of the Russian Federation).
Note
Just in case, remember that:
- there is no need to restore the depreciation bonus (if it was applied) when demolishing the property. Since the depreciation bonus is restored only in the event of the sale (and not liquidation) of a fixed asset before the expiration of 5 years from the date of acquisition (Clause 9 of Article 258 of the Tax Code of the Russian Federation; Letters of the Ministry of Finance of Russia dated March 20, 2009 N 03-03-06/1/169, dated 03/16/2009 N 03-03-05/37; Letter of the Federal Tax Service of Russia dated 03/27/2009 N ShS-22-3/232@);
- it is also not necessary to gradually recognize in tax accounting the loss from the write-off of a demolished building (fixed asset). After all, a loss that must be included in other expenses in equal shares over the remaining service life can only appear in the event of a sale (Subclause 1, clause 1, clause 3, Article 268 of the Tax Code of the Russian Federation);
(if) depreciation was calculated using a non-linear method, then the liquidated real estate should simply be excluded from the depreciation group (Clause 13 of Article 259.2, paragraph 8 of paragraph 1 of Article 265 of the Tax Code of the Russian Federation). However, the total cost of fixed assets of this group will not change, and it turns out that you will continue to write off the cost of real estate through depreciation (Letter of the Ministry of Finance of Russia dated December 20, 2010 N 03-03-06/2/217).
Situation 2. We demolish a building for a new construction.
Let's see if there are any differences if you plan to demolish a building in order to build something new in its place. In this case, how to take into account the costs of liquidation of real estate (including the cost of demolition or dismantling work), as well as the residual value:
(or) as independent expenses - that is, the same as in the case of liquidation of real estate without subsequent construction;
(or) as part of the capital expenditures for the construction of a new building - after all, the ruins are demolished precisely in order to build a new facility in their place.
The Ministry of Finance has already answered this question: there is no basis either in accounting or tax accounting to take into account the costs of dismantling and liquidation as part of capital investments in new construction (Letter of the Ministry of Finance of Russia dated September 11, 2009 N 03-05-05-01/55; clause 31 PBU 6/01 “Accounting for fixed assets”, approved by Order of the Ministry of Finance of Russia dated March 30, 2001 N 26n; clause 8 clause 1 article 265, clause 3 clause 7 article 272 of the Tax Code of the Russian Federation). But this answer concerns demolition for planned (in the indefinite future) construction.
But will there be any special features when the demolition of a building is a separate stage of work during new construction? Indeed, in this case, the costs of demolishing the building are usually reflected in the construction estimate. Financial department specialists think so.
From authoritative sources
Sukharev I.R., Ministry of Finance of Russia
“When the cost of demolishing a building is included in the estimate for new construction, two different situations are possible. It all depends on where the building that was demolished came from.
Situation 1. An organization bought or took a long-term lease on a plot of land with a dilapidated building in order to build a new facility. This dilapidated building is not needed; it was purchased as a burden, not as a benefit. In this case, all costs of its demolition are included in the cost of the new property. If an organization bought a land plot, then it was included in the cost of the land plot.
Situation 2. The demolished building was previously the main asset of the organization itself. Then both the residual value and the demolition costs must be attributed to current expenses.
The logic is this: you need to look at what income certain costs are associated with. In the first case, the organization's expenses are made for the sake of future income. And in the second situation, income from the use of the building has already been received in the past."
Since we are considering the case when an organization liquidates a building that was accounted for as a fixed asset on its balance sheet, the costs of its demolition and residual value must be taken into account as independent expenses, regardless of whether something will be built in its place or not. .
Determining when to write off real estate from the balance sheet as fixed assets
The residual value of demolished real estate can be fully taken into account in other expenses (on account 91-2 “Other expenses”) (Clause 4, 11 PBU 10/99 “Organization expenses”, approved by Order of the Ministry of Finance of Russia dated 05/06/1999 N 33n). This is all clear (and, as we have already found out, it does not matter at all whether you plan to build something on the site of your old building or not).
The question is - when can and should this be done? And it is especially important because property tax depends on the accounting value of fixed assets (Clause 1 of Article 374 of the Tax Code of the Russian Federation). If you write off the property earlier than necessary, inspectors will charge additional property taxes and penalties. Until recently (or rather, before amendments were made to the accounting rules effective from 01/01/2011), the Ministry of Finance insisted that real estate cannot be written off from the balance sheet until the organization registered the loss of its ownership rights to this real estate (Letter from the Ministry of Finance of Russia dated January 28, 2010 N 03-05-05-01/02). And the regulatory authorities demanded payment of property taxes up to this point.
But accounting of real estate does not depend in any way on the state registration of the transfer (termination) of ownership of it. The Ministry of Finance already agrees with this (Letter of the Ministry of Finance of Russia dated March 22, 2011 N 07-02-10/20).
So how do you determine when to write off real estate from your balance sheet as a fixed asset? We turned to financial department specialists for clarification.
From authoritative sources
Sukharev I.R., Ministry of Finance of Russia
“This is a difficult question, because practice diverges from the requirements of regulatory documents. PBU 6/01 requires writing off an asset when it has ceased to bring economic benefits to the organization. And it turns out that this cannot always be confirmed by the date of the write-off act in Form N OS-4 . After all, if the decision to liquidate a building is made while employees are still working in it (it is in use), then this is not yet a write-off. A fixed asset must be written off when it has ceased to be used and it has become clear that its use is no longer intended. This may be an order from the manager to stop using the building and begin preparations for demolition. Or some other document from which it follows that from this date the operation of the facility has been stopped and further demolition is expected. It does not even matter when it is actually demolished. For example ", there is no money for demolition yet. The main thing is that the building does not bring economic benefits and we cannot use it."
This means that real estate can and should be written off from accounting as fixed assets at the moment when it becomes clear that it cannot bring you economic benefit - that is, you no longer use it and do not plan to use it in the future. And this moment certainly does not depend on the state registration of termination of ownership of this property.
If the decision to demolish the building was made by your organization simultaneously with the decision to cease using it (and the organization actually stopped using the building), then the date the building is written off is not difficult to determine. This will be the date the demolition decision is made. If you do not plan to demolish the building immediately, then in accounting it is advisable to reflect its conditional valuation on an off-balance sheet account. And it will be possible to write off the building from off-balance sheet accounting after its demolition.
Pay attention to the difference between tax and accounting
And one moment. Due to the fact that some time usually passes between the day the decision is made to demolish and the day the building is actually demolished, differences may arise between tax and accounting accounting in the timing of recognition of the under-depreciated cost of the building as expenses (even if depreciation was calculated using the straight-line method in tax accounting). It turns out that:
- the accrual of depreciation in both accounting and tax accounting must be stopped simultaneously - starting from the 1st day of the month following the month of the decision that the building is no longer in use and will not be used;
- on the date of the decision to stop using the building, its value must be written off in accounting, but in tax accounting it is necessary to wait for the actual demolition of the building (complete completion of the OS-4 act).
If the decision that a building can no longer be useful and its actual demolition are within one block, then there are no difficulties. But if this process is extended over a longer period of time, temporary differences will have to be reflected according to PBU 18/02.
Let's figure out whether it is necessary to restore VAT on the residual value
Situation 1. The property was registered and put into operation before 01/01/2001.
Since we are considering the liquidation of real estate, it is very likely that we are talking about some outdated (morally or physically) buildings. And it is possible that you purchased them quite a long time ago. If this happened before 2001, then you have no obligation to restore VAT at all. According to the rules of the Tax Code, it is necessary to restore only the tax that was accepted for deduction according to the rules of the same Tax Code (Chapter 21 of the Tax Code of the Russian Federation) (Clause 3 of Article 170 of the Tax Code of the Russian Federation). Therefore, if you accepted input VAT for deduction under the VAT Law (Article 7 of the Law of the Russian Federation dated 06.12.1991 N 1992-1 “On Value Added Tax”), then you do not need to restore anything (Resolution of the Federal Antimonopoly Service dated 28.10.2008 case No. A65-610/2007-CA2-22).
Attention! VAT on real estate accepted for deduction before 2001 does not need to be restored.
Situation 2. The property was registered and put into operation in 2001 and later.
Let us say right away that in this situation, the regulatory authorities advocate that organizations restore VAT when liquidating fixed assets that are under-depreciated in accounting - after all, you will no longer use such fixed assets in activities subject to VAT (Letter of the Ministry of Finance of Russia dated January 29, 2009 N 03-07 -11/22). The amount of the restored tax must be determined as part of the input VAT previously accepted for deduction, proportional to the residual (book) value without taking into account revaluations (Subclause 1, clause 3, Article 170 of the Tax Code of the Russian Federation). After you restore the VAT amount, it can be included in other expenses when calculating income tax (Letter of the Ministry of Finance of Russia dated December 7, 2007 N 03-07-11/617). In accounting, this VAT can also be recognized as an expense (accounted for in subaccount 91-2 “Other expenses”) (Clause 4, 11 PBU 10/99).
However, so far the Tax Code does not contain an obligation to restore VAT when writing off (liquidating) under-depreciated fixed assets. Therefore, arbitration courts support organizations that do not restore input tax (Resolutions of the FAS Moscow Region dated 04/27/2010 N KA-A40/2005-10, dated 01/13/2009 N KA-A40/12259-08; FAS TsO dated 03/10/2010 in case N A35-8336/08-C8).
We consult with the manager
If do not restore previously deducted VAT for liquidated real estate acquired after 2001, this may lead to litigation with the tax authorities. True, the probability of winning the argument is almost one hundred percent.
We take into account the costs associated with the liquidation of real estate and VAT on them
In addition to the residual value, there will usually be other expenses. For example, the costs of dismantling, garbage removal, and payment for other services of the performers. Not to mention the costs of coordinating the liquidation itself. We safely take all these expenses into account both in accounting and when calculating income tax (Clause 4, 11 PBU 10/99; paragraph 8 paragraph 1 Article 265 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated October 21, 2008 N 03-03- 06/1/592).
But with VAT everything is a little more complicated. If your contractors or other performers of work are payers of this tax, then you need to deal with one difficult question: is it possible to deduct input VAT on “liquidation” services? There are traditionally two positions on this issue (of course, we consider the situation when the demolished real estate was previously used in activities subject to VAT).
Position 1. Ministry of Finance: VAT on the work and services of a contractor for the liquidation of fixed assets cannot be deducted(Letters of the Ministry of Finance of Russia dated November 2, 2010 N 03-03-06/1/682, dated October 22, 2010 N 03-07-11/420).
The Financial Department believes that since the liquidation of fixed assets does not apply to operations subject to VAT, it cannot be accepted for deduction of input VAT on liquidation (dismantling) work (Clause 2 of Article 171 of the Tax Code of the Russian Federation).
Position 2. Forensic perspective: input VAT on liquidation work and services can be deducted.
By the way, the Presidium of the Supreme Arbitration Court of the Russian Federation has already come to this conclusion (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated April 20, 2010 N 17969/09). He believes that the use of fixed assets in the activities of an organization is complex and includes installation, operation, and, when production needs arise, the liquidation of fixed assets. It follows from this that organizations have the right to deduct VAT paid to the contractor upon liquidation of a fixed asset.
Conclusion
As can be seen from the letters of the Ministry of Finance, the opinions of the arbitration courts have not yet influenced the position of the regulatory authorities (Letters of the Ministry of Finance of Russia dated November 2, 2010 N 03-03-06/1/682, dated October 22, 2010 N 03-07-11/420).
So if you accept VAT on dismantling and liquidation work as a deduction, get ready for a conflict with the inspectors.
So, it is safer to follow the Ministry of Finance’s position and not deduct VAT on liquidation and dismantling work.
But here another problem arises: what to do with VAT that is not deductible? The question can be formulated more clearly as follows: can input VAT paid to the contractor and not accepted for deduction be included in the cost of liquidation work (Clause 2 of Article 170 of the Tax Code of the Russian Federation)?
Since we have not accepted input VAT for deduction, it would be logical to include it in the cost of the work itself, and then take it all into account as other expenses in accounting (Clause 4, 11 of PBU 10/99) and as non-operating expenses in tax accounting (Subclause 8 clause 1 article 265 of the Tax Code of the Russian Federation).
Let’s not beat around the bush: tax officials are against taking into account the failed deduction of VAT in expenses. The arguments are as follows: input VAT is taken into account in the cost of goods (work, services) if they are purchased for operations that are not subject to taxation (Subclause 1, paragraph 2, Article 170 of the Tax Code of the Russian Federation), but the liquidation of a fixed asset does not apply to such operations (Article 149 of the Tax Code of the Russian Federation). Indeed, in this case there is no object of VAT taxation at all (Clause 1 of Article 39, paragraph 1 of Article 146 of the Tax Code of the Russian Federation). This means that VAT on the cost of dismantling and liquidation work cannot be taken into account when taxing profits. Inspectors present all these arguments in courts.
However, arbitration courts, when considering disputes about what to do with the VAT not accepted for deduction, do not share the position of the tax authorities. They do not see any fundamental differences between the concepts of “absence of an object of taxation” and “transactions not subject to taxation”. Therefore, since the taxpayer did not deduct VAT on dismantling work, then, in the opinion of the courts, VAT should be included in the cost of the work itself and taken into account when calculating income tax as a non-operating expense (Resolution of the Federal Antimonopoly Service of the Moscow Region dated May 14, 2009 N KA-A40/3703- 09-2; Ninth Arbitration Court of Appeal dated 06/04/2009 N 09AP-8136/2009-AK). There must be at least some kind of justice.
Note
By the way, our magazine has already published the point of view of specialists from the Russian Ministry of Finance on this issue, who allow VAT on contractors’ work that was not deducted to be written off as expenses.
And don’t be confused by the fact that some courts allow VAT to be deducted, while others allow this VAT to be taken into account in expenses. The conclusion from all these decisions can be drawn as follows: the courts support taxpayers, no matter how they dispose of the input VAT on liquidation work (both in the case if they accepted it for deduction, and in the case when the input VAT was taken into account in the cost of the work and written off to expenses).
We calculate income from the liquidation of real estate
Dismantling a building can create many different materials. And some of them you can either use yourself or sell. In this case, everything that you find useful must be capitalized. To do this, it is necessary to draw up an act on the recording of material assets received during the dismantling and dismantling of buildings and structures, in form N M-35 (Approved by Resolution of the State Statistics Committee of Russia dated October 30, 1997 N 71a).
For capitalized assets, it is necessary to determine their market value. You must take this into account on the date the property is written off:
- in accounting - as other income (Clause 9 PBU 5/01 "Accounting for inventories", approved by Order of the Ministry of Finance of Russia dated 06/09/2001 N 44n; clause 7 PBU 9/99 "Income of the organization", approved. Order of the Ministry of Finance of Russia dated May 6, 1999 N 32n; clause 31 PBU 6/01; clause 79 of the Methodological Instructions);
- in tax accounting - as non-operating income (Clause 13 of Article 250, paragraph 8 of paragraph 4 of Article 271 of the Tax Code of the Russian Federation).
In the future, when using capitalized material assets in production or when selling them, you can write off their independently determined value as expenses. And in full - both in accounting and tax accounting (Clause 2 of Article 254, paragraph 2 of paragraph 1 of Article 268 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated September 30, 2010 N 03-03-06/1/621).
Example . Reflection in accounting of liquidation of real estate
Condition
On the balance sheet of the organization there is a building (acquired before 2001) with an initial cost of 5,000,000 rubles. (both in accounting and tax accounting). To simplify the example, let’s assume that the amount of accrued depreciation in accounting and tax accounting is the same - 3,500,000 rubles.
The organization stopped using the building and decided to demolish it. Both of these decisions were made simultaneously (in April 2011) and are reflected in section. 1 and 2 acts for write-off of fixed assets according to Form N OS-4.
For demolition, the organization hired a contractor, the cost of its work was 450,000 rubles. plus VAT 81,000 rub. (total 531,000 rub.). The building was demolished in May 2011.
The cost of materials remaining after dismantling, suitable for further use, is set at 90,000 rubles. The demolition results are reflected in Section. 3 acts in form N OS-4 in May 2011
Solution
Since the building was purchased before 2001, there is no need to recover VAT upon demolition of this building.
The organization decided not to deduct VAT on dismantling work performed by a third party and included it in the cost of this work.
The following entries will be made in accounting.
|
On the date of the decision that the building will no longer be |
|||
|
Original cost written off |
01, subaccount |
01 "Basic |
|
|
Depreciation written off |
02 |
01, subaccount |
|
|
Residual value written off |
91-2 "Others |
01, subaccount |
|
|
Cost of the building in conditional valuation |
013 "Buildings, |
||
|
Starting next month, depreciation will no longer be calculated in accounting |
|||
|
On the date of completion of the liquidation of the building and signing of the act of completion |
|||
|
The costs of paying for the work are reflected |
91-2 "Others |
60 "Calculations |
|
|
Materials suitable for |
10 |
91-1 "Other |
|
|
The cost of the building was written off from |
013 "Buildings, |
||
Tax accounting of liquidation transactions.
|
the name of the operation |
Classification |
Document |
|
|
On the date of the decision that the building will no longer be used |
|||
|
The building is excluded from depreciable property, accrual |
|||
|
On the date of approval by the manager of the demolition results (on the date of registration |
|||
|
Costs are taken into account in the form |
Non-operating |
Fully |
|
|
Work costs taken into account |
Non-operating |
Agreement for |
|
|
Materials have been capitalized |
Non-operating |
Act on |
|
As you can see, there are a lot of nuances when demolishing real estate. Both management and accounting should pay attention to all of them. And it's better to do it before demolition.
The legislation does not specify how to capitalize materials that were received during dismantling during the repair of a fixed asset. In this article we will tell you what documents to draw up and how to reflect such transactions in accounting.
From 2018, it is necessary to pay VAT in a new way on materials that remain after dismantling. In addition, they must be taken into account when calculating income tax. In this article we will show you how to reflect materials in accounting and tax accounting.
Income tax
The cost of dismantling and repair work is recognized in current expenses in the amount of actual costs (clause 1 of Article 260 of the Tax Code). Write them off on the date when you signed the act in form No. KS-2.
Income. Capitalize the materials you received during dismantling. How to determine the cost of inventory items in this case is not stated in the Tax Code.
It is more correct to take into account the remains of materials after dismantling as part of non-operating income as materials received during repairs or modernization (clause 13 of Article 250 of the Tax Code). Capitalize materials at market price. This is the price at which the company can sell these materials. (Clause 5, 6 of Article 274 of the Tax Code).
Some accountants believe that in this situation it is necessary to take into account the materials received in the manner established for property received free of charge (clause 8 of Article 250 of the Tax Code). However, this standard refers to the receipt of materials from outside. This means that applying such a rule for dismantling is not entirely correct.
Other experts believe that it is necessary to apply the rules provided for property that was identified as a result of an inventory (clause 20 of Article 250 of the Tax Code). This option is also not the most suitable.
There is also a problem with what date to reflect non-operating income when receiving materials. The moment of receipt of income is the date of drawing up the act of liquidation of the fixed asset (subclause 8, clause 4, article 271 of the Tax Code). In our case, the company does not liquidate the fixed asset. There are two options here, depending on the terms of the contract for construction work.
The first option is that the contractor transfers all materials to you after the repair is completely completed. Then the date of receipt of income will be the day of signing the act of acceptance and delivery of the object. For example, form No. OS-3 (approved by Resolution of the State Statistics Committee dated January 21, 2003 No. 7).
The second option is for the contractor to transfer the received materials as dismantling work is completed. Draw up a separate act for each batch of materials. For example, according to form No. M-35. The date of this act will be the moment of receipt of non-operating income.
Expenses. When selling leftover materials, you can take them into account in expenses (subclause 2, clause 1, article 268 of the Tax Code). You can also write off materials if you use them in production. In both cases, you need to take the same value that was previously included in non-operating income.
If you sell the received materials, the income must be reflected twice - upon capitalization and upon sale (clause 1 of Article 249, clause 13 of Article 250 of the Tax Code). But there will be no double taxation in this case. After all, income decreases by the amount of expenses.
Accounting
You can reflect the received materials in tax and accounting in the same way so that there are no differences. In accounting, partial dismantling of an object during repair or reconstruction is partial liquidation. It is equated to the disposal of an object (clause 29 of PBU 6/01).
The actual cost of materials received is determined based on the current market value on the date of acceptance for accounting (clause 9 of PBU 5/01). Current market value refers to the amount a company can receive from the sale of materials. Include the cost of received materials in other income (clause 7 of PBU 9/99).
Example 1. How to record materials received during the dismantling of fixed assets
The company is renovating its main asset, the office building, using a contractor. As a result of partial dismantling, materials with a market value of 46,000 rubles were obtained. Subsequently, the company sold them for 50,000 rubles, including VAT - 7,627.12 rubles. The accountant made the following entries:
- 46,000 rub. - materials received during dismantling during repair of the OS were capitalized;DEBIT 62 CREDIT 91 “OTHER INCOME”
- 50,000 rub. - materials obtained during dismantling were sold;DEBIT 91 “OTHER EXPENSES” CREDIT 68 SUBACCOUNT “VAT CALCULATIONS”
- 7627.12 rub. - VAT is calculated on sales;DEBIT 91 “OTHER EXPENSES” CREDIT 10
- 46,000 rub. - the cost of materials sold is written off.
VAT
If you received scrap metal during dismantling, apply the new procedure for calculating VAT when selling such materials. Since 2018, VAT is charged not by the scrap seller, but by the buyer. In this situation, he acts as a tax agent. The tax is calculated using the calculation method based on the value of the scrap under the contract, taking into account VAT (clause 8 of Article 161, clause 3.1 of Article 166 of the Tax Code).
The scrap metal seller draws up an invoice with the note “VAT is calculated by the tax agent” (clause 5 of Article 168 of the Tax Code). On the date of transfer of ownership of scrap metal to the buyer, the seller recognizes revenue in the amount under the contract excluding VAT (clause 1 of Article 248, clause 1, 2 of Article 249, clause 3 of Article 271 of the Tax Code). This income is reduced by the cost that was included in non-operating income when scrap was taken into account (subclause 2, clause 1, article 268, clause 2, article 254 of the Tax Code).
21.10.2016Example 2. How to record the sale of scrap metal
Let's change the conditions of example 1. During dismantling, the company received scrap metal and capitalized it at market value - 70,000 rubles. Then she sold it to a specialized organization for 82,600 rubles, including VAT - 12,600 rubles. The accountant of the selling company made the following entries:
DEBIT 10 CREDIT 91 SUBACCOUNT “OTHER INCOME”
- 70,000 rub. - materials received during dismantling during repair of the OS were capitalized;DEBIT 62 CREDIT 91 SUBACCOUNT “OTHER INCOME”
- 82,600 rub. - sold scrap metal;DEBIT 91 SUBACCOUNT “OTHER EXPENSES” CREDIT 10
- 70,000 rub. - the cost of scrap metal is written off;DEBIT 91 SUBACCOUNT “OTHER EXPENSES” CREDIT 62
- 12,600 rub. - VAT withheld by the tax agent - the buyer of scrap metal is reflected;DEBIT 51 CREDIT 62
- 70,000 rub. (82,600 - 12,600) - money received from the buyer
As a result of the inventory, your company has identified a fixed asset that is damaged, obsolete or physically worn out. As a rule, it is impossible to sell such an object. Then it is dismantled and written off from the register. We will figure out how to carry out and document this operation, draw up transactions, reflect them in the income statement, calculate taxes, including choosing an acceptable position for you with VAT recovery.
Fixed assets involved in the production process gradually lose their original characteristics. Physical wear and tear means deterioration
technical, economic and social characteristics of the object under the influence of the labor process (intensity, features of technology of use, quantity and quality of repairs, level of aggressiveness of the external environment, etc.). Obsolescence (depreciation) is manifested in the fact that the main asset, in its design, productivity, and efficiency, no longer meets the requirements for producing products of the required quality.
Due to physical or moral wear and tear of the fixed asset,
its inability to bring economic benefit, and this is already the basis
to write it off.
Preparation of documentation for disposal of objects
To establish physical and moral deterioration and whether restoration of the object is possible, whether it will be effective and how advisable its further use is, a commission is created by order of the head of the organization. In the future, she gives her opinion and draws up documentation when disposing of objects.
The commission includes relevant officials, including the chief accountant (accountant) and persons who are responsible for the safety of fixed assets. Third-party specialists can be invited to participate in the work of the commission.
(clause 77 of the Guidelines for accounting of fixed assets, approved by order of the Ministry of Finance of the Russian Federation dated October 13, 2003 No. 91n, hereinafter referred to as the Guidelines).
The commission must (clause 78 of the Guidelines):
- inspect the fixed asset subject to write-off using the necessary technical documentation and accounting data;
- identify persons through whose fault the premature disposal of fixed assets occurs, make proposals to bring these persons to justice;
- draw up conclusions on the write-off of fixed assets.
An order to create a commission may look like this.
The commission also decides whether it is possible to continue to use individual components, parts, materials obtained during the dismantling of a retired facility (for example, for routine repairs of working equipment or for sale), evaluates it by quantity and cost, based on market prices, and also ensures safety.
After making a decision to write off an object, the commission draws up a conclusion. There is no standard form for it. Therefore, you can develop a document template yourself. The main thing is that the form contains all the necessary details of the primary document. The form is approved by the manager by order to the accounting policy (Article 9 of the Federal Law of December 6, 2011 No. 402-FZ, clause 4 of PBU 1/2008).
An example of the conclusion of the liquidation commission.
The next step: the head of the organization issues an order to liquidate the fixed asset. There is no standard form of the document; you can use a sample.
After the conclusion of the commission and the order of the manager, it is necessary to draw up an act on the write-off of the property. You can use the standard form No. OS-4 (for cars - No. OS-4a)
or a self-developed form. In the second case, it is necessary that in the document
there were all the necessary details.
Like any other primary documents used in the organization, the selected form is approved by order of the manager.
Based on write-off acts, make notes on the disposal of fixed assets in inventory cards and books that you use to record the storage and movement of fixed assets. This is provided for in paragraph 80 of the Methodological Instructions. As a rule, standard forms are used: an inventory card in form No. OS-6 (when accounting for property separately) or a card in form No. OS-6a (when fixed assets are accounted for as part of groups of objects). Small enterprises use an inventory book according to form No. OS-6b.
When dismantling a fixed asset, you can obtain individual materials, components and assemblies suitable for use. Such property must be capitalized (clause 57 of the Methodological Instructions). To register the receipt of objects received during the dismantling of fixed assets, you can use standard form No. M-35.
How to reflect dismantling in accounting
When liquidating an asset as a result of dismantling, both income and expenses arise. Let's look at how to reflect them in accounting.
Write-off of an object
Write off the object itself from account 01. Also reflect all expenses associated with the liquidation of property. Starting with the month following the liquidation, stop accruing depreciation.
(Clause 22 PBU 6/01).
If the useful life has not yet expired, when the asset is liquidated, its residual value is written off as other expenses. Do this in the period when you have drawn up the liquidation act and completed all the necessary formalities. This follows from paragraph 29 of PBU 6/01 and paragraph 11 of PBU 10/99.
When writing off the residual value of the transaction, the following are:
- reflects the amount of depreciation accrued during the period of operation of the facility;
- the initial cost of the liquidated fixed asset is reflected;
- the residual value of the fixed asset is written off (based on the write-off act).
If the residual value is written off optionally, then without the costs of disassembly and dismantling
not enough.
Reflect these expenses as part of other expenses for the period to which they relate (clause 31 of PBU 6/01, clause 11 of PBU 10/99).
The recording of the expenses for this work depends on who carries out the liquidation of the fixed asset. There are three options.
Option 1. Liquidation is carried out by a special division of the organization. For example, a repair service. Then the wiring is like this:
DEBIT 23 CREDIT 70 (68, 69...)
- expenses for liquidation of fixed assets are reflected;
DEBIT 91-2 CREDIT 23
- expenses for liquidation of fixed assets are written off.
Option 2. The organization does not have a special unit, carry out the liquidation without involving third-party contractors. Therefore, when writing off expenses for the liquidation of a fixed asset in accounting, make the following entry:
DEBIT 91-2 CREDIT 70 (69, 68, 10...)
- expenses for liquidation of fixed assets are taken into account.
Option 3. The contracted contractor liquidates the fixed asset. The costs associated with paying for his services are reflected by posting:
DEBIT 91-2 CREDIT 60
- the costs of liquidation of fixed assets carried out by contract are taken into account;
DEBIT 19 CREDIT 60
- VAT claimed by the contractor who carried out the liquidation of the fixed asset was taken into account.
Accounting for materials received during dismantling
What to do with the remaining materials, for example, completely serviceable spare parts and scrap metal? All these things come at market price. In the future, the materials can be used in production or sold.
For the receipt of materials when dismantling the OS, the wiring is as follows:
DEBIT 10 CREDIT 91-1
- materials received upon liquidation of fixed assets were capitalized.
Sales of materials (scrap) are reflected in accounting as other income. The cost of sold inventories is written off as other expenses. The wiring is like this:
DEBIT 62 CREDIT 91-1
- revenue from the sale of materials (scrap) is reflected;
DEBIT 91-2 CREDIT 10
- the cost of materials (scrap) is written off.
Income Statement and Notes
In the statement of financial results, the written-off residual value of the dismantled fixed assets is indicated on line 2350 “Other expenses”.
In addition, it is reflected in the notes to the balance sheet and the income statement in the section “Fixed assets” in column 6 “Retired objects”.
Other costs associated with the liquidation of a fixed asset (for example, its dismantling, disassembly, etc.) are also indicated in line 2350 “Other expenses” of the Income Statement.
After disassembling or dismantling the equipment, valuables (parts, components, assemblies) may remain that can be used in production. The accountant must capitalize them at market value (possible sale price). This rule is used in both accounting and tax accounting.
The amount of such income is indicated in line 2340 “Other income” of the income statement.
EXAMPLE OF REFLECTION IN ACCOUNTING AND REPORTING OF DISMANTLING OF OS
JSC Tender dismantled and wrote off the machine due to its obsolescence. The initial cost of the machine is 130,000 rubles, accrued depreciation is 40,000 rubles.
After dismantling, materials and spare parts were obtained, which the company plans to use in the future.
Their market value is 50,000 rubles.
The cost of dismantling the machine amounted to 10,000 rubles. Dismantling was carried out by Tender's repair shop.
The Tender accountant must make the following entries:
DEBIT 01 subaccount “Disposal of fixed assets” CREDIT 01
- 130,000 rub. – the original cost of the machine is written off;
DEBIT 02 CREDIT 01 subaccount “Retirement of fixed assets”
- 40,000 rub. – accrued depreciation is written off;
DEBIT 91-2 CREDIT 01 subaccount “Retirement of fixed assets”
- 90,000 rub. (130,000 – 40,000) – the residual value of the machine is written off;
DEBIT 91-2 CREDIT 23
- 10,000 rub. – expenses for dismantling the machine are written off;
DEBIT 10 CREDIT 91-1
- 50,000 rub. – spare parts remaining after dismantling have been capitalized;
DEBIT 99 CREDIT 91-9
- 50,000 rub. (90,000 + 10,000 – 50,000) – reflects the loss from the write-off of the machine.
The cost of liquidating the machine amounted to 100,000 rubles. (90,000 + 10,000). This amount will be shown on line 2350 of the income statement. Income from liquidation in the amount of RUB 50,000. should be reflected on line 2340 of the income statement.
How to take dismantling into account when calculating taxes
If you uninstalled the OS, there are tax implications.
Income tax
When calculating income tax, take into account the costs of liquidation of fixed assets as part of non-operating expenses. This applies to both the residual value of the dismantled fixed assets and expenses in connection with the liquidation of property. The basis is subparagraph 8 of paragraph 1 of Article 265 of the Tax Code of the Russian Federation.
When using the accrual method, take into account the costs in the period in which the act on the completion of work to liquidate the fixed asset was signed. This follows from subparagraph 3 of paragraph 7 of Article 272 of the Tax Code of the Russian Federation.
Using the cash method, reflect liquidation expenses as they are paid, provided there is an act of completion of liquidation work (clause 3 of Article 273 of the Tax Code of the Russian Federation). Both under the accrual method and under the cash method, underaccrued depreciation is written off on the date of execution of the act of write-off of the fixed asset.
If after dismantling the remaining parts or materials are capitalized, then reflect their cost as part of non-operating income on the basis of paragraph 13 of Article 250 of the Tax Code of the Russian Federation. It is necessary to show income regardless of whether the received property will be used in the future in activities aimed at generating income or not (letter of the Ministry of Finance of Russia dated May 19, 2008 No. 03-03-06/2/58).
Under the accrual method, the date of receipt of income will be considered the date of signing the act of liquidation of the fixed asset (subclause 8, clause 4, article 271 of the Tax Code of the Russian Federation). If you use the cash method, reflect income in the form of the cost of raw materials or materials received after the liquidation of the fixed asset, on the date of their capitalization in accounting (clause 2 of Article 273 of the Tax Code of the Russian Federation).
The cost at which raw materials, materials, etc. are reflected in tax accounting, should be determined taking into account market prices. In tax accounting, this will be non-operating income.
When releasing materials into production or subsequent sales, reflect their cost, respectively, as part of material expenses or sales expenses. In this case, the cost that can be taken into account when calculating income tax is defined as the amount that was previously taken into account as part of income (paragraph 2, paragraph 2, article 254 of the Tax Code of the Russian Federation).
Special modes
For firms and entrepreneurs on the simplified tax system with the object “income,” the dismantling of fixed assets does not in any way affect the amount of the single tax (clause 3.1 of article 346.21 of the Tax Code of the Russian Federation). Simplified people with the object “income minus expenses” can write off for tax purposes the costs of dismantling the OS either on their own or with the participation of a contractor (Clause 1 of Article 346.16 of the Tax Code of the Russian Federation).
The dismantling of fixed assets does not affect the amount of UTII, because the base for the single tax is imputed income (Article 346.29 of the Tax Code of the Russian Federation).
Should VAT be restored?
If the contractor who carried out the dismantling is a tax payer, then the amount of tax presented by him can be deducted according to the general rules by virtue of a direct rule - paragraph 6 of Article 171 of the Tax Code of the Russian Federation.
However, officials believe that in connection with the “early” decommissioning of the fixed assets, the company has a VAT obligation: if the useful life of the object has not expired, the payer must restore the amount of input VAT attributable to the residual value of the fixed assets. This was indicated by the Russian Ministry of Finance in a relatively recent letter dated February 17, 2016
No. 03-07-11/8736. Since OS is no longer used in VAT-taxable transactions –
no right to deduction.
If the accountant decides to follow this instruction, he will make the following entries:
DEBIT 91 subaccount “Other expenses” CREDIT 19
- the amount of input VAT on the contractor’s services is included in other expenses;
DEBIT 91 subaccount “Other expenses” CREDIT 68 subaccount “VAT calculations”
- the amount of VAT on the under-depreciated part of the cost of the fixed asset that was dismantled was restored.
One may not agree with the requirement to restore VAT from the residual value of fixed assets. Closed list of grounds on which VAT must be restored (clause 3 of Article 170 of the Tax Code of the Russian Federation)
does not provide for such a basis as decommissioning the OS.
This conclusion is contained in last year’s letters from the Federal Tax Service of Russia dated June 17, 2015 No. GD-4-3/10451
and dated May 21, 2015 No. GD-4-3/8627. In both documents, the tax service relies on the position
decision of the Supreme Arbitration Court of the Russian Federation dated October 23, 2006 No. 10652/06 and to the letter of the Ministry of Finance of Russia dated November 7, 2013
№ 03-01-13/01/47571.
Tax consultantTamara Petrukhina
Capitalization of materials after dismantling fixed assets - postings in this case are recorded in accordance with general accounting procedures. We’ll talk about how to reflect capitalization in accounting and what to pay special attention to in our article.
General procedure for liquidation of fixed assets
Loss or deterioration of the original technical characteristics of the OS during its operation is a normal operating situation. Any working property wears out naturally, and over time its further use becomes impractical. This means that the time has come to make a decision on liquidation.
The procedure for liquidating fixed assets is prescribed in the guidelines for accounting for fixed assets (approved by order of the Ministry of Finance dated October 13, 2003 No. 91). In general it is as follows.
Based on the decision of the manager, a liquidation commission is created, whose specialists will decide the fate of the outdated OS. It is tasked with assessing the technical condition of the facility and making an appropriate decision. If a decision is made to liquidate, then the conclusions made by the commission group are formalized in a conclusion, which indicates the reasons why the further use of the object is considered inappropriate.
After this, the manager signs an order to cease operation and liquidate the OS. This document is the basis for writing off the initial cost of fixed assets and accumulated depreciation.
Based on the order, the chief accountant of the company draws up an act for writing off the object, which is approved by the manager. The act must record the following information:
- on the acceptance of the object on the balance sheet of the enterprise;
- date of production or construction of the facility;
- initial commissioning of the OS facility;
- useful life of the object;
- purchase price of the fixed asset;
- accrued depreciation, revaluations and repairs of buildings, structures, other objects, reasons for disposal, technical condition of main parts and components.
The act can be drawn up not only according to forms OS-4, OS-4a, OS-4b, but also in any form. The legislator allows you to make a choice, determining the most acceptable option. After which the accountant should make a note about the disposal of the fixed asset item by making entries in the inventory cards according to forms OS-6, OS-6a, OS-6b.
Find out how to competently and correctly draw up a deed from the article .
Capitalization of spare parts as a result of liquidation of fixed assets
One of the ways to liquidate an OS is to dismantle the object. It can be carried out both by the organization’s own resources and with the involvement of third parties.
After dismantling, it is necessary to correctly reflect both income and expenses incurred in accounting.
Let's consider various options for liquidating an object by dismantling and the corresponding wiring.
Option 1: liquidation by the organization itself (economic method)
If the liquidation of an OS is carried out by the organization itself, the costs of liquidation are reflected by the posting: Dt 91-2 Kt 70 (68, 69, 10).
If the company structure has a special division and the facility is dismantled by it, costs from accounts 10, 70, 69, etc. are first accumulated in account 23 and only then written off to account 91-2.
Option 2: contract method
If dismantling/liquidation is entrusted to a contractor, the postings will be as follows:
- Dt 91-2 Kt 60 - for the amount of costs;
- Dt 19 Kt 60 - for the amount of VAT claimed by the contractor (unless, of course, he is a special regime agent).
When dismantling the operating system, the company, as a rule, remains at its disposal material - spare parts in various technical conditions, which can be used in further activities or have worn out and are unsuitable for use.
Organizations need to independently assess the suitability of the material and determine the cost of spare parts. Material is accepted for accounting at market price.
IMPORTANT! The market price must be supported by a documented certificate of the average market cost of materials. The certificate can be obtained from an expert organization or it can be drawn up by a company’s specialized specialist who will monitor the cost of similar materials and make an informed conclusion.
Capitalized materials remaining from a liquidated facility can be used in production activities or sold.
The receipt of materials from dismantling is reflected by the entry: Dt 10 Kt 91-1.
Further use in production will be reflected by wiring: Dt 20, 25, 26, etc. Kt 10.
Upon sale, other income will arise in the amount of revenue and other expenses in the amount for which the materials were taken to the warehouse:
- Dt 62 Kt 91-1;
- Dt 91-2 Kt 10.
Find all the nuances of writing off materials in our article.
Materials from the liquidation of fixed assets were capitalized: taxes
Income and expenses when dismantling the operating system will not only be in accounting. They will also have to be recognized for income tax purposes.
Thus, expenses for the liquidation of an operating system are included in non-operating expenses (subclause 8, clause 1, article 265 of the Tax Code of the Russian Federation). Note that on the same basis the residual value of the object being decommissioned is also written off.
The income will be the market value of the materials remaining after dismantling.
The further fate of the inventories obtained in this way will also affect the profit tax. So, when the materials obtained as a result of the liquidation of the operating system are released into production or sold, their cost will go to material costs or sales costs, respectively.
Results
When registering materials remaining from a dismantled OS, it is necessary to act in strict accordance with the law. Namely: create a commission to liquidate an asset, capitalize the material received from liquidation and include it in income, and then take it into account depending on the end use.