Return of funds transferred in excess - transactions in this case will have their own special correspondence. Read about how to correctly account for such funds from the payer and the recipient in our material.
Options for errors requiring a refund and their consequences
In relations between counterparties, errors in the transfer of funds are possible, associated with:
- with the wrong choice of counterparty when generating a payment order;
- indicating an incorrect payment amount;
- reflection in the purpose of payment of the details of a document that does not exist in the relationship.
Such errors can be identified by any of the parties, but will require a mandatory written expression of the initiative of the payer of funds to take actions carried out in connection with their correction.
In a number of situations, the error can be corrected by adjusting the purpose of the payment if, for example, there is a supplier-buyer relationship between the counterparties, against which an erroneously transferred amount (or a payment with an incorrectly specified purpose) may be taken into account. Correction via payment adjustment cannot be applied if there are no current engagement agreements with the payee.
Regardless of the reason for which the payment was considered to have been made without reason, it is recorded by both the payer and the recipient using the same algorithms, taking into account the fact that for these two parties the transactions when returning the erroneously transferred funds will be mirror images.
Since erroneous transfers subject to refund have no connection with the calculations performed between suppliers and buyers, VAT on them is not allocated either for payment or as deductions. However, if calculations are carried out in foreign currency, then exchange differences attributable to income/expenses may arise. The recipient of the funds, when returning them, in the purpose of payment in the payment document should reflect information that this payment is used to return the funds erroneously transferred to him, and provide a link to the details of the document in which the payer expressed a request to return the money to him.
If the error is corrected by taking into account the transferred amount as payment under another supply agreement, then it will be taken into account in the usual manner for supplier-buyer relationships with the implementation of the necessary VAT transactions.
Incorrectly addressed money arrived in the current account: postings
For the recipient of funds to whose current account money was mistakenly received, a posting reflecting the receipt of unidentifiable funds will be made at the time the payment document is linked to the accounting accounts.
A similar amount is debited to account 76, and this is done by posting Dt 76 Kt 51 (52).
Accordingly, if the erroneous payment is returned to the counterparty's current account, the posting will be reversed: Dt 51 (52) Kt 76. The exchange rate difference when returning currency will be reflected by the posting Dt 91 Kt 76 or Dt 76 Kt 91.
If, in relation to a payment reflected as an error, a decision arises to take it into account as payment for a future or already completed sale of goods (performance of work, provision of services), then on the basis of written information received from the payer, an entry will be made Dt 62 Kt 76 with the ensuing hence the VAT implications.
Postings when returning an erroneously transferred payment from a counterparty
The payer has an amount transferred to the wrong counterparty or transferred to larger volume, also goes to account 76: Dt 76 Kt 51 (52) or Dt 76 Kt 60 (if it is no longer possible to correct the posting made according to the payment order).
The return of incorrectly transferred funds from the counterparty in the postings will be expressed as Dt 51 (52) Kt 76. For currency payments, here you will also need to take into account the exchange rate difference, the amount of which will be charged either to the debit or credit of account 91 (Dt 91 Kt 76 or Dt 76 Kt 91).
If, in relation to an erroneous payment, a decision is made to offset it against payment for a delivery within the framework of an existing relationship with the counterparty, then the payment recorded on account 60 will simply change the analytics due to internal posting. In this case, it will be possible to take into account VAT in deductions for both advance payment and delivery.
Results
All actions with a payment transferred to a counterparty by mistake are carried out with a written indication of their nature on the part of the payer. In this case, the funds can be offset against settlements on existing relationships. In the accounting of both the recipient and the payer, the amount of the erroneous payment is reflected in account 76. In correspondence with this account, both parties will show the cash flow for the return: Dt 76 Kt 51 (52) - for the returning party, Dt 51 (52) Kt 76 - at the recipient of the refunded funds. Tax consequences There is no refund for an erroneous payment.
The company listed cash to the supplier. But the bank returned the money for a reason: the recipient’s account does not match the name. what postings need to be made. (the money was returned by the supplier's bank).
Debit 60 Credit 51 – payment to the counterparty,
Debit 76 “Bank” Credit 60 – the fact of incorrect details of the counterparty is reflected
Debit 51 Credit 76 “Bank” - money was returned to the organization’s account.
Oleg the Good, Head of the Department of Profit Taxation of Organizations of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of Russia
What to do if funds were mistakenly debited from your current account
In accounting, reflect the erroneous write-off of funds in the debit of account 76-2 “Calculations for claims” in correspondence with account 51 “ Current accounts"(Instructions for the chart of accounts).
If funds are erroneously written off from the organization's current account, make the following entry in accounting:
Debit 76-2 Credit 51
– an erroneous debit of funds from the organization’s current account is reflected.
Do not include money erroneously written off from your current account as an organization's expenses in your accounting records. This is due to the fact that in relation to such funds the conditions for recognizing expenses given in paragraph 16 of PBU 10/99 are not met.
When returning such funds to the organization’s current account, it is also not necessary to reflect such amounts as income. This is due to the fact that in accounting income is recognized as an increase in the economic benefits of the organization (clause 2 of PBU 9/99). However, in the event that funds previously written off by mistake are received, the organization does not receive any economic benefit. In addition, in relation to these funds, the conditions for recognizing income given in section IV of PBU 9/99 are not met.
Incorrectly received funds in accounting do not belong to the income of the organization. Read how to reflect them in accounting.
Question: Erroneously transferred funds were received to the bank account 07.30.1330.07.13 Postings were made - D 51 - K 76.02 9027 RUR. The balance on D at the end of the period (-9027) is negative. It's right?
Answer: In accounting, the receipt of erroneously transferred funds, which the organization is obliged to return, should be reflected in the debit of account 51 “Current accounts” in correspondence with account 76-2 “Calculations for claims.” In this case, the posting is made: Debit 51 Credit 76-2. The return of erroneously transferred funds is reflected by the entry: Debit 76-2 Credit 51. Erroneously received funds in accounting are not included in the organization’s income and are not included in expenses.
By general rule funds that the organization received into its current account by mistake must be returned. But there are exceptional cases when you can act differently.
The rationale for this position is given below in the recommendations of the Glavbukh System.
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Accounting
In accounting, the receipt of erroneously transferred funds, which the organization is obliged to return, should be reflected in the debit of account 51 “Current accounts” in correspondence with account 76-2 “Calculations for claims” * (Instructions for the chart of accounts).
If funds are incorrectly credited to the organization's current account in accounting, make the following entry:*
Debit 51 Credit 76-2
- funds mistakenly credited to the organization’s current account are taken into account.
Erroneously received funds in accounting do not relate to the organization’s income*. This is due to the fact that in accounting income is recognized as an increase in the economic benefits of the organization (clause 2 of PBU 9/99). However, when erroneously transferred money arrives in the current account, its purpose is not determined. They do not relate to income from common species activities, nor other income (clause 4 of PBU 9/99). The organization is obliged to return them, therefore such amounts cannot be recognized as income in accounting. In addition, in relation to these funds, the conditions for recognizing income given in section IV of PBU 9/99 are not met. An exception to this rule is funds received, which the organization has the right not to return. Reflect them in accounting depending on the purpose of the funds received (advance, accounts receivable With expired limitation period and so on.).
When returning erroneously credited amounts, there is also no need to reflect them as expenses*. This is due to the fact that in relation to such funds the conditions for recognizing expenses given in
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Question
The item was paid for on the bank account by mistake. According to the letter, the amount was returned to the counterparty. How to correctly post the receipt of an erroneous amount and return it?
Answer
In accounting, funds that were mistakenly received into the organization's current account should be reflected by posting Debit 51 Credit 76-2, returned Debit 76-2 Credit 51. When calculating the single tax, amounts received erroneously are not taken into account ().
Rationale
What to do if funds were mistakenly credited to your current account
Accounting
In accounting, the receipt of erroneously transferred funds, which the organization is obliged to return, should be reflected in the debit “Current accounts” in correspondence with “Calculations for claims” ().
If funds are incorrectly credited to the organization's current account in accounting, make a posting*:
Debit 51 Credit 76-2
- funds mistakenly credited to the organization’s current account are taken into account.
Incorrectly received funds in accounting do not belong to the income of the organization. This is due to the fact that in accounting income is recognized as an increase in the economic benefits of the organization (). However, when erroneously transferred money arrives in the current account, its purpose is not determined. They do not relate to income from ordinary activities or other income (). The organization is obliged to return them, therefore such amounts cannot be recognized as income in accounting. In addition, in relation to these funds, the income recognition conditions given in PBU 9/99 are not met. An exception to this rule is funds received, which the organization has the right to. Reflect them in accounting depending on the purpose of the funds received (advance payment, accounts receivable with an expired statute of limitations, etc.).
When returning erroneously credited amounts, there is also no need to reflect them as expenses. This is due to the fact that in relation to such funds the conditions for recognizing expenses given in PBU 10/99 are not met.
In accounting, reflect the return (write-off) of funds previously credited to the current account by mistake by posting*:
Debit 76-2 Credit 51
- funds previously erroneously credited to the organization’s current account are written off.
This is stated in the Instructions for the chart of accounts (,).
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Erroneously received amounts do not form taxable income of the organization ()*. They do not relate to either sales income or non-operating income (Article , Tax Code of the Russian Federation). These amounts are not recognized as economic benefits of the organization (). In the book of accounting of income and expenses, approved