In the course of the activities of each company, there are always settlements with suppliers, credit institutions, the Federal Tax Service and its own personnel.
The accumulated debt to counterparties is called accounts payable and allows for the time specified in the concluded agreements to defer the fulfillment of obligations assumed by the enterprise, balancing the intensity of financial flows.
Sometimes, due to various circumstances, debts to creditors are not repaid. Such debts remaining unpaid after a certain time must be written off as other income of the company, but this procedure is very responsible and, as a rule, attracts the attention of tax authorities. That is why Special attention The accountant must be drawn to ensure compliance with the legal requirements of all stages of the write-off operation accounts payable(KZ).
Overdue debts
In accounting, KZ is recorded in accounts and in financial statements before the fact of its repayment. However, a debt that arose to a partner company and for some reason was not claimed by it during the legislative period deadline(possibly upon liquidation of the creditor), is considered an expired accounts payable limitation period. It is written off and must be reflected as part of other income.
An important circumstance here is the correct determination of the period when this can and should be done.
Defined by law three year period of time, after which you can write off the debt. The beginning of its calculation is different in different circumstances. For example, if, upon concluding a contract, the contractor is obliged to pay for goods/services within a certain time period, then the limitation period begins to count from the moment it expires.
If the agreement does not specify the date of payment for the services provided, then the limitation period begins from the day the creditor made a demand for payment of obligations. True, if he has set a time for their fulfillment in the requirement, the countdown begins from the moment when it ends.
The claim period can be interrupted if the debtor acknowledges the existence of a debt, he signs a deferment, a statement of reconciliation of accounts, and pays part of it or accrued interest. After such actions, the initial countdown of the statute of limitations ends, and from the moment of interruption it begins again.
General period of claim limited 10 year period, i.e. it cannot continue for more than this time.
Conditions for writing off debt from previous years
Overdue debt is written off for each agreement separately. To do this, you need documents confirming its availability.
- act of inventory of obligations ();
- an internal document that correctly substantiates the reasons for writing off the debt.
Despite the fact that the company's obligations are inventoried annually at the end of the financial period, the head of the company has the right to determine additional reasons for its implementation. This could just be the presence of overdue debts. Therefore, the first operation in the process of writing off a contract is to conduct an audit, perhaps even only for individual counterparties.
Based on the results of the inventory, a statement of settlements with creditors is drawn up, where the necessary information is reflected for each of them:
- full company name;
- debt accounts;
- sum;
- dates of reconciliation, or a note about its absence or existing disagreements;
- carrying out mutual settlements with the creditor, etc.
The document is drawn up in 2 copies and certified by the signatures of members of the inventory commission.
Accounting information
In order to write off an expired claim, in addition to the inventory act, it is also necessary to document the fact of its formation. More often than not, this justification is accounting information, drawn up on the basis of accounting registers and primary documents confirming the existing debt (for example, contracts, reconciliation reports, etc.). It must indicate the timing and reasons for the formation of the debt, its amount, as well as the details of the counterparty.
Signs the certificate Chief Accountant companies.
Order
Based on the listed documents, the director of the company issues a written order, which is the basis for writing off the overdue contract. This order is drawn up on company letterhead, signed by the manager and sealed (if used in the organization).
The text of the order must contain a link to internal company documents confirming the existence of the debt and justifying the legality of writing off the debt. Only after receiving the order, the accountant has the right to write off the debt in accounting - tax and accounting.
Features of debt write-off in accounting
The amount of debt is written off from the account in which it was recorded. These are usually settlement accounts. The operation is formalized by posting D/t 60, 62, 66, 71, 76 – K/t 91-1.
It is important to write off in the period in which the claim period expired. This will alleviate the questions of the tax authorities, since they believe that the expired tax bill should be included in the enterprise’s income precisely in the period when the statute of limitations has expired and this must be done regardless of whether the necessary supporting documents have been drawn up.
Thus, even in the absence inventory list and the order to write off, it is advisable to include the amount of the claim in taxable income on the last day of the reporting period when the claim period expired.
Upon liquidation of a creditor
Sometimes the occurrence of overdue debt in a company provokes the loss of the status of an operating organization by the creditor enterprise.
We will not focus on the reasons for this phenomenon, we will only note that in this case the company must write off the debt on the date indicated in the Unified State Register of Legal Entities and records the fact of liquidation of the creditor company.
The same applies if the creditor is excluded from the Unified State Register of Legal Entities as an inactive legal entity: the date of debt write-off will correspond to the date of entry in the state register.
Debt forgiveness
In exceptional cases, the creditor company may forgive the debt. This happens with the withdrawal of assets, which is practiced today, as effective way saving business.
The algorithm of actions here is as follows:
- counterparties draw up, date and sign a debt forgiveness agreement;
- or the creditor sends a document confirming that the debt has been forgiven.
In the first case, the company will date the write-off of accounts payable in accordance with the same date specified in the debt forgiveness agreement. In the second scenario, the date of write-off will be the date of receipt of the document indicating forgiveness of the short-term liability.
Procedure for enterprises using the simplified tax system
In the tax accounting of “simplers”, the written off debt is also included in the income of the same period when the claim period for debt collection expired.
At the same time, writing off debts on taxes, contributions and fines does not need to be included in income under the simplified tax system (as under other taxation systems). In addition, under the simplified special regime, advances for undelivered goods/services are not included in income, since they were previously reflected in income.
Example:
LLC "Yashma" under the simplified tax system "Income minus expenses" received from TC "Rhythm" goods in the amount 59000 rub.. (including VAT - 9,000 rubles) in March 2012. According to the terms of the agreement, they must be paid before March 20, 2012, but the LLC did not make the payment within this period. For 3 years, TC "Rhythm" made no attempts to recover the amount of the contract from the counterparty. On March 20, 2019, the statute of limitations expired.
In this regard, the director of Yashma LLC decided to write off the debt. For this purpose, on March 20, 2015, an inventory of obligations was carried out, an inventory report and an accounting document were drawn up. certificate, a corresponding order has been issued.
The following entries were made in the accounting of Yashma LLC:
- in March 2012
- D/t 41 K/t 60 – for 59,000 rubles. goods arrived;
- in March 2019
- D/ 60 K/t 91-1 – written off KZ for unpaid delivery in the amount of 59,000 rubles.
In tax accounting, written-off short-term debt in the amount of 59,000 rubles. The accountant included it in income on the expiration date of the statute of limitations - March 20, 2019 and made a note in the KUDiR on the same day.
In the event of accounts payable associated with the acquisition of inventory items, including the amount input VAT, the enterprise’s income includes the full amount of debt, including tax. At the same time, the simplifier cannot write off the cost of unpaid supplies as expenses, even if it is sold. This is the requirement of legislators: under the simplified tax system, the costs of purchasing goods are taken into account if they have been paid.
The exception is the liquidation of the creditor. In this option, the obligations are terminated not through the fault of the debtor, but due to the liquidation of the partner, and the goods are considered paid in full. These amounts can be completely legally attributed to expenses under the simplified tax system. Goods for which the outstanding payment has been forgiven are also considered paid.
Let's look at an example:
The enterprise received an advance of 100,000 rubles using the simplified tax system in June 2019. for execution works specified in the agreement. The obligations were not fulfilled; the statute of limitations expired in June 2019.
Having documented the write-off of the overdue bill, the accountant reflects the transaction in the records And:
- in June 2019 – D/t 51 K/t 62 – 100,000 rub. (an advance payment has been received, confirmed by a bank statement);
- in June 2019 – D/t 62 K/t 91-1 – 100,000 rub. (debt written off based on executed documents and director’s order.
Since simplified firms take into account the income received on the day the money is credited to the account or received at the cash desk, the amount of the advance was recognized as income back in June 2019. Therefore, when writing off the bill in June 2019, it cannot be re-attributed to income. And since the company also did not incur expenses, this amount will not be recognized as expenses.
We talked about what the limitation period is, how it is calculated, when it is suspended or interrupted. In this article we will talk about writing off debt for which the statute of limitations has expired.
Why do you need to write off debt?
It is indicated that receivables or payables for which the statute of limitations has expired are written off for each obligation on the basis of inventory, written justification and order of the manager. Written off debts are attributed to financial results organization as part of other income (when writing off a creditor) and other expenses (when writing off accounts receivable). If a reserve was created for doubtful accounts receivable, such debt is written off against the reserve. Expenses will include only that part of the debt for which the reserve was not enough.
It is possible to write off accounts receivable and payable ahead of schedule limitation period, if such debts are considered unrealistic for collection (repayment). This is possible, for example, when the debtor is excluded from the Unified State Register of Legal Entities in the event of liquidation.
The write-off of accounts payable in accounting can be reflected by the following entries ():
Debit of accounts 60 “Settlements with suppliers and contractors”, 70 “Settlements with personnel for wages”, 76 “Settlements with various debtors and creditors”, 67 “Settlements for long-term loans and loans”, etc. - Credit to account 91 “Other income and expenses”, subaccount “Other income”
And the write-off of receivables upon expiration of the limitation period will be reflected as follows:
Debit account 91, subaccount “Other expenses” - Credit accounts 62 “Settlements with buyers and customers”, 71 “Settlements with accountable persons”, 76, etc.
If accounts receivable are written off using funds from a previously created reserve, instead of account 91, account 63 “Provisions for doubtful debts” is debited.
However, writing off receivables due to the debtor's insolvency does not lead to complete cancellation of the debt. Such a debt must be listed on the balance sheet for 5 years from the date of writing off the debt in case of its collection in the event of a change in the debtor’s property status (paragraph 2, paragraph 77 of Order of the Ministry of Finance dated July 29, 1998 No. 34n).
This means that the amount of written off receivables is accounting entry(Order of the Ministry of Finance dated October 31, 2000 No. 94n):
Debit of account 007 “Debt of insolvent debtors written off at a loss”
Tax accounting for debt write-off
When calculating income tax, the amount of accounts payable written off due to the expiration of the statute of limitations or for other reasons is included in non-operating income (
An organization's accounts payable are its debts to other organizations, individuals, the budget or off-budget funds. The presence of a “creditor” is a common picture for any company. Accounts payable is the simplest way to finance the activities of organizations, since it essentially represents a deferred obligation to pay Money or transfer of other assets. We will tell you what entries are made for accounts payable in our consultation.
How are accounts payable accounted for?
Postings for accounts payable, i.e. accounting records, as a result of which accounts payable arises, are formed according to the credit of accounts for accounting settlements according to the Chart of Accounts (Order of the Ministry of Finance of the Russian Federation dated October 31, 2000 No. 94n), i.e., according to accounts 60-79.
Here are typical accounting entries associated with the occurrence of accounts payable:
| Operation | Account debit | Account credit |
|---|---|---|
| Products purchased | 41 "Products" | 60 “Settlements with suppliers and contractors” |
| Advance received from buyers | 51 " Current accounts» | 62 “Settlements with buyers and customers” |
| Received a short-term loan for materials | 10 "Materials" | 66 “Settlements for short-term loans and borrowings” |
| Received a long-term loan in foreign currency | 52" Currency accounts» | 67 “Calculations for long-term loans and borrowings” |
| Property tax assessed | 91 “Other income and expenses” | 68 “Calculations for taxes and fees” |
| Accrued insurance premiums from salary | 20 "Main production" | 69 “Calculations according to social insurance and provision" |
| Employees' wages accrued | 44 “Sales expenses” | 70 “Settlements with personnel for wages” |
| A fine must be paid to the supplier | 91 | 76 “Settlements with various debtors and creditors” |
Repayment of accounts payable
Accounts payable are usually reduced when they are repaid. In this case, accounts payable accounts are debited and cash accounts are credited:
Debit accounts 60, 62, 70, 68, etc. – Credit accounts 50 “Cashier”, 51, 52, etc.
Write-off of accounts payable: postings
Accounts payable are written off after the expiration of the statute of limitations or in other cases when such debt becomes unrealistic for repayment (for example, when the creditor is excluded from the Unified State Register of Legal Entities). In this case, the accounting records reflect the following entry:
Debit accounts 60, 62, 66, 71, etc. – Credit account 91
You can read more about writing off expired debt in.
In the event that an enterprise arises and fails to repay debts to its creditors within a certain period of time this debt goes into the category of expired. If the creditor does not claim the overdue debt within the established period of time in judicial procedure, in this case, accounts payable is written off.
Grounds for the write-off procedure
There are the following grounds for writing off a company's debt to its creditors in the following cases:
- the expiration of the period specified for the limitation period (under Article 196 of the Civil Code of the Russian Federation - three years);
- termination of the creditor's activities (Article 419 of the Civil Code of the Russian Federation);
- when a creditor decides to forgive his debtor amounts of debt (Article 415 of the Civil Code of the Russian Federation);
- upon the occurrence of events for which the creditor and debtor cannot be held responsible (Article 416 of the Civil Code of the Russian Federation);
- when when issuing the act government agency it is impossible for the debtor organization to fulfill its obligations (Article 417 of the Civil Code of the Russian Federation);
- if the organization's creditor is individual, then in the event of his death (Article 418 of the Civil Code of the Russian Federation).
Debt write-off procedure
The correctness of the procedure for writing off debt to creditors affects the accuracy of profit calculation in tax accounting and the accrual of penalties. As a result, the management of the enterprise should take a responsible approach to organizing the procedure for writing off its debts.
The entire procedure for writing off debt consists of the following steps, presented in Table 1.
Table 1. Debt write-off procedure
| Stages | Who carries out | The essence of the stage | Documents are being prepared | Note |
|---|---|---|---|---|
| 1 | Accounting staff of a business entity | At the end of the reporting period, an inventory procedure is carried out, during which the amounts of accounts payable are identified, incl. and overdue | Inventory acts (form INV-17) | To ensure timely identification of accounts payable amounts, it is recommended to conduct an inventory on a regular basis. When carrying out the inventory procedure in general complex measures to write off debt to creditors, all accounts in which the organization keeps records of payables and receivables are checked. During the debt inventory, attention is paid to debt to the budget and extra-budgetary funds. |
| 2 | Enterprise accounting staff | Prepare a certificate reflecting information about the identified amounts of accounts payable, incl. and with expired statutes of limitations; | Reference | Help prepared accounting service business entity must contain the following information:
|
| 3 | Head of a business entity | An order to write off debt to creditors is prepared and issued | Order to write off existing debt to creditors | An order to write off debt to creditors must contain required details And necessary information:
The order is prepared on the basis of the results of an inventory of debts with expired claims and a certificate prepared by the accounting staff of the given business entity. |
| 4 | Accounting staff | Make accounting records for debt write-offs | Make changes to accounting registers | Changes made to accounting registers are carried out in accounting and tax accounting. The write-off of obligations to creditors is reflected in the accounting when the statute of limitations expires, otherwise the accounting department must be presented in the following reporting period updated tax return. Write-off of obligations to creditors is carried out for each existing overdue obligation. |
From the presented steps for writing off debts, it is clear that in the process of implementing this procedure, the preparation of certain documents is necessary.
Reflection in accounting
Write-off of obligations to creditors after the expiration of the statute of limitations is issued on the credit of account 91/1 and on the debit of those accounts on which it was recorded:
- the write-off of overdue debts to suppliers is reflected - D 60;
- before other creditors - D 76;
- before payroll personnel - D 70, etc.
Accounts payable is the debt of an organization (debtor) to third parties (creditors). This includes debt to: suppliers, employees of the organization for wages, budget, state extra-budgetary funds, for loans received and other creditors.
Accounts payable are terminated if the obligation is fulfilled or written off as unclaimed.
Write-off of accounts payable is possible if:
- the expiration of its statute of limitations;
- impossibility of fulfilling the obligation or liquidation of the organization;
- unreality of collection.
Example of writing off accounts payable in transactions
Let's look at how to write off accounts payable using an example:
Company “A” had a debt to the supplier - 12,000 rubles for 2010. . .2014 the supplier decided to write it off.
The following entry was made in the accounting department of Company “A”:
Accounting for overdue accounts payable
Overdue accounts payable- this is the debt of an organization, the obligations for which were not repaid within the period established by the contract.
Write-off of overdue accounts payable from previous years is carried out only after an inventory has been carried out. Its size is also determined based on the results of the inventory and can be included in the revenue part on the basis of an order from the head of the organization.
If an inventory has not been carried out and the act recording the expiration of the limitation period has not been drawn up, and the manager has not issued an order for write-off, then this is a violation of the rules accounting. In such a situation, debts to creditors cannot be recognized as bad; therefore, the organization has no right to include them in income.
The limitation period begins from the moment the organization discovers a violation of its rights. The organization has the right to write off accounts payable on the day following the day the three-year period begins.
Suspension of the limitation period is possible in case of signing a reconciliation act or partial repayment of the debt.
Postings for writing off an overdue creditor
Let's look at an example:
10/01/2010 Company “A” received an advance from the buyer - 350,000 rubles. (- 50,000 rub.). According to the contract, the goods must be shipped within 30 calendar days from the date of receipt of advance payment from him. Company "A" did not fulfill its obligation to ship the goods.
Based on the results of the inventory of settlements carried out on October 30, 2013, the head of Company “A” issued an order on the need to write off accounts payable, the basis was the expiration of the statute of limitations. Postings:
| date | Account Dt | Kt account | Sum | Contents of operation | Document |
| 01.10.2010 | 350000 | Receiving an advance for the supply of goods | Payment order | ||
| 01.10.2010 | 76/ “VAT on advances” | 68/ “VAT calculations” | 50000 | VAT accrual on the amount of advance received | Payment order |
| 30.10.2013 | 62/ “Advances received from the buyer” | 91/ “Other income” | 350000 | Accounts payable are reflected in income | |
| 30.10.2013 | 91/ “Other expenses” | 76/ “VAT on advances” | 50000 | VAT on advance payment is included in expenses | Manager's order, reconciliation report |
The amount of accounts payable is reflected in other income of Company “A”, and VAT is included in accounts payable and is included in other expenses.