Stels 20.11.09 00:13 Currently on topic
An attempt to set the “Maintain Batch Accounting by Series” attribute for a specific item will lead to the fact that the cost of its write-off will no longer be calculated “on average” according to accounting policy...and for this particular series, which is incorrect.
Not entirely true statement. A typical configuration software implements one of the accounting options, which simply does not meet the requirements of a particular organization. With an “average” accounting policy, you can keep records both by item and by series of items - this depends on the accounting policy adopted at the enterprise. If the accounting policy of an organization differs from the method implemented in a certain configuration, then this is not a reason to claim that it is not working correctly - this is a reason to modify the configuration for accounting in the organization. And nothing more.
() It was not for nothing that senior Western management chose the policy of calculating costs “on average”; they understand that this makes it possible to manage more flexibly pricing policy and, as a result, the profitability of the enterprise.
In addition, an error when selecting a series of items in the sales document can lead to the fact that the sale will be reflected in accounting as a sale of consignment goods, but will not be included in the report to the consignor when it is automatically filled out, because the series does not correspond to the original one (from the batch document).
I don't see the problem either. With serial accounting, a series of a specific item, and not the item itself, becomes an accounting element. Therefore, when selling the same series, which was received through purchase and sale and acceptance for commission, it is not a fact that it is the batch of the series accepted for sale that will be written off, perhaps the batch of the purchased batch of this series has been written off - then it will not be included in the report to the consignor. I think it’s worth taking a closer look at the batches of received series, and then compare them with the batches sold, and then everything will fall into place.
Vvr908 405 21.11.09 22:27 Currently on topic
()
Maybe I am not competent enough in this matter, but it always seemed to me that accounting policies for the same period cannot provide for various write-off methods for inventory items different types. Those. if the inventory valuation upon write-off is made according to average cost, then it should always be the same - regardless of whether batch accounting by series is maintained or not for a given specific item. And violating this principle, it seems to me, is incorrect. If I am wrong, then I am ready to accept reasoned objections.
Therefore, when selling the same series, which was received through purchase and sale and acceptance for commission, it is not a fact that it is the batch of the series accepted for sale that will be written off, perhaps the batch of the purchased batch of this series has been written off - then it will not be included in the report to the consignor.
The thing is that this is not the same series received different ways. It could be two totally different series received according to different posting documents. And the automatic selection of batches completely ignores the fact that the system has a constant “Strategy for writing off batches by status.” He has his own selection criteria - expiration date, for example. And if he finds a series with more early suitability, he will frame her, even if she never acted under a commission agreement. Because of this, according to batch accounting, the sale of goods will be carried out with the status “Accepted”, and a completely different series will be entered in the sales document. And it won’t be included in the report to the committent.
Stels 22.11.09 02:55 Currently on topic
Those. if the assessment of inventories upon write-off is made at the average cost, then it should always be the same - regardless of whether batch accounting is maintained by series for a given specific item or not
If there are no legislative regulations on the subject of not taking into account the series when accounting on average (and I don’t know of any such yet, if there are, I will be glad to receive a link), then any of the approaches can be implemented. Both of them are correct and the choice depends only on the accounting policy of the organization (in the sense of taking the series into account when calculating on average or not). When accounting medicines, as far as I know, accounting for nomenclature by series is mandatory, therefore the average can be calculated both taking into account the series and by nomenclature - in a standard UT, perhaps, an option is implemented taking into account the series (I haven’t personally checked). I think that if you disable the “Keep batch records by series” flag and leave the “Keep records by series” flag (there are also 2 details), then there will be just the right option - average accounting without taking into account the series. These are all my arguments on this matter.
The thing is that this is not the same series, arrived in different ways. These may be two completely different series, received according to different capitalization documents. And the automatic selection of batches completely ignores the fact that the system has a constant “Strategy for writing off batches by status.” He has his own selection criteria - expiration date, for example. And if he finds a series with an earlier expiration date, he will substitute it, even if it was never received under the commission agreement. Because of this, according to batch accounting, the sale of goods will be carried out with the status “Accepted”, and a completely different series will be entered in the sales document. And it won’t be included in the report to the committent.
If I understand correctly, then...
"Strategy for writing off batches of goods by status" is set to "First accepted, then own"
1. Automatic selection includes the series with the shortest expiration date, the batch of which has the “Purchased” status, ignoring the fact that the strategy has been set.
2. After the sale, the series indicated in the document and in the register entries differ from each other.
3. The status of the batch of the series indicated in the document is “Purchased”, and in the transactions in the batch register the status is “Accepted”.
So?
What does average cost, FIFO and LIFO mean? Which write-off method is better?
Each method of estimating the cost of materials has its own advantages, so the organization must independently select and consolidate in its accounting policies one of the methods (FIFO, at average cost, at the cost of each unit).
Detailed information on methods for estimating the cost of materials is contained in the materials of the Glavbukh System.
Cost estimation methods
To determine the price of materials decommissioned (production), that is, the amount that is debited from account 10, the organization must choose one of the methods for valuing them:
The choice of method for estimating the cost of written-off materials should be fixed in the accounting policy for accounting purposes.*
Estimation at cost of each unit
When using the method of estimating the cost of materials at the cost of each unit, it is assumed that it is always known exactly from which supply this or that unit of materials was taken. In this case, the organization has the opportunity to determine the cost of each unit written off.*
There are two ways to form the cost of materials written off based on this method:
- the cost includes all costs associated with the purchase of materials;
- The cost includes only the contractual cost of materials. In this case, transportation, procurement and other costs associated with the acquisition of materials must be distributed in proportion to the cost of written-off materials.
An organization should apply this method to materials for which one unit cannot easily replace another. For example, an organization is required to use this method to account for precious metals, gemstones, radioactive substances and other similar materials.
An example of calculating the cost of written-off materials using the valuation method based on the cost of each unit of inventory
FIFO method
With the FIFO method, materials written off for use (production) are valued at the cost of the first batch purchased (from those available in the warehouse). Therefore, evaluate write-off materials first at the cost of the balance of materials at the beginning of the month, then from the first purchase, the second, etc.* Such rules are established in paragraph 76 Guidelines, approved .
To apply this method, each newly received batch of homogeneous materials is reflected as an independent group, regardless of whether such materials are registered or not.
The FIFO method is beneficial to use in a situation of constant decline in prices for materials. In this case, the cost of written-off materials will be the highest, and the cost of materials on balance will be minimal.*
The cost of decommissioned materials (production) can be calculated:
- weighted assessment method;
- simplified weighted assessment method;
- using the rolling assessment method.
With a weighted assessment at the end of the month, after the receipt and consumption of materials have been calculated, you need to determine at what price each write-off occurred. This is done based on a literal understanding of the FIFO method, that is, materials are first written off from the balance at the beginning of the month, after its use - from the first receipt, the second, etc.
With a simplified weighted assessment at the end of the month, you need to determine the cost material resources in stock (in warehouse). The balance should include the last purchased materials. This means that the price of the remaining materials is determined by the cost of the last delivery, and if it is insufficient, by the penultimate one, etc. After the cost of the remaining materials is determined, the cost of all written-off materials can be calculated using the formula:
This method allows you to quickly determine the cost of written-off materials and their balances when large quantities expenses in small batches within a month.
With rolling valuation, the cost of materials is determined before each write-off. This method is the most labor-intensive for manual processing, especially on large organizations, but automation of accounting partially eliminates this problem. The advantage of this method is that it allows you to determine the cost of written-off materials before the end of the month.
paragraph 78 and appendix 1 by order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n.
After determining the total cost of scrapped materials, determine the average cost per unit of materials:
It will be needed when generating entries for the write-off of materials in a certain quantity (Appendix 1 to the Methodological Instructions, approved by Order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n).
An example of calculating the cost of written-off materials using the FIFO method
Average cost valuation method
When using the average cost valuation method, determine the cost of written-off materials using the formula:
The advantage of this method is the stable price of materials sold, even if there are sharp fluctuations purchase prices.*
The cost of written-off materials can be calculated:
- weighted assessment method;
- using the rolling assessment method.
With a weighted assessment, the average price of written-off materials is determined once at the end of the month.
With a rolling valuation, the price of materials is determined before each write-off. In this case, only those deliveries that were capitalized at the time the materials were written off are taken into account. This method is the most labor-intensive for manual processing, especially in large organizations, but accounting automation partially eliminates this problem. The advantage of this method is that it allows you to determine the cost of written-off materials before the end of the month.
Such clarifications are contained in paragraph 78 and Appendix 1 to the Methodological Instructions, approved by Order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n.
When writing off materials in a certain quantity, create entries based on the average cost of a unit of materials (Appendix 1 to the Methodological Instructions approved by Order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n).
An example of calculating the cost of written-off materials using the average cost valuation method
Sergey Razgulin,
Actual State Councilor of the Russian Federation, 3rd class
Since January 1, 2008, all references to the LIFO method from regulatory documents according to accounting are excluded (Order of the Ministry of Finance of Russia dated March 26, 2007 No. 26n). Therefore, starting from this date, the LIFO method is not used in accounting. It has been preserved in tax accounting (clause 8 of Article 254 of the Tax Code of the Russian Federation).
LIFO principle
The LIFO method is based on the assumption that during a certain period, goods are sold in the reverse order of their acquisition (receipt). That is, goods that are sold first are valued at the cost of the most recent acquisitions. In this case, the value of the balance of goods at the beginning of the period is taken into account. If the number of goods in the last batch is less than those sold, then for the calculation take the cost of goods from the penultimate batch, etc.*
Elena Popova,
state councilor tax service RF rank I
Currently, for accounting purposes, the following methods are used to estimate the cost of inventory:
- at the cost of each unit;
- at average cost;
- at the cost of the first material acquisitions in time inventories(FIFO method).
For purposes tax accounting An organization may use the following methods for assessing inventories upon disposal:
- valuation method based on the cost of a unit of inventory;
- average cost valuation method
- valuation method based on the cost of first acquisitions (FIFO);
- valuation method based on the cost of recent acquisitions (LIFO).
- when determining size material costs when writing off raw materials and materials used in the production (manufacturing) of goods (performing work, providing services), the methods are enshrined in paragraph 8 of Article 254 of the Tax Code of the Russian Federation;
- When selling purchased goods, the methods are enshrined in clause 3, clause 1 of Art. 268 Tax Code of the Russian Federation;
- upon sale or other disposal valuable papers the methods are enshrined in clause 9 of Art. 280 Tax Code of the Russian Federation.
This is explained by the desire to bring domestic accounting standards closer to international ones. However, for tax purposes, four methods of valuing inventories are still used.
Let us briefly describe each of the methods.
At the cost of each unit Inventory materials used by the organization in a special manner are assessed ( precious metals, precious stones, etc.), or supplies that are not normally interchangeable. This method is used in exceptional cases or with a small range of inventory items. It is characterized by particular labor intensity, provided that it is used in enterprises with a large product range.
For example.
The company produces cabinet furniture. The balance at the beginning of the stained glass month is 5 sheets in the amount of 125,000.00 rubles.
During the month, the following was purchased: 3 sheets of stained glass for the amount of 84,000.00 rubles.
Transportation costs are included in the cost and amount to 3,000 rubles.
Within a month, 2 sheets from the remainder were used, 1 sheet from the supply of stained glass.
Let's determine the actual cost of the balance: 125,000 / 5 = 25,000 rubles per sheet;
Let's determine the actual cost of receipt: (84,000 + 3,000) / 3 = 29,000.00 rubles per sheet;
The cost of raw materials consumed in the production process per month will be: 25,000 * 2 + 29,000 = 79,000 rubles.
As the example shows, when using this method there is no need to produce additional calculations. If it is possible to accurately determine which materials are used in production, the use of this method has advantages, since materials are written off at their real cost, without deviations.
Average cost calculation is made by dividing the total cost of a group (type) of inventory by its quantity, which consists of the cost and the amount of balance at the beginning of the month and the inventory received during the month. This method is the most common and is included in standard versions of accounting programs.
For example, an organization is engaged in the production of cabinet furniture. The balance of chipboard at the beginning of the month is 300 sheets in the amount of 600,000.00 rubles.
During the month, receipts were made in several batches, including:
- 100 sheets in the amount of 180,000.00 rubles;
- 50 sheets in the amount of 105,000.00 rubles.
Let's calculate the average cost of one sheet of chipboard: (600,000 + 180,000 + 105,000) / (300 + 100 + 50) = 885,000 / 450 = 1,966.67 rubles per sheet.
Let's calculate the cost of chipboard written off for production: 410 * 1,966.67 = 806,334.70 rubles.
The balance of chipboard at the end of the month will be 300 + 150 - 410 = 40 sheets in the amount of 40 * 1,966.67 = 78,666.80 rubles.
P using the FIFO method Inventories that are the first to enter production (sale) are valued at the cost of inventories that were first acquired in time, taking into account the cost of inventories listed at the beginning of the month. Thus, the sequence of write-offs when applying this method is as follows: first, balances at the beginning of the period are written off, then the first batch, then in order. Otherwise, this method can be called a conveyor method. In conditions of rising prices for purchased materials, the cost of purchased products is minimal, while the assessment of inventories and profits is maximum. And when prices fall, on the contrary, inventories and profits are minimized.
When using the FIFO method when calculating the cost of materials released into production, you can use one of the following methods:
The first method is based on writing off the cost of each batch in order: first, the cost of the balance is written off, if the amount of materials written off is greater than the balance, the first batch received is written off, then the second and subsequent ones. The balance of materials is determined by subtracting the cost of written-off materials from the total cost of materials received during the month (taking into account the balance at the beginning of the month).
The second method is based on determining the balance of materials at the end of the month at the price of the most recent purchase. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).
Using the conditions of the previous example, we will calculate using the FIFO method using two options.
Option 1:
Written off for production:
300 sheets in the amount of 600,000.00 rubles; 100 sheets in the amount of 180,000.00 rubles; 10 sheets worth 21,000.00 rubles. Total: 801,000.00 rubles. The balance at the end of the month is 40 sheets in the amount of 84,000.00 rubles.
Option 2:
The balance of chipboard at the end of the month is 40 sheets (300 + 150 - 410), the entire balance from the second batch. Accordingly, the cost of the balance is: 84,000.00 rubles;
Let's calculate the cost of written-off chipboard: 600,000 + 180,000 + 105,000 - 84,000 = 801,000.00
The average cost of one sheet of chipboard written off for production is 801,000 / 410 = 1,953.66 rubles per sheet.
With the LIFO method Inventories that are the first to enter production (sale) are valued at the cost of the last in the acquisition sequence. The LIFO method is the opposite of the FIFO method. In conditions of rising prices - a minimum estimate of reserves and profits. In conditions of falling prices - maximizing inventory valuation and profit.
There are two ways to calculate the cost of materials released into production using the LIFO method. The methods are similar to those above for the FIFO method, with the difference that for the first calculation option the cost of the last received batch is used, then the batches are written off in reverse order. The cost of the earliest purchased batch is used to determine the closing balance. For brevity, we will use the last method of calculation.
The conditions of the example are the same.
The balance of chipboard at the end of the month is transferred from the balance at the beginning of the month, since 410 sheets of chipboard were used for production, of which 50 sheets were from the last batch, 100 sheets from the first batch, 260 sheets from the balance at the beginning of the month.
So, the balance will be 40 sheets at a price of 2000 rubles per sheet, in the amount of 80,000.00 rubles.
Let's determine the cost of chipboard used for production: 600,000 + 180,000 + 105,000 - 80,000 = 805,000.00
The average cost of 1 sheet of chipboard written off for production is 1963.41 rubles.
Let us make a reservation that in practice there are two options for using the methods of average estimates: actual cost Inventories when released into production or written off for other purposes:
The first involves a weighted assessment based on the average monthly actual cost; in this case, the calculation includes the quantity and cost of materials at the beginning of the month and all receipts for the month (reporting period).
The second method is based on determining the actual cost of the material at the time of its release (rolling estimate); in this case, the average estimate is calculated based on the quantity and cost of materials at the beginning of the month and all receipts until the time of release.
Thus, the choice of the date on which the inventory is assessed determines the difference between the weighted and rolling assessment.
The use of a rolling assessment must be economically justified and supported by appropriate computer technology.
Options for calculating average estimates of the actual cost of materials for accounting and tax accounting purposes should be disclosed in the organization’s accounting policies.
Let's compare the results:
| Index | Average cost method | FIFO method | LIFO method |
| Written off for production (RUB) | 806 334,70 | 801 000,00 | 805 000,00 |
| Average cost of items written off in production (RUB) | 1 966,67 | 1953,66 | 1963,41 |
| Balance at the end of the month (RUB) | 78 666,80 | 84 000,00 | 80 000,00 |
| Average cost of materials in balance | 1 966,67 | 2 100,00 | 2 000,00 |
In the example given, there is no clear tendency for the values obtained to differ when using in various ways estimates of inventories, since the conditions of the example provide for fluctuations in the purchase price of materials. So the cost of the balance at the beginning is 2,000.00 rubles, in reporting period materials were purchased at prices of 1,800.00 and 2,100.00 rubles.
Subject to a steady increase in prices, the most profitable, undoubtedly, is the LIFO method, since the cost of written-off inventory items increases, and profit, accordingly, decreases. When prices decline, the exact opposite pattern occurs when applying the FIFO method. To avoid jumps, accountants, as a rule, choose the method of writing off inventories at average cost for both accounting and tax purposes. This method is time-tested and does not cause difficulties in calculations, and also gives average indicators for any changes in prices on the market.
To make the right management decisions in the field of inventory management, there is a need to choose a method for assessing inventories for accounting purposes.
For tax purposes, one or another method of assessing materials is used to optimize taxation, in particular to reduce income tax payments, provided that the method that provides for write-off for reduction is chosen. tax base maximum possible expenses.
Consequences of applying different methods of inventory valuation for accounting and tax purposes.
How to take into account the differences that arise when applying different methods of valuing inventories for accounting and tax purposes. In this case, it becomes necessary to apply the requirements of PBU 18/02.
So, the organization uses different methods for valuing inventories for accounting purposes and for tax purposes. What differences arise?
If the amount of expenses reflected in the accounting records exceeds the amount of expenses accepted for tax purposes, a deductible temporary difference arises, and, as a result, a deferred tax asset(SHE). If the amount of expenses reflected in the accounting records is less than the amount of expenses accepted for calculating income tax, a taxable temporary difference arises, and, as a consequence, deferred tax liability. Let's look at how differences arise based on our example data.
When calculating by the average cost method, the amount attributable to the cost is 806,334.70 rubles, with the FIFO method - 801,000.00 rubles, with the LIFO method 805,000.00 rubles.
| Applicable assessment of the MPP for the purposes | Differences that arise | SHE/IT | |
| Accounting | Taxation | ||
| At average cost 806 334,70 | Using the FIFO method 801 000,00 | Deductible temporary difference | SHE |
| At average cost 806 334,70 | Using the LIFO method 805 000,00 | Deductible temporary difference | SHE |
| Using the FIFO method 801 000,00 | At average cost 806 334,70 | IT | |
| Using the FIFO method 801 000,00 | Using the LIFO method 805 000,00 | Taxable temporary difference | IT |
The optimal method for assessing inventories for tax accounting purposes in organizations that apply a simplified taxation system is the FIFO method, since the method of assessing inventories at average cost for the purposes of tax accounting of expenses under the simplified tax system does not allow compliance with the requirements of Art. 346.17 of the Tax Code of the Russian Federation, regarding control of payment of expenses. At the same time, the organization retains the opportunity to keep track of inventories “on average” in accounting.
Of course, the emergence of differences between accounting and tax accounting leads to a complication of the accounting process, as a consequence to a greater number of errors. However, market conditions, the presence of multiple user approaches financial statements(for example, it is beneficial for an organization to show profits in order to pay larger dividends) and last changes legislation increases the number of situations where these differences arise. In addition, if the range of materials (goods) is small and the accountant has the option of batch accounting, you should think about whether the weighted average valuation method is convenient and practical from a tax point of view.
03/15/2020 Attention! The document is out of date! New version of this document
In both accounting and tax accounting (both under the OSN and under the simplified tax system), when releasing raw materials into production, transferring tools and equipment into operation, and when selling goods, their value can be assessed by one of three methods. The chosen method must be indicated in the accounting policy. In this case, one type of inventory (for example, raw materials) can be assessed by one method, and another type of inventory (for example, goods) - by another (clause 16 of PBU 5/01, clause 73 of the Methodology for accounting for inventory).
Method 1. Based on the cost of each unit of inventories (clauses 16, 17 of PBU 5/01). With this method, the organization must ensure that each unit of inventory is accounted for. That is, when each unit of inventory is removed from the warehouse, it must be known which specific unit of inventory is being retired. Then, upon disposal of each unit of inventory, the cost of its acquisition is written off as expenses. This includes, in particular, precious stones and artistic treasures.
Method 2. Based on the average cost of inventories (clauses 16, 18 PBU 5/01, Letter of the Ministry of Finance dated 09/08/2014 N 03-03-06/1/44996). To apply this method in analytical accounting, inventories are divided into groups. For example, if an organization sells stationery, then analytical accounting can be organized by product group of varying degrees of detail, for example:
- or "handles";
- or “ballpoint pens”, “gel pens” and “fountain pens”.
The average cost of a unit of inventories when released into production, put into operation or sale is calculated for each group of inventories using the following formula:
The total cost of retired inventories is determined by the formula:
Such a calculation for choosing an organization can be made (clause 78 of the Methodology for accounting for inventories):
- or upon release of each unit (batch) of inventories (moving average estimate). In this case, to calculate the average cost of a unit of inventories, the debit turnover on account 10 (41) and the number of inventories received by the organization are taken as of the date of issue of each unit (batch) of inventories;
- or once at the end of the month for the entire number of retired workers (average estimate). Please note that in trading this method does not allow you to accurately evaluate financial results from every sale.
Example. Rating of sold goods based on average rating
At the beginning of the month, the remaining carrots amounted to 100 kg, costing 1,200 rubles. During the month, another 500 kg of carrots were purchased at a price of 10 rubles/kg, total cost 5000 rub. (10 RUR/kg x 500 kg). 550 kg of carrots were sold in a month. The balance of carrots at the end of the month is 50 kg (100 kg + 500 kg - 550 kg).
The average cost of 1 kg of carrots sold is 10.33 rubles/kg ((1200 rubles + 5000 rubles) / (100 kg + 500 kg)). The cost of the sold batch of carrots is 5681.5 rubles. (RUB 10.33/kg x 550 kg).
The cost of the remaining carrots at the end of the month is 516.5 rubles. (RUB 10.33/kg x 50 kg).
Method 3. At the cost of the first acquisition of inventories (FIFO) (clauses 16, 19 of PBU 5/01). To apply this method in analytical accounting, inventories are divided into groups in the same way as in method 2. Retiring inventories are valued at the cost of the earliest acquisitions. That is, first, inventory items are written off at the cost of acquisition of inventory items available in the organization at the beginning of the month, then at the cost of inventory items, the first in terms of acquisition time from the beginning of the month, etc.
Example. Valuation of sold goods at the cost of the first in time of acquisition (FIFO)
At the beginning of the month, the remaining carrots amounted to 100 kg at a price of 12 rubles/kg. During the month, another 500 kg of carrots were purchased at a price of 10 rubles/kg. 550 kg of carrots were sold in a month. The balance of carrots at the end of the month is 50 kg (100 kg + 500 kg - 550 kg).
The cost of carrots sold is 5,700 rubles. (12 RUR/kg x 100 kg + 10 RUR/kg x (550 kg - 100 kg)).
The cost of the remaining carrots at the end of the month is 500 rubles. (10 RUR/kg x 50 kg).
Regardless of the chosen method for assessing inventories, their write-off is reflected by posting
In accounting for goods accounted for sales price(taking into account trade margins), none of the listed methods is used. Such goods are written off at their selling price.
More on the topic:
Disposal of inventories occurs during release into production, transfer for own needs organization, selling them to third parties or during liquidation as a result of any force majeure circumstances. The write-off of inventories, depending on the grounds for disposal, is documented in documents whose form is approved by regulation. Inventory can be written off:
- limit-withdrawal card for approved form M-8 (issued in cases where limits (standards) are set for the consumption of materials);
- requirement-invoice in form M-11 (in the event that the production process does not provide for limiting material consumption);
- invoice for external release in form M-15 (if materials are sold or disposed of for other reasons).
Currently, according to the legislation of the Russian Federation (namely, Regulation PBU 5/01), the assessment of the value of inventory upon disposal in accounting can be carried out in one of the three following ways:
- write-off of inventories at average cost;
- write-off at cost of each unit of inventories;
- using the FIFO method (writing off at the cost of the first acquired inventory).
The assessment of inventories is carried out according to the methodology approved in the accounting policy of the organization. By choosing the method of assessment used, the organization can control the financial result.
The write-off of inventories in tax accounting is carried out using the methods established by PBU 5/01. The cost of inventories is determined:
- method of estimating the cost of a unit of inventories;
- average cost method;
- valuation method based on the cost of the first (FIFO) and the last (LIFO) in terms of the time of acquisition of inventory;
As we can see, the LIFO valuation method is used in taxation and not used in accounting. This method was excluded from the accounting rules by order of the Ministry of Finance No. 26n dated March 26, 2007. This was done in order to unify domestic and international standards accounting In tax accounting, four methods of assessing SDRs have been preserved.
When using the method of estimating the cost of each unit, the calculation includes inventories used in a special order (for example, precious metals) and inventories that cannot be replaced by other items of inventories. The average cost is calculated based on the cost of all items of inventories and their balance at the beginning of the month, taking into account the inventories received during the reporting period. This method is the most convenient and therefore widespread among manufacturing enterprises. The FIFO evaluation method can be called a conveyor belt (since the balances of inventories at the beginning of the reporting period are written off first, then the first batch, and so on in order). This method allows, in conditions of falling prices for inventories, to minimize the assessment of inventories and, accordingly, profit, and when prices rise, to minimize costs and increase the assessment of inventories and profits.
Using the LIFO method, the first inventories received into production are valued at the cost of the last ones. This method is the opposite of the FIFO method and allows you to maximize inventory valuation and profit when prices fall and minimize when prices rise.
The assessment of inventory upon disposal for tax accounting purposes using the above methods can be carried out:
- when determining the amount of expenses when writing off inventories (raw materials, materials used in production) in production activities, provision of services, performance of work (clause 8 of Article 254 of the Tax Code of the Russian Federation);
- when selling goods (clause 1 of Article 268 of the Tax Code of the Russian Federation);
- upon disposal of securities (clause 9 of Article 280 of the Tax Code of the Russian Federation).
Costs are given a lot of attention in enterprises. The expediency of all types of expenses must be reasoned and justified.
Thus, the choice of the method of writing off inventory items as expenses as they are disposed of depends on the characteristics of production and the goals pursued by the company.
For example, the FIFO chronological inventory method is especially suitable for goods with a limited useful life: perishable or obsolete.
In addition, it allows you to evaluate the payback and efficiency of using materials.
Despite some negative manifestations, for example, ignoring inflation processes and price fluctuations, many organizations, due to logic and simplicity, choose the FIFO method.
An example of calculation using specific figures, the scope and specifics of application, the pros and cons of the method are in the article.
Cost calculation methods
If you are serious about getting into trading, you will have to choose which costing method to use. Today, there are three legally permitted methods of assessment and calculation:
- at the cost of each unit of goods,
- at average cost,
- using the FIFO (first in, first out) method.
Each of them will give different indicators for business profitability, and therefore for tax and management accounting. Such a seemingly simple question - at what cost to write off sold goods - can seriously affect how your trade will develop.
In this material we will look at all the presented methods for calculating cost, evaluate the advantages of each, and also tell you when it is better to use which one.
At the cost of each unit
As the name implies, this method assumes that the cost of each specific product is taken into account in the calculations.
This system is used when trading unique and expensive goods when accuracy is important. For example, it is suitable for those who will sell cars, art or jewelry.
It is logical that when a product is piecemeal, and one cannot easily replace another, exactly the price at which it was delivered is entered into accounting when writing off inventory items. This method also assumes that it is always clear from which specific delivery the goods sold came from.
Average cost method
It is used more often than the previous one, and involves monthly calculation of the cost of goods using the arithmetic average. In this case, it does not matter from which specific delivery this or that product “left”. This method of writing off inventory items is suitable for companies selling products for which piece accounting is not important.
This could be, for example, stationery, clothing, shoes, toys, cosmetics and any other consumer goods. The average cost method is especially beneficial for those goods for which the price is constantly changing, both up and down. This method is the easiest to account for.The average cost of goods is calculated using the following formula:
[average cost of inventory items] = ([cost of inventory items at the beginning of the month] + [cost of inventory items received during the month]) / ([number of inventory items at the beginning of the month] + [number of inventory items received during the month])
And the cost of inventory written off per month is calculated as follows: [cost of written-off inventory items] = [average cost of inventory items] X [number of inventory items sold per month].
An example of calculation using the average cost method.
At the beginning of the month, the Stationery store had 370 ballpoint pens left at a purchase price of 10 rubles. Within a month, another 1000 pens were delivered in two batches - 500 for 9 rubles 50 kopecks and 500 for 9 rubles.
We calculate the average cost:
Cost of inventory items at the beginning of the month: 370 X 10 = 3700 (rub.)
Cost of the 1st new supply of goods and materials: 500 X 9.5 = 4750 (rub.)
Cost of the 2nd new supply of goods and materials: 500 X 9 = 4500 (rub.)
Average cost of inventory items: (3700 + 4750 + 4500) : (370 + 1000) = 9.45 (rub.)
1100 X 15 – 1100 X 9.45 = 6105 (rub.)
The advantages of the average cost calculation method are the stability of the price of materials sold and simplicity. However, from a tax accounting point of view, it is not optimal in the case where, for example, you purchase the same pens from the same supplier, and he gradually reduces your prices. Let's consider the following option.
FIFO method: example of cost calculation
This is the most popular cost calculation method. It uses the queuing principle. It is assumed that the items that were delivered first are written off first. Hence the name of the FIFO method (English: “first in, first out” - “first in, first out”).
However, unless the shelf life is important, it is not necessary to ship goods from an earlier delivery first - this is used as an assumption in the calculations. That is, the cost of goods that are sold first is calculated at the price of the balances from the “oldest” delivery. When the remains are quantitatively exhausted, write-off of inventory items goes at the price of the next delivery time, then the next one, and so on.
An example of calculation using the FIFO method. Let’s take our “Stationery” store with ballpoint pens and exactly the same situation as above.
We have 370 ballpoint pens for 10 rubles and are supplied in two batches of 500 pens - first for 9 rubles 50 kopecks, then for 9 rubles. 1100 pens sold for 15 rubles. We count the profit.
The first to go will be 370 pens for 10 rubles - that's 3,700 rubles. Then 500 pens cost 9.5 rubles each, which is another 4,750. There are 230 pens left, each worth 9 rubles, which is 2,070 rubles.
1100 X 15 – (3700 + 4750 + 2070) = 5980 (rub.)
As can be seen from the example of calculation using the FIFO method, the profit indicator in in this case lower than in the average cost example. Accordingly, income tax will be less.
What's better
Both of these methods work quite well. However, FIFO is considered more accurate than the average cost method. It is especially beneficial in terms of taxes if the price of the goods you purchase is constantly decreasing. Then the cost of the written-off goods will be the greatest, and the balance will be the minimum. Therefore, the answer to the question of which is better, FIFO or average cost, in most cases will be the first option.
In the warehouse program
Despite the fact that the FIFO method is quite simple in terms of understanding the principle of its operation, manually calculating the cost each time is very labor-intensive. Especially if you have a small business, and you yourself are the director, the cashier, the accountant, and the chief buyer.
It is much easier if you simply enter data on deliveries and sales and immediately get the result. This is exactly how you can work with the MyWarehouse service. The program fully automates trading processes and itself calculates the cost of written-off goods using the FIFO method.
MyWarehouse calculates profitability for each product or product group, stores and displays current and historical balances, as well as many other data that may be useful. This way, you save time and can be confident in the accuracy of the indicators on which you make decisions.
Company accounting policy
According to the law, the organization itself chooses how to calculate the cost of goods. It is important that the method you consider is necessarily reflected in the company's accounting policies. This is stated in Article 313 Tax Code RF, as well as in paragraph 73 of the Methodological Instructions, approved by order of the Ministry of Finance of Russia dated October 28, 2001 No. 119n.
Changes to accounting policies can be made once a year. That is, you can deposit them earlier, but they will begin to operate according to the law next year - at the beginning of the new year tax period. The accounting policy is drawn up by an accountant and approved by the head of the organization.For management accounting purposes, you are free to use any costing method. Our advice is to use the same one that is written down in your accounting policy - this way there will be less confusion.
Source: "moysklad.ru"
Calculation and write-off of cost of inventories sold
According to paragraph 16 P(S)BU 9, to determine the cost of disposed inventories, an enterprise can use the following methods:
- identified cost;
- weighted average cost;
- FIFO;
- LIFO;
- normative;
- selling prices.
Previously, catering enterprises traditionally used the sales price method to determine the cost of goods sold and kitchen products. But from January 1, 2003 new edition clause 5.9 art. 5 of the Law on Profit determines that for tax accounting purposes, only the identified cost method or the FIFO method can be used.
Using the identified cost method in practice is very difficult.
Therefore, today the vast majority of food service businesses have opted for the FIFO method for tax and accounting purposes to avoid double work.
And yet, we consider it appropriate to provide, within the framework of the “Accountant School,” a description of all six methods provided for by P(S)BU 9. After all, be that as it may, but changes in tax legislation do not “cross out” existing accounting standards.
- Identified cost method.
The essence of this method is that accounting is kept separately for each unit of inventory, i.e. Each unit of inventory is retired at the same cost at which it was capitalized upon receipt.
- The weighted average cost method is very convenient for enterprises that have a large range of inventories with constantly changing costs.
- The FIFO method (“first in - first out”) is based on the assumption that inventories are disposed of in the order in which they arrived at the enterprise. That is, it is believed that the inventories purchased first are also sold first.
Let's illustrate the use of the FIFO method with an example.
Example 1. As of June 1, 2003, the balance of a certain type of inventory was 10 units at a price of UAH 10.00. During the month, the enterprise received 260 units of this type of inventory: the first batch - 20 units. at a price of 15.00 UAH; second batch - 40 units. at a price of 12.00 UAH; third batch - 200 units. at a price of 20.00 UAH.
170 units dropped out in a month. Let's determine the cost of disposed inventory and balance using the FIFO method:
The table easily shows the sequence of inventory write-off using the FIFO method. First of all, the balance at the beginning of the month is written off, then the receipt in the reporting month: first - the first batch, then the second, etc., until the total amount of inventory to be written off in this month is reached (in the example - 170 units) .
From the receipt of the third batch (200 units), exactly as much as was necessary was taken to ensure that the resulting quantity was 170 units.
It does not matter that virtually all 170 units. the inventory may well have only been "taken" from the last batch - for FIFO purposes, it is the inventory that came in first that is considered to go out first.
From the above calculation it is clear that the use of the FIFO method in practice is quite labor-intensive. In this regard, we recall that accounting for the increase (loss) of inventories, in accordance with clause 5.9 of the Law on Profit, consists of comparing book value inventories at the end and beginning of the reporting period (quarter, half-year, 9 months, year).
Therefore, for tax accounting purposes, it is not important at what price the inventories were disposed of, but how they were valued at the end and beginning of the reporting period. This allows you to use a simplified version of the FIFO method, which is based on the fact that inventory balances are valued at the cost of the most recent inventory receipt.Example 2. According to the conditions of example 1, it will be sufficient:
- find the invoice for which the latest batch 3 was received;
- make sure that the actual balance of stocks of this type (100 units) does not exceed the last receipt (200 units at a price of 20.00 UAH);
- conclude that the cost of the remaining inventory of this type at the end of the period is UAH 2000.00. (100 units x 20.00 UAH).
Having transformed the well-known formula of the “commodity balance” (Balance at the end of the period = Balance at the beginning of the period + Income - Expense), we get calculation formula to determine the value of disposed inventories:
Expense = Balance at the beginning of the period + Income - Balance at the end of the period = 100.00 + 4780.00 - 2000.00 = 2880.00 UAH.
As you can see, the results are absolutely the same when using the original and simplified FIFO methods. Traditionally, when using the FIFO method, inventory is accounted for at original (purchase) cost. Meanwhile, “simplified FIFO” can also be used in the case of accounting for goods and products at sales prices.
To do this, it is necessary to organize the accounting of trade margins for each batch of goods (for example, on each invoice, mark the amount of the trade margin).
And then, in a manner similar to that described above, you can determine the balance of trade margins attributable to the balance of goods, as well as the amount of trade margins on disposed goods.
Example 3. Suppose that in examples 1 and 2 the cost of goods is given in sales prices(subaccount 282 “Goods in trade”). We also provide information on the size of the trade margin per unit of each batch of goods:
- balance as of 06/01/2003 - 5.00 UAH. for 1 unit (5.00 x 10 = 50 UAH for the entire balance - the balance of Kt 285 “Trade margin” at the beginning of the month);
- batch 1 - 7.00 UAH. for 1 unit (7.00 x 20 = 140.00 UAH for the whole batch);
- batch 2 - 6.00 UAH. for 1 unit (6.00 x 40 = 240.00 UAH for the whole batch);
- batch 3 - 9.00 UAH. for 1 unit (9.00 x 200 = 1800.00 UAH for the whole batch).
total amount trade margin on goods of this type received during the month: 140.00 + 240.00 + 1800.00 = 2180.00 UAH. (loan turnover in subaccount 285 “Trade margin”)
Knowing that the balance at the end of the month is 100 units. goods from batch 3, we determine the balance of trade margins at the end of the month according to this species goods: 9.00 UAH. x 100 units = 900 UAH. (balance Kt 285).
Now, using a formula similar to that given in example 2, it is easy to calculate the amount of trade margins on disposed goods: 50.00 +2180.00 - 900.00 = 1330.00 UAH.Thus, the cost of goods disposed of during the month was: 2880.00 - 1330.00 = 1550 UAH.
- The LIFO method (“last in - first out”) is based on the assumption that inventories are disposed of in the reverse order of their receipt. That is, the inventory that arrived last is considered to be disposed of first.
- The standard cost method is usually used when assessing material costs as part of work in progress and finished products.
According to this method, the cost of disposed inventories is determined based on the cost norms per unit of product (work, services). Cost standards are set by the enterprise independently, taking into account normal levels of inventory use, labor, production capacity and current prices.
In order for standard costs to be as close as possible to actual costs, cost standards and prices must be regularly (for example, once a month) checked and revised by the enterprise.
- Sales price method.
The procedure for calculating the cost of goods sold and finished products using the sales price method is presented in the table:
The following conventions are used in the table:
- TN% - average percentage of trade margin;
- ТНн - balance of trade margins at the beginning of the reporting month (balance Kt 285 “Trade margin”);
- ТНп - the amount of trade margins attributable to goods (products) received in the reporting month (credit turnover on account 285 “Trade margin”);
- Tn - sales (retail) cost of the balance of goods (products) at the beginning of the reporting month (balance of Dt 282 “Goods in trade” and Dt 23 “Production”);
- Тп - sales (retail) cost of goods received in the reporting month (products for the kitchen) (debit turnover on accounts 282 “Goods in trade” and 23 “Production”, respectively);
- ТНreal - the amount of trade margin attributable to goods sold;
- Real - sales (retail) cost of goods sold;
- C/Creal - cost of goods sold.
Example 4. We use the data from examples 1 - 3 to calculate the cost of goods sold using the selling price method.
Let us remind you: as of June 1, 2003, according to accounting data, there were goods of a certain type in the amount of 100 UAH. in sales prices, incl. trade margin - 50.00 UAH; goods of this type were received during the month in the amount of 4780 in sales prices, incl. trade margin - 2180.00 UAH; goods of this type were sold during the month in the amount of UAH 2880.00. in selling prices.
Let's determine the cost of goods sold per month using the sales price method:
- average percentage of trade margin: [(50.00 + 2180.00)/(100.00 + 4780.00)] x 100% = 45.70%;
- trade margin on goods sold: 2880.00 x 45.70% / 100% = 1316.16 UAH;
- cost of goods sold: 2880.00 - 1316.16 = 1563.84 UAH.
So, we have considered all 6 existing methods for estimating the cost of inventory disposal.
And now we present possible correspondence of accounts for writing off trade margins and the cost of goods sold, as well as reflecting income and determining financial results from sales:
It is also possible to pay by bank transfer, in which case the debit account will be 31.
The difference between the turnover in the debit and credit of account 791 represents the financial result of the enterprise’s activities.
Since subaccount 791 should not have a balance at the end of the month (or quarter), the resulting difference is written off to account 44. If the debit turnover of account 791 is greater than the credit turnover, then the difference between them will be the amount of loss, and if vice versa, then the amount of profit .
Source: "dtkt.com.ua"
FIFO method
Organizations must pay sufficient attention to costs. In order to justify expenses, it is necessary to be able to argue the feasibility of their occurrence. The write-off of material assets is subject to certain rules. Entities often use the FIFO method in accounting to determine the value of used inventories.
Write-off
It is almost impossible to imagine a situation in which the purchase of homogeneous groups of goods necessary for work occurs identically over a long period of time. As a rule, materials and raw materials come from several organizations and at different prices. At high turnover, it is not possible to track the cost of a specific unit used for production needs.
The law allows you to write off material values on costs as they are disposed of, using several methods. According to PBU 5/01 “Accounting for inventories”, accounting allows the use of several methodologies:
- Based on the cost of each unit. Suitable for accounting for expensive goods, when it is possible to track the disposal of each batch of materials and inventories.
- At average cost. Total costs are determined as the ratio of the average price (based on the value of the balance and the amount received) to the total quantity, determined similarly.
- The FIFO method means that the inventory that arrives first is used initially.
The FIFO rule is also often called the conveyor method. The name is an English abbreviation FIFO, which means First in first out. That is, “first in, first out.”
The method of writing off FIFO in accounting did not change in 2018. Homogeneous inventory continues to be exited in the order in which it was received. Accordingly, materials from subsequent batches are not disposed of until the previous ones are completely used up.
The FIFO principle means that write-off for production or business needs occurs at the actual cost of inventories received first in line.
Thus, the cost of inventories received later and not used is included in the cost of closing balances.
FIFO principle in warehouse
Under certain conditions, the FIFO method is preferable in conditions of warehousing of goods. Considering that FIFO in accounting in 2018 is still the priority for writing off initial receipts, inventories leave the warehouse in a strict capitalization sequence. Consignments of newly received homogeneous goods are not written off until the previous ones are used up.
The FIFO method is especially preferable when it comes to perishable goods. The chronological sequence of material write-offs must be confirmed by financial planning, which primarily affects the efficiency of the warehouse.Downtime in production processes due to shortages of raw materials must be avoided. No less important is the task of minimizing losses due to untimely damage to goods.
When writing off materials, which is the FIFO method, the following features are distinguished:
- incoming goods are considered separately by batch;
- the cost of purchased batches of goods is determined;
- preventing product damage;
- minimizing losses through efficient use of inventories.
The FIFO method in relation to warehouse accounting is relevant for the following types of products:
- perishable goods;
- products with a limited shelf life;
- goods that may become obsolete.
The FIFO method adopted in accounting, an example for writing off listed inventories, allows you to maximally avoid potential losses in the form of damage to inventories.
At the same time, in practice, the implementation of this principle can be quite difficult. Large enterprises with high turnover require developed system inventory accounting, including monitoring the movement and balances of materials. Of great importance is the organization of the placement of goods and warehouse zoning, which makes it possible to ship materials that are in demand at the right time.
Calculation example
On this moment the provisions of PBU 5/01 in relation to the issue under consideration have not changed. The FIFO method in accounting in 2018 is also valid: costs incurred include the cost of the goods used that were originally purchased. The remainder of the inventory is the cost of inventories received later.
In accounting, the FIFO method is an example of the impact of changes in purchase prices on the financial result:
- Thus, when the cost of inventories of a homogeneous group increases, the initial low price will be included in the cost of production. Accordingly, product costs will be low and profits will increase.
- The FIFO method, an example of which involves reducing purchase prices, will, on the contrary, increase the cost of production, reducing profits.
Example. The company is engaged in the production of bakery products. At the beginning of the period, the remaining flour is priced at 20,000 rubles. per ton was 2 tons, only 40,000 rubles. Then the flour arrived in batches: 1st arrival 3 tons for 25,000 rubles; 2nd receipt of 5 tons for 30,000 rubles. During the period under review, 4 tons of flour were consumed.
The organization uses the FIFO method. An example of a write-off calculation would be as follows:
The cost of flour put into production is 2 tons for 20,000 rubles and 2 tons for 25,000 rubles. Total 2 x 20,000 + 2 x 25,000 = 90,000 rubles. The average cost of a ton of flour is 90,000/4 = 22,500 rubles.
The remaining flour is 1 ton for 25,000 rubles and 5 tons for 30,000 rubles. Total 1 x 25,000 + 5 x 30,000 = 175,000 rubles. The cost of the remainder is 175,000/6= 29,166.67 rubles per ton.
Based on the calculation results, the FIFO method allows you to initially take into account the goods that arrived first in time. The cost of purchasing subsequent MPZ will be taken into account as used.
Source: "spmag.ru"
The concept of FIFO. Calculation. Example
The FIFO method (English FIFO, First In First Out, conveyor model) is a method of accounting for the inventories of an enterprise in the chronological order of their receipt and write-off. Basic principle This method is “first in, first out”, that is, the materials that arrived at the warehouse first will also be used first.
Inventories include current assets used in the company’s production cycle:
- raw materials,
- materials,
- semi-finished products
- finished products.
Reserves occupy a significant part current assets enterprises and require competent accounting. There are other accounting methods in accounting inventories:
- at the cost of each unit;
- at weighted average cost;
- at the cost of last purchases (LIFO).
Advantages and disadvantages
The opposite of the FIFO accounting method is the LIFO (Last In First Out) method. The LIFO method is also called the “barrel model”, since the materials that were received last are written off first. It should be noted that the LIFO method is used for tax accounting purposes only. The methods are also used in warehouse logistics, for example, the FIFO method is used for warehouse accounting of perishable inventories.
Example of FIFO valuation
Let's look at an example of using the FIFO method in practice. The figure below shows the initial data on the receipt and use of fabric inventories. During the month of March, 270 meters of fabric were consumed; it is necessary to determine the fabric reserves for April.
When calculating using the FIFO method, it is necessary to use data sequentially, starting with the balances for the previous month. The total amount of fabric received for March was 13,400 rubles.
270 includes the balance for the previous month - 100 m, 120 m for the first receipt and 50 meters for the second receipt.
The cost of written-off material is calculated as follows: 100 x 35 rubles. + 120 x 40 rub. + 50 x 45 rub. = 10,550 rub.The estimated cost of one meter of fabric using the FIFO method is: 10,550 / 270 = 39.07 rubles.
Calculation of the value of the balance at the end of the month: (3500+ 13400) – 10550 = 6350 rubles.
It should be remembered that the first thing next month will be the materials from the second batch of fabric. At the end of March, the balance will include materials from the second and third batches of fabric, in quantities of 30 and 100 meters, respectively.
Source: "online-buhuchet.ru"
FIFO method in accounting
This method is used when the cost of inventories is based on the cost of materials that were received by the enterprise earlier. For example, if an enterprise had several deliveries, then first the materials are taken into account in production at the price of the first delivery, then at the price of the second delivery, etc. sequentially.
An example of the use of FIFO in accounting is discussed below. So, let's evaluate inventories using the FIFO method.
Solution. With the FIFO method of accounting for inventory, we must, when sending materials to production, first send the materials that arrived to us earlier.
So, the first batch sent to production is 170 kg. At the beginning of the period we had a balance of 200 kg at a price of 50 rubles per kilogram. Therefore, we take into account 170 kg at a price of 50 rubles per kilogram, which will be 170 * 50 = 8500 rubles.
The second batch sent to production is 160 kg.
We have a balance from the beginning of the month of 30 kilograms at a price of 50 rubles per kilogram. And in the first delivery we received 100 kg of materials at a price of 20 rubles. per kilogram. Which gives us 130 kg, but we need 160 kg. Therefore, we take another 30 kg from the second delivery at a price of 30 rubles. per kilogram (remember that in the second delivery there are (150-30) 120 kg of materials at a price of 30 rubles per kilogram.
So, the second batch sent to production will be taken into account in the amount = 30*50+100*20+30*30=4400 rubles.
The third batch sent to production is 80 kg. We still have 120 kilograms left over from the second delivery at a price of 30 rubles per kilogram. Therefore, 80 kg (the third batch sent to production) is taken into account at a price of 30 rubles, which will be 80 * 30 = 2400 rubles (remember that in the second delivery there remain (120-80) 40 kg of materials at a price of 30 rubles per kilogram.
The fourth batch sent to production is 40 kg. We still have 40 kilograms left over from the third delivery at a price of 30 rubles per kilogram.
Therefore, 40 kg (the fourth batch sent to production) is taken into account at a price of 30 rubles, which will be 40 * 30 = 1200 rubles.
In total, using the FIFO method, we send materials to production in the amount of 8500+4400+2400+1200=16500 rubles.
Let us summarize the data obtained in the table:
Source: "goodstudents.ru"
Let's look at fifo using an example
The FIFO method is a method of writing off materials in which previously purchased materials are written off first. As a result, materials are listed on the balance at a price that is most consistent with current prices on the market.
Let's look at a simple example. The following data is available on the remaining materials in the warehouse:
Let us determine the cost of materials supplied to the production of FIFO valuation methods.
(50 * 23 rub.) + (23 * 23 rub.) + (7 * 22 rub.) = 1833 rub.
The balance of materials is: 35 pcs. 22 rubles each, 30 pcs. 24 rub. for the amount of 1490 rubles.
Let's look at a typical problem to reinforce the material. According to the accounting data of Start LLC as of 01/01/2013. The warehouse contains the following balances of materials according to account 10.1:
01/05/2013 From the supplier Logos LLC, the warehouse of Start LLC received fabric - a tapestry in the amount of 500 meters at a price of 136.88 rubles. per meter, including VAT.
01/07/2013 Paid for materials from Logos LLC in the amount of 68,440 rubles. 01/12/2013 From the supplier Decor LLC, the warehouse of Start LLC received fabric - tapestry in the amount of 750 meters at a price of 138.65 rubles. per meter, including VAT.
01/18/2013 fabric - tapestry was released from the warehouse for the purposes of main production in the amount of 1480 meters.According to the accounting policy of Start LLC, when materials are released into production or otherwise disposed of, they are assessed using the FIFO method. It is necessary to calculate the cost of materials released into production and compile accounting entries. Let's make a journal business transactions Start LLC for January 2013:
There are 480 meters in the warehouse at a price of 115 rubles, it remains to write off another 1000 meters, we take 500 at the price of the first delivery of 116 rubles and 500 meters from the last receipt at 117.5 rubles.
We get: 115*480 + 116*500 + 117.5*500 = 55,200+58,000+58,750 = 171,950 rubles.
Thus, the cost of written-off materials will be 171,950 rubles. and the remainder of Start LLC will have 250 m of tapestry at a price of 117.5 rubles.
In addition to FIFO, there is the average cost method. Until 2008, the LIFO method also existed, but it is no longer used. Schematically, the differences between these methods look like this:
