Starting from reporting for 2009, the reporting procedure business transactions for long-term contracts has changed significantly. Now organizations must reflect income and expenses, as well as form financial results every reporting period. Wherein new order The recognition of income and expenses depends on how reliably the financial result under the contract can be determined.

Revenue recognition
If the financial result can be determined reliably, then income and expenses are calculated depending on the degree of completion of the work (clause 17 of PBU 2/2008).

Otherwise, revenue is recognized according to different rules. Thus, if it is probable that expenses incurred in executing a contract will be reimbursed, contract revenue is recognized in the income statement in an amount equal to the amount of expenses incurred that are considered recoverable during that reporting period. If there is a possibility that the costs will not be reimbursed by the customer, then they are taken into account as expenses for common types activities without revenue recognition.
The procedure described in PBU 2/2008 illustrates the principle of correlating income with expenses that the company makes to generate income.

In practice, there are often situations when, at the initial stages of project implementation, the profit is overestimated. At the end of the project, the full amount of expenses is collected and a loss is formed. New approach has the goal of generating a financial result based on the overall profitability of the project, taking into account all possible additional costs, and thereby distributing the financial result across reporting periods as evenly as possible. Moreover, the accounting procedure for construction contracts provides for the recognition in accounting of revenue and expenses not according to data primary documents, as it was before, but based on calculated estimates.

Let us note: one of the key issues is the definition of “readiness measures”. PBU 2/2008 offers a choice of one of two possible options- either by the share of work completed in the total volume of work, or by the share of expenses incurred in the total planned volume of expenses.
The choice of one or another method for determining the degree of completion of work must be made reasonably and based on the principle of reliability of separately generated accounting indicators and financial statements generally. The chosen method must be fixed in accounting policy organization and is used to record business transactions under all construction contracts.

Types of contracts
In current construction practice, two types of contracts are distinguished depending on the procedure for pricing.
A firm (fixed) price contract is a contract under which the contractor agrees to a fixed contract price or a fixed rate for each unit of work performed. A cost-plus contract is a construction contract under which the contractor is reimbursed for allowable or otherwise determined costs plus a percentage of those costs or a fixed fee.

Most often there is a mixed version. It provides for reimbursement by the customer of all expenses incurred by the construction organization in connection with the implementation provided for by the agreement work, as well as the payment of a percentage of these costs, and the existence of an agreed maximum price for the work to be performed.

Algorithm for recognizing income and expenses
and financial results
The algorithm proposed below (see the diagram in the appendix on page 51) is formed on the basis of the requirements of PBU 2/2008 and represents a sequence of actions for calculating, reflecting in accounting and reporting indicators regarding construction contracts. When developing this algorithm, the requirements of PBU 2/2008 were taken as a basis. In situations not regulated by this provision, the authors turned to international standards and projected the practice of applying IFRS onto Russian accounting.

Step 1. Assessing the reliability of the financial result of the contract. At this stage, it is necessary to evaluate the contract for the possibility of reliably determining the financial result.
If the financial result can be reliably assessed, then we move on to assessing the profitability of the contract.

If a reliable determination of the financial result of the execution of a contract in a certain reporting period is impossible, revenue under the contract is recognized in the following order (clause 23 of PBU 2/2008).
When it is probable that costs incurred in executing a contract will be recovered, contract revenue is recognized equal to the amount of costs incurred during the reporting period.
As a rule, this situation arises at the initial stage of contract execution, when it is impossible to accurately determine the financial result of the contract as a whole. In other words, until a reliable basis is formed for determining contract performance indicators ( estimated cost, estimated costs, etc.), profit under the contract is not recognized.

In practice, construction companies that apply IFRS usually define in their accounting policies a threshold for the degree of completion of work, after which the company begins to recognize profit on construction contracts. For example, a company does not recognize profit on construction contracts until the completion rate reaches 20 percent. This procedure is not fixed in PBU 2/2008. However, given international practice, you can use the specified order. At the same time, the threshold of the degree of completion after which the company begins to recognize profit must be justified, fixed in the company’s accounting policies and applied to all construction contracts.

After this point, the degree of reliability of the financial result can be reliably assessed and, accordingly, we proceed to step 2. When there is no likelihood of reimbursement of expenses by the customer, then revenue is not recognized, and expenses should be taken into account as part of the current expenses of the reporting period.
Registration of the procedure: the necessary data under the contract is generated within the framework of the relevant service of the organization (PTO or, for example, project management).
The project manager prepares confirmation of the possibility of reliably determining the financial result for each contract, based on the above necessary and sufficient conditions. This confirmation should be provided to the accounting department as of the date the financial statements are prepared.

Step 2. Assessing the profitability of the contract. At this stage, a comparison is made of the total amount of income under the contract (taking into account all amounts paid under the contract) with the total amount of expenses (direct, indirect and other - clause 7-16 of PBU 2/2008). This approach assumes, as one of the starting points, the timely identification of possible losses.
Note that PBU 2/2008 only specifies that the expected loss is recognized in the corresponding reporting period (clause 24). International standard describes in more detail this situation(paragraph 37 IAS 11).

In particular, the expected loss is recognized in the company's financial statements as an expense immediately and regardless of:
- whether work has begun under the construction contract or not;
- stages of execution of work under a construction contract;
- the amount of profit expected to be received from other contracts that are not reflected as a single construction contract.
If overall rating shows the profitability of the contract, then move on to step 3.
Registration of the procedure: the calculation is submitted to the organization’s accounting department in a manner similar to step 1.

Step 3. Determining the degree of completion of work under the contract for reporting date. According to the method of determining the degree of completion of work, enshrined in the accounting policy, the company determines the percentage of completion of the construction project as of the reporting date. Next, move on to step 4.
Registration of the procedure: at this stage documenting procedures depend on the organization of accounting in the company. It can be carried out either by the accounting department or the relevant service in a manner similar to step 1.

Step 4. Calculation of the amounts of income and expenses from the moment the work begins. At this stage, the amounts of income and expenses under the construction contract are determined by calculation from the moment the work begins until the reporting date (on an accrual basis).
If the company's accounting policy establishes the moment from which the company recognizes profit on construction contracts, then the percentage of completion at the reporting date is compared with the threshold defined in the accounting policy, and depending on this, income is recognized equal to expenses or taking into account profit. Otherwise, regardless of the percentage of work completion, income is recognized taking into account profit. To calculate the amounts of income and expenses on an accrual basis, the resulting percentage of completion is multiplied by the total amount of income under the contract (contract price) and the total amount of expenses under the contract (estimated expenses), respectively. Next we move on to the next step.

Step 5. Calculation of the amounts of income and expenses under this agreement for the current reporting period. The amount of income and expenses and, accordingly, the financial result for the current reporting period are determined, that is, the amounts of revenue and expenses recognized in the income statement. To do this, from the calculated amounts of income and expenses on an accrual basis (see step 4), we subtract the amounts of revenue and expenses recognized in the income statement for previous reporting periods.

Step 6. Determination of amounts receivable or accounts payable under this agreement as of the reporting date. According to paragraph 29 of PBU 2/2008, the difference between the amount of accrued revenue not presented for payment, which is recognized in the income statement for previous and/or current reporting periods, and the amount of accrued revenue on interim accounts presented for payment is reflected in detail in balance sheet organizations:
- as an asset - accrued revenue not presented for payment (if the difference is positive);
- as a liability - debt to customers (if the difference is negative).
At this stage, the corresponding indicators are calculated.

EXAMPLE
The company is engaged in the construction of pipelines.
Let’s assume that as of December 31, 2009, she had one contract remaining unfinished, work on which began in March 2009. The following data is available regarding the contract:

Article	Amount, thousand rubles, excluding VAT	VAT amount, thousand rubles.	Amount, thousand rubles, including VAT
Expenses incurred at the reporting date	3 500	630	4 130
Future Expected Costs	2 300	414	2 714
Contract price,	7 200	1 296	8 496
including work that the customer accepted	3 600	648	4 248

The accounting policy of a construction company establishes the procedure for recognizing profit on construction contracts after crossing the 20 percent threshold.
Revenue and expenses under construction contracts are recognized “as completed.”
To determine the degree of completion at the reporting date, the company uses the method based on the share of expenses incurred as of the reporting date in the estimated total expenses under the construction contract.
Using the algorithm described above, we determine revenue, expenses and other obligatory financial indicators the company's financial statements for the reporting period of 2009.

Article	Calculation	Result
1. Calculation of the expected result under the contract	7,200 thousand rubles. - (3,500 thousand rubles + 2,300 thousand rubles)	1,400 thousand rubles.
2. Percentage of completion based on expenses	3,500 thousand rubles. : (3,500 thousand rubles + 2,300 thousand rubles) x 100%	60,34%
3. Calculation of income and expenses on an accrual basis: - income - expenses	7,200 thousand rubles. x 60.34% (3,500 thousand rubles + 2,300 thousand rubles) x 60.34%
4. Calculation of income and expenses for the current reporting period	The construction contract was started in the current reporting period, therefore, the income and expenses calculated in paragraph 3 will be the income and expenses of the reporting period
- income - expenses	- -	4,345 thousand rubles. 3,500 thousand rubles.
5. Determination of reporting indicators (amount of accrued revenue not presented for payment (+); debt to the customer (-) as of the reporting date)	(actual costs + estimated revenue) - (actual costs + work accepted by the customer); (3,500 thousand rubles + 4,345 thousand rubles) - (3,500 thousand rubles + 3,600 thousand rubles)	745 thousand rubles.

Based on this calculation, the following entries will be made in accounting (according to the authors, account 47 can be used to reflect recognized estimated revenue):
DEBIT 20 CREDIT 02, 10, 60, 70, 69, 10...
- 3,500,000 rub. - the costs of the period under the contract are reflected;

DEBIT 47
CREDIT 90 subaccount “Revenue”
- 5,127,100 rub. (RUB 4,345,000 + RUB 4,345,000 x 18%) - estimated revenue, including VAT, for the reporting period is recognized;

DEBIT 90 subaccount “Cost of sales”
CREDIT 20
- 3,500,000 rub. - expenses for the reporting period are recognized;

DEBIT 90 subaccount “Value added tax”
LOAN 76
- 782,100 rub. (RUB 4,345,000 x 18%) - VAT is charged on estimated revenue;

DEBIT 62 CREDIT 47
- 4,248,000 rub. - the completed work is accepted by the customer;

DEBIT 76
CREDIT 68 subaccount “Value added tax”
- 648,000 rub. - VAT is charged on work accepted by the customer;

DEBIT 90 CREDIT 99
- 845,000 rub. - financial result identified.

Based on the above calculation and accounting entries, we form financial statements companies. Regarding construction contracts, the following elements of accounting statements will be formed.

Balance sheet

Asset item	Amount, thousand rubles
Unfinished production	0
Accounts receivable:	5 127
accrued revenue not presented for payment	879
debt of the customer for accepted work	4 248
Liability item
Accounts payable:	134,1
advances received from the customer	0
debt to customers	0
deferred VAT on revenues not presented to the customer	134,1 (782,1 - 648)

Gains and losses report

Notes in Explanatory note regarding construction contracts.

1. According to the company's accounting policy, profit on construction contracts is recognized after crossing the 20 percent threshold. Revenue and expenses under construction contracts are recognized “as completed.” To determine the degree of completion as of the reporting date, the method is used based on the share of expenses incurred as of the reporting date in the estimated total expenses under the construction contract.

2. For construction contracts not closed (not completed) as of the reporting date, the following information is provided:

Algorithm for recognizing income, expenses and financial results

Step 1 Assessing the reliability of the financial result of the contract (clause 17 PBU 2/2008) The financial result can be reliably determined (clause 17 PBU 2/2008)

Step 2 Assessing the profitability of the contract (clause 24 of PBU 2/2008) The contract is unprofitable

3.1. step Recognition of loss in the reporting period (clause 24 of PBU 2/2008) The contract is profitable

3.2. step Determination of the percentage of completion of the contract (clause 20 of PBU 2/2008)

Step 4 Determination of income and expenses under the contract on an accrual basis (clauses 17, 20, 21 PBU 2/2008)

Step 5 Formation of income and expenses of the reporting period (clause 25 of PBU 2/2008)

Step 6 Reflection in reporting (clauses 26-29 PBU 2/2008) The financial result cannot be reliably determined (clauses 17, 23 PBU 2/2008)

Step 2 Recognition of income and expenses There is a possibility of reimbursement of expenses by the customer (clause 23 of PBU 2/2008) Revenue is recognized in the amount of costs There is no probability of reimbursement of expenses by the customer (clause 23 of PBU 2/2008) Revenue is not recognized, expenses are recognized in full in the reporting period

Position

By accounting

“Accounting for construction contracts”

(approved by order of the Ministry of Finance Russian Federation

dated November 24, 2008 No. 116n)

I. General provisions1. This Regulation establishes the specifics of the procedure for the formation in accounting and disclosure in financial statements of information on income, expenses and financial results of organizations (with the exception of credit institutions And budgetary institutions), which are legal entities according to the legislation of the Russian Federation and acting as contractors or as subcontractors (hereinafter - organizations) in construction contracts (hereinafter - agreement), the duration of which is more than one reporting year (long-term in nature) or the start and end dates of which fall on different reporting periods years.2. This Regulation also applies to contracts for the provision of services in the field of architecture, engineering and technical design in construction and other services inextricably linked with the facility under construction, for the performance of reconstruction, modernization, repair of fixed assets, for their liquidation (disassembly), including related recovery with her environment , the duration of which is more than one reporting year (long-term in nature) or the start and end dates of which fall on different reporting years.II. Objects of accounting under contracts3. Accounting for income, expenses and financial results is maintained separately for each executed contract.4. In the case where one contract provides for the construction of a complex of facilities for one or several customers under a single project, for accounting purposes the construction of each facility should be considered as a separate contract, subject to the following conditions being simultaneously met: a) there is technical documentation for the construction of each facility; b) according to income and expenses can be reliably determined for each object.5. Two or more contracts concluded by an organization with one or more customers should be considered for accounting purposes as one contract if the following conditions are simultaneously met: a) due to the relationship, the individual contracts actually relate to a single project with a rate of profit determined as a whole for the contracts; b) contracts are executed simultaneously or sequentially (continuously following one after another).6. In the case when, during the execution of a contract, an additional construction project (additional work) is included in the technical documentation, for accounting purposes, the construction of an additional project (additional work) should be considered as a separate contract if at least one of the following conditions is met: a) additional facility ( additional work) in terms of structural, technological or functional characteristics differs significantly from the objects provided for in the contract; b) the price of construction of an additional object (additional work) is determined on the basis of an additional estimate agreed upon by the parties. III. Recognition of income and expenses under the contract7. Income under the contract is recognized by the organization as income from ordinary activities (hereinafter referred to as revenue under the contract) in accordance with the Accounting Regulations “Income of the Organization” PBU 9/99, approved by order of the Ministry of Finance of the Russian Federation dated May 6, 1999 No. 32n (registered in Ministry of Justice of the Russian Federation May 31, 1999, registration number 1791)*.8. The amount of revenue under the contract is determined based on the cost of work at the price specified in the contract, adjusted in cases and on the conditions provided for by the contract, in connection with: changes in the cost of work under the contract (hereinafter referred to as deviations) arising during the execution of the contract agreed upon by the parties, which are caused by either using higher quality and more expensive building materials and structures, as well as performing work that is more complex than those provided for in technical documentation, or work not provided for in the technical documentation (increase in revenue under the contract), or failure to perform any work provided for in the technical documentation (decrease in revenue under the contract); requirements presented by the organization to customers and other persons specified in the contract (hereinafter - claims): for reimbursement of costs not included in the estimate that the organization was forced to incur in connection with the actions (inaction) of these persons; for reimbursement of reasonable expenses incurred in connection with the identification and elimination of defects in the technical documentation provided by the customer or design organization(for example, in connection with the discovery of groundwater during construction), in connection with a delay or stoppage of work due to the customer’s failure to provide assistance to the organization as provided for in the terms of the contract (for example, in transferring to the organization for use the buildings and structures necessary to carry out the work, providing temporary installation of power supply networks, water supply), etc. (increase in revenue under the contract); amounts paid to the organization in addition to the estimate under the terms of the contract (hereinafter referred to as incentive payments), for example, for reducing construction time, etc. (increase in revenue under the contract). 9. Contract revenue is adjusted for variances, claims and incentive payments if it is certain that such amounts will be recognized by customers or other persons specified in the contract to whom they are presented, and their amount can be reliably determined.10. Expenses under the contract are recognized by the organization as expenses for ordinary activities in accordance with the Accounting Regulations “Expenses of the Organization” PBU 10/99, approved by Order of the Ministry of Finance of the Russian Federation dated May 6, 1999 No. 33n (registered with the Ministry of Justice of the Russian Federation on May 31, 1999 city, registration number 1790).**11. Expenses under the contract are those incurred by the organization for the period from the beginning of the execution of the contract to its completion: expenses related directly to the execution of the contract (direct expenses under the contract); the portion of the organization's total expenses for the execution of contracts attributable to the contract (indirect expenses under the contract); expenses, not related to construction activities organizations, but reimbursed by the customer under the terms of the contract (other expenses under the contract).12. Direct costs under the contract, in addition to those actually incurred, include expected unavoidable costs (hereinafter referred to as anticipated costs), reimbursed by the customer under the terms of the contract. Foreseen expenses are taken into account either as they arise during the construction process (to eliminate deficiencies in projects and construction and installation works, dismantling of equipment due to defects in anti-corrosion protection, etc.), or by creating a reserve to cover foreseen expenses (for warranty service and warranty repairs of the created object, etc.). A reserve to cover foreseen expenses is formed under the condition that such expenses can be reliably determined. Organizational income not directly related to the execution of the contract, received during the execution of other types of contracts, is not included in the revenue under the contract and is accounted for as other income or included in the reduction of direct expenses under the contract. Such income includes, for example: income under a purchase and sale agreement from the sale by an organization of excess construction materials and structures purchased for the execution of the agreement; income in the form of rent for construction machinery and equipment leased to other persons that are temporarily not used for the execution of the agreement .13. Indirect contract costs are included in the costs of each contract by allocating the organization's total costs for executing the contracts. Methods of distribution between contracts indirect costs are determined by the organization independently (for example, by calculations using estimated norms and prices that reflect the current level of production, technological and organizational standards in construction) and are applied systematically and consistently.14. Other contract costs may include individual species expenses for general management organization, for carrying out research and development work, other expenses, reimbursement of which by the customer is specifically provided for in the contract.15. Costs associated directly with the preparation and signing of the contract (for the development of a feasibility study, preparation of a risk insurance contract construction work etc.) incurred by the organization before the date of its signing are included in the costs of the contract if they can be reliably determined and if in the reporting period in which they arose, there is a likelihood that the contract will be signed. If the conditions are not met, the specified expenses are recognized as other expenses of the period in which they were incurred.16. Contract expenses are recognized in the reporting period in which they are incurred. In this case, expenses related to work performed under the contract are taken into account as production costs, and expenses incurred in connection with upcoming work are considered as deferred expenses. As revenue under the contract is recognized, contract expenses are written off to determine the financial result of the reporting period in the manner established by these Regulations. 1V. Recognition of financial results17. Revenue under the contract and expenses under the contract are recognized using the “as ready” method, if the financial result (profit or loss) of the execution of the contract as of the reporting date can be reliably determined. The “as ready” method provides that the revenue under the contract and expenses under the contract are determined based on the degree of completion of work under the contract confirmed by the organization at the reporting date and are recognized in the income statement in the same reporting periods in which the relevant work was performed, regardless of whether they should or should not be presented to the customer for payment until the full completion of work under the contract (stage of work provided for by the contract). In the event that a reliable determination of the financial result of the execution of the contract in a certain reporting period is impossible, revenue under the contract is recognized in accordance with paragraph 23 of these Regulations. 18. Regardless of the procedure for determining the price of work to be performed provided for in the contract, the necessary and sufficient conditions for reliably determining the financial result of the execution of the contract are: confidence that the organization will receive economic benefits associated with the contract; the ability to identify and reliably determine the costs incurred under the contract.19. In the case where the contract provides for the customer to pay a fixed price for the performance of all work stipulated by the contract or a price determined on the basis of the price fixed in the contract for each unit of work performed*, taking into account changes made by orders of the Ministry of Finance of the Russian Federation dated December 30, 1999 No. 107n, dated March 30, 2001 No. 27n, dated September 18, 2006 No. 116n, dated November 27, 2006 No. 156n (registered with the Ministry of Justice of the Russian Federation: January 28, 2000, registration number 2064; May 4, 2001, registration number 2693; October 24, 2006, registration number 8397; 28 December 2006, registration number 8698).** taking into account changes made by orders of the Ministry of Finance of the Russian Federation dated December 30, 1999 No. 107n, dated March 30, 2001 No. 27n, dated September 18, 2006 No. 116n, dated 27 November 2006 No. 156n (registered with the Ministry of Justice of the Russian Federation: January 28, 2000, registration number 2064; May 4, 2001, registration number 2693; October 24, 2006, registration number 8397; December 28, 2006, registration number 8698).

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A new approach to contract accounting
construction contract (PBU 2/2008)

Ends reporting year, it's time to think about preparing for the preparation of annual financial statements. Construction companies it is necessary to form it taking into account the rules established by PBU 2/2008 “Accounting for construction contracts”, which came into force on January 1, 2009. These rules are unusual for accountants and reflect the procedure for the activities and document flow of contractors in the conditions of long-term construction. What features of this standard should you pay attention to first?

Which contracts are subject to the rules of PBU 2/2008

Clauses 1 and 2 of PBU 2/2008 contain a list of types of construction contracts that are subject to this accounting standard. These include agreements:

Construction contract;

Providing services in the field of architecture;

Engineering and technical design in construction;

Provision of other services directly related to the construction of the facility;

Either by creating an appropriate reserve (for warranty service and warranty repairs of the created object, etc.), but provided that these costs can be reliably determined.

Recognition of financial results

Revenue under a contract and expenses under it are recognized on an “as ready” basis if the financial result (profit or loss) of the execution of the contract at the reporting date can be reliably determined. This method provides that income and costs are determined based on the degree of completion of work confirmed by the organization as of the reporting date and are recognized in the income statement in the same periods in which the relevant work was performed (clause 17 of PBU 2/2008).

In this case, it does not matter whether they should or should not be presented to the customer for payment until the complete completion of the work (stage of work) under the contract.

Thus, the main innovation of PBU 2/2008 is the phased recognition of contractors’ revenue, regardless of the formal schedule for signing acceptance certificates with the customer.

The regulation (clause 19 of PBU 2/2008) provides three ways to determine the price:

1) a fixed price for the performance of all work stipulated by the contract;

2) price determined on the basis of reimbursable costs plus interest;

3) mixed procedure for determining the price.

If the contract provides for the customer to pay a fixed price for the entire work or a price determined on the basis of a fixed price for each unit of work performed (structure, type of work, etc.), then when determining the financial result it is necessary that certain conditions be met:

The ability to reliably determine the total amount of revenue under the contract, identify and reliably determine the costs necessary to complete the work under the contract;

The ability to determine the degree of completion of work under the contract as of the reporting date;

Comparability of the actual amount of expenses under the contract with previously made estimates of these expenses.

All of these conditions must also be taken into account if the contract provides for a mixed procedure for determining the price of the work to be performed (clause 19 of PBU 2/2008).

To recognize contract revenue and expenses under the “as completed” method, an organization can use the following methods to determine the degree of completion of work at the reporting date:

By the share of completed work in their total quantity;

Based on the share of expenses incurred as of the reporting date in the estimated amount of total expenses under the contract (clause 20 of PBU 2/2008).

If a reliable determination of the financial result of the execution of the contract in a certain quarter is impossible, but there is a possibility that the expenses incurred in the execution of the contract will be reimbursed, then the revenue under the contract is recognized in the income statement in an amount equal to the amount of expenses incurred, which in this reporting period are considered recoverable. Costs for which there is no likelihood of reimbursement are recognized as expenses for ordinary activities of the reporting quarter (clause 23 of PBU 2/2008).

If documented confirmed expenses are not reimbursed by the customer under the contract, then this expected loss is recognized in the appropriate reporting quarter(clause 24 PBU 2/2008). When applying the “as ready” method in each period, the determination of revenue, expenses and financial results is made taking into account income and expenses recognized in previous quarters (clause 25 of PBU 2/2008).

Reflection of revenue and expenses under the contract in accounting

The accounting procedure is explained in clause 26 of PBU 2/2008. Revenue under the contract, recognized in the “as ready” method, is taken into account in the accounting records of the contractor until the final completion of the work (individual stages of work) as a separate asset, which is called “Accrued Revenue Not Presented for Payment.”

To reflect a new type of asset, it is advisable to use account 46 “Completed stages of work in progress.”

In this case, the recognized amount of revenue that is not presented for payment to the customer is reflected in accounting as follows:

Debit 46, subaccount “Accrued revenue not presented for payment”, Credit 90

The amount of revenue under the contract for the reporting period is reflected.

This entry means that the contractor reflects revenue in accounting according to its own calculations, but certificates of work performed in the form KS-2, KS-3 or in any form have not been signed with the customer and invoices for payment have not been presented to the customer.

The work contract often stipulates that the contractor, during the execution of the contract, may issue interim invoices to the customer for payment for work performed. In this case, the corresponding amount of previously accrued revenue presented for payment is written off to the accounts receivable account. As interim invoices are issued to the customer, the following entries are reflected in the contractor’s accounting:

Debit 62 Credit 46, subaccount “Accrued revenue not presented for payment”

The amount of revenue presented for payment to the customer for work performed is reflected.

This entry means that the parties signed the work completion certificate and presented it to the customer.

Upon acceptance of completed work, deficiencies may be discovered. In this case, the customer has the right to declare that he will pay this part of the cost of the work performed only after they have been eliminated.

Clause 26 of PBU 2/2008 states that in the interim invoice it is necessary to separately allocate the amount that the customer will pay after the contractor fulfills some conditions or eliminates work defects. The contracting organization's accountant does not write off this amount of revenue to the accounts receivable account until all the requirements necessary for payment by the customer are met.

What to include in accounting policies

Construction organizations should reflect the following information on construction contracts:

Method for determining the degree of completion of work;

Method of recognition of anticipated expenses (procedure for creating a reserve for anticipated expenses);

Method of distribution of indirect costs between accounting objects;

The procedure for accounting for additional income under the contract.

Disclosure of information in financial statements

The organization's financial statements disclose the following information:

For contracts executed during the reporting period (clause 27 of PBU 2/2008):

The amount of contract revenue recognized in the reporting period.

For each work contract not completed as of the reporting date (clause 28 of PBU 2/2008):

The total amount of expenses incurred and profits recognized (less recognized losses) at the reporting date;

The amount for work performed that is not presented to the customer until certain conditions under the contract are met or until identified deficiencies are eliminated.

In this case, the difference between the two indicators must be shown in the balance sheet (clause 29 of PBU 2/2008). Namely, revenue not presented for payment, which is recognized in the income statement for previous and current reporting periods, must be compared with the amount of accrued revenue on interim invoices presented for payment. The resulting difference is reflected:

– as an asset as accrued revenue not presented for payment (if the difference is positive);

– as a liability as a debt to customers (if the difference is negative).

In the balance sheet, revenue not presented to the customer can be reflected in line 270 “Other current assets”. The second situation, leading to the formation of an obligation, in the author’s opinion, is unlikely.

17. Revenue under a contract and expenses under a contract are recognized on an “as-ready” basis if the financial result (profit or loss) of executing the contract as of the reporting date can be reliably determined.

The “as ready” method provides that revenue under the contract and expenses under the contract are determined based on the degree of completion of work under the contract confirmed by the organization as of the reporting date and are recognized in the income statement in the same reporting periods in which the relevant work was completed, regardless of whether , whether they should or should not be presented to the customer for payment before the complete completion of the work under the contract (the stage of work provided for by the contract).

In the event that a reliable determination of the financial result of the execution of a contract in a certain reporting period is impossible, revenue under the contract is recognized in accordance with paragraph 23 of these Regulations.

18. Regardless of the procedure for determining the price of the work to be performed provided for in the contract, the necessary and sufficient conditions for reliably determining the financial result of the contract are:

confidence that the organization will receive economic benefits associated with the contract;
the ability to identify and reliably determine expenses incurred under the contract.

19. In the case where the contract provides for the payment by the customer of a fixed price for the performance of all work stipulated by the contract or a price determined on the basis of the price fixed in the contract for each unit of work performed (structure, type of work, etc.), in addition to established by point 18 of these Regulations, the necessary and sufficient conditions for reliable determination of the financial result of the execution of the contract are:

the ability to reliably determine the total amount of revenue under the contract;
the ability to identify and reliably determine the costs required to complete the work under the contract;
the ability to determine the degree of completion of work under the contract at the reporting date;
commensurability of the actual amount of expenses under the contract with previously made estimates of these expenses.

The rules of this paragraph also apply in the case where the contract provides for a mixed procedure for determining the price of the work to be performed (for example, as in a contract providing for reimbursement by the customer of all expenses incurred by the organization in connection with the performance of the work provided for in the contract, as well as payment of a percentage of these expenses simultaneously with agreed maximum price for the work to be performed).

20. To recognize contract revenue and contract expenses using the “as ready” method, an organization can use the following methods to determine the degree of completion of work under the contract as of the reporting date:

by the share of the volume of work completed as of the reporting date in the total volume of work under the contract (for example, by expert assessment volume of work performed or by calculating the share of the volume of work performed in physical terms (in kilometers of roadway, cubic meters of concrete, etc.) in the total volume of work under the contract);
by the share of expenses incurred as of the reporting date in the estimated value of total expenses under the contract (for example, by calculating the share of expenses incurred in physical and monetary terms in the estimated value of total expenses under the contract in the same meter).

21. When determining the degree of completion of work under the contract as of the reporting date by the share of expenses incurred as of the reporting date in the estimated total costs under the contract:

Expenses incurred as of the reporting date are calculated only for work performed. Expenses incurred for future work under the contract (for example, the cost of materials transferred to perform the work, but not yet used to fulfill the contract, rent, listed in the reporting period, but relating to future reporting periods), and advance payments to organizations acting as subcontractors under the contract are not included in the amount of expenses incurred at the reporting date;
calculated value total expenses under the contract are calculated as the sum of all expenses actually incurred as of the reporting date and the estimated amount of expenses to be incurred to complete the work under the contract.

22. If, at the reporting date, the organization has doubts about the receipt of the amounts included in the revenue under the contract in accordance with paragraphs 8 and 9 of these Regulations (deviations, claims, incentive payments) and reflected in the statement of financial results for previous reporting periods, then the amounts , regarding the receipt of which there are doubts, are recognized as expenses for ordinary activities of the reporting period. No adjustment is made to contract revenue recognized in previous reporting periods for these amounts.

23. In the event that a reliable determination of the financial result of the execution of the contract in a certain reporting period (for example, at the initial stage of execution of the contract, when the terms of the contract regarding the amount of expenses reimbursed by the customer are specified) is impossible, but there is a possibility that the expenses incurred during performance of the contract will be reimbursed, revenue under the contract is recognized in the income statement in an amount equal to the amount of expenses incurred that are considered recoverable during this reporting period.

Expenses for which there is no likelihood of reimbursement (for example, under contracts that may be recognized as invalid transactions or under which the parties cannot fulfill their contractual obligations) are recognized as expenses for ordinary activities of the reporting period.

If at the reporting date there is uncertainty in the possibility of receipt of all deviations, claims, incentive payments expected under the contract, then the amount that may not be received by the organization (expected loss) is recognized as expenses for ordinary activities of the reporting period (without reducing the amount of previously recognized revenue for agreement). In this case, the amount of the expected loss is recognized regardless of at what stage of the contract the expected loss arose. When uncertainty in the reliable determination of the financial result is eliminated, revenue under the contract and expenses under the contract are recognized in the manner prescribed by paragraphs 17 - 21 of these Regulations, regardless of at what stage of the contract the uncertainty is eliminated.

24. If documented costs under the contract are not reimbursed by the customer, the identified (expected) amount of excess of the costs under the contract over the amount of revenue under the contract (expected loss) is recognized in the corresponding reporting period.

25. When applying the “as ready” method in each reporting period, the determination of contract revenue, contract costs and financial results under the contract is made taking into account contract revenue and contract costs recognized in previous reporting periods under the specified contract.

26. In the accounting of an organization, revenue under a contract, recognized in the “as ready” method, is taken into account until the work (stage) is fully completed as a separate asset - “accrued revenue not presented for payment.”

If, in accordance with the contract, the organization can, during the execution of the contract, issue interim invoices to the customer for payment for work performed, accrued revenue for work presented for payment is written off to accounts receivable as interim invoices are issued to the customer.

If the contract stipulates that part of the amount for work performed is not payable until certain conditions are met or until identified deficiencies in the work are eliminated, then such an amount should be allocated in a suspense account.

Accrued revenue not presented for payment is written off to accounts receivable when issuing an invoice to the customer for payment for completed work under the contract.

2008 and write off expenses and recognize revenue when ready for this agreement?

Yes, it is possible if revenue and expenses under the contract can be determined based on the degree of completion of work confirmed by the organization as of the reporting date. They are recognized in the income statement in the same reporting periods in which the work is performed, regardless of whether they should or should not be presented for payment to the customer until the complete completion of the work under the contract (the stage of work provided for by the contract).

At the same time, the degree of completion of work as of the reporting date is determined based on natural and cost indicators, as well as based on the share of costs incurred in total amount expenses under the contract.

Rationale

From a magazine article Organization of accounting for developers and contractors

2.3. Accounting for long-term contracts

For long-term contracts, the amount of expenses recognized for the purposes of determining the financial result in the reporting period depends on the method used by the organization to determine the amount of revenue under the contract.

Accounting is maintained for each concluded contract and the features of Section II of PBU 2/2008 are taken into account. For the purpose of determining the financial result as of the reporting date under long-term contracts, the estimated amount of expenses is recognized in accounting, regardless of the amount of actual expenses reflected in account 20.

2.3.1. Revenue recognition

– part of the general production expenses taken into account in advance as a debit to account 25;

– part of the expenses of auxiliary production (for example, expenses of the transport department), previously taken into account as the debit of account 23.

The procedure for distributing indirect costs between cost accounting objects is established in the accounting policy of the organization (for example, in proportion to direct costs).

Other expenses. They include costs not related to construction activities, but reimbursed by the customer under the terms of the contract. These include, for example, the costs of carrying out development work.

When preparing for the signing of construction contracts, associated, for example, with the development of a feasibility study, drawing up estimates for construction and installation work, etc., these costs are included in the contract costs. But subject to the following conditions: if they can be reliably determined and if in the reporting period in which they arose, there is a likelihood that the contract will be signed. Otherwise, they are recognized as other expenses of the reporting period in which they were incurred. The organization's expenses incurred in connection with upcoming work are taken into account preliminary as deferred expenses (in the debit of account 97) and are recognized as part of the costs of construction and installation work in accordance with accounting policy organizations.

2.3.8. Accounting Features

In the accounting of an organization, revenue under a contract, recognized using the “as ready” method, is taken into account until the work (stage) is fully completed as a separate asset - “accrued revenue not presented for payment.” The Chart of Accounts does not provide a special account for this. The most appropriate for this purpose is account 46 “Completed stages of work in progress” in correspondence with the credit of account 90 “Sales” subaccount “Revenue”. Accrued revenue reflected in account 46 is closed in the debit of account 62 “Settlements with buyers and customers” on the date when, in accordance with the terms of the contract, the contractor has the right to present interim invoices to the customer for payment (for example, under No. KS-3) or issue invoices for payment of completed work under the contract (completed stage of work).

The amount of actual expenses under the contract is recorded as a debit to account 20 “Main production”. The amount of expenses, which is determined as of the reporting date as expenses under the contract (by the method “by the share of the volume of work performed” or “by the share of expenses incurred”), is subject to debit to account 90 subaccount “Cost of sales” from the credit of account 20.

If the amount of expenses under the contract, determined as of the reporting date, exceeds the amount of actual expenses reflected in the debit of account 20 (this is possible when applying the “per share of work completed” method), then the difference should be charged to the debit of account 20 from the credit of account 76 "Other debtors and creditors." To do this, a special sub-account “Deviations of expenses under the contract” is opened on account 76. In the reporting period, when the amount of expenses under the contract, reflected in the debit of account 20 on an accrual basis, is equal to or exceeds the amount of expenses under the contract recognized to determine the financial result on the reporting date on an accrual basis from the beginning of construction, the balance on the credit of account 76 is written off to account 20 (Debit 76 Credit 20).

If the cost of work under the contract is subject to VAT, but on the reporting date the result of the work has not been transferred to the customer (the moment of determination tax base did not occur), then the contractor can reflect the amount of tax in accounting without attributing it to settlements with the budget: Debit 90 subaccount “VAT” Credit 76 subaccount “VAT settlements”. And only after the result of the work is transferred to the customer, the tax amount is reflected in settlements with the budget: Debit 76 Credit 68.

Typical accounting entries for accounting for transactions under long-term construction contracts are as follows:

DEBIT 20 (25, 26) CREDIT 10
– expenses under the construction contract are reflected;

DEBIT 19 CREDIT 60
– VAT on purchased materials and services of third parties is taken into account;

DEBIT 68 CREDIT 19
– produced tax deduction on “input” VAT;

DEBIT 20 CREDIT 25 (26)
– general business and general production expenses are written off for the cost of construction;

DEBIT 51
LOAN 62 subaccount “Advances received”
– an advance was received from the customer;

DEBIT 46 CREDIT 90
– accrued revenue not presented for payment is reflected;

DEBIT 90 CREDIT 76
– deferred VAT was accrued on sales as of the reporting date;

DEBIT 90 CREDIT 20
– reflects the amount of expenses as of the reporting date;

DEBIT 20 CREDIT 76
– the amount of excess of expenses recognized in accounting at the reporting date over the actual expenses of the organization is attributed;

DEBIT 76 CREDIT 20
– the amount of excess expenses recognized in accounting at the reporting date is attributed to actual expenses when the specified expenses under the contract on an accrual basis equaled or exceeded the amount of expenses recognized for the purposes of determining the financial result as of the reporting date on an accrual basis from the date of commencement of construction:

DEBIT 62 CREDIT 46
– reflects the amount of revenue presented for payment to the customer;

DEBIT 76 subaccount “VAT”
CREDIT 68
– VAT is charged on sales on the date of transfer to the customer of the result of the work performed.

2.3.9. Accounting for expected losses

The concept of “loss” can only be applied to the financial result of the contract as a whole, and not for a separate reporting period. And it is expected because it is revealed during the execution of the contract, when the final financial result under the contract has not yet been released.

If a loss is identified upon termination of the contract, then this loss is no longer expected, but actual.

The term “expected loss” is found in articles and PBU 2/2008.

The amount of this revenue is determined by the taxpayer independently. For example, if the parties to a contract monthly sign Form No. KS-2, the amount of revenue can be determined based on the data in this unified form.

When recognizing revenue under long-term contracts in each reporting (tax) period, work in progress in relation to direct expenses is usually not accounted for. After all, the costs of work in progress are the costs of work, the results of which have not been transferred to the customer. By determining (conditionally) the amount of revenue for the reporting period, the contractor determines the cost of the work conditionally delivered to the customer. And since this cost of work, as a rule, is calculated based on the cost of actually completed work as of the reporting date (confirmed by form No. KS-2), there is no work left conditionally not delivered to the customer. This means that there is no work in progress.

It turns out that this document should be used not only contractors, and all subjects of construction activities. At the same time, this standard applies to the developer if he:

is not a shareholder (investor);
is an investor, but there are also other shareholders or investors to whom he provides developer services.

If the developer builds only for himself (combines the functions of the developer and the sole investor), this standard applies only to his expenses.

The requirements of PBU 2/2008 apply only to long-term contracts, the terms of which cover several years (clauses 1, 2 of PBU 2/2008). This means that PBU 2/2008 does not apply to work started and completed within one year. That is, if a construction organization delivers work in stages, for example monthly, then it will not apply PBU 2/2008. If the work is rented for more long term, but the agreement “does not apply” on December 31, then PBU 2/2008 does not apply. In addition, from using of this document Small enterprises have the right to refuse by stating this rule in their accounting policies (clause 2.1 of PBU 2/2008).