We talked about what the limitation period is, how it is calculated, when it is suspended or interrupted. In this article we will talk about writing off debt for which the statute of limitations has expired.
Why do you need to write off debt?
It is indicated that receivables or payables for which the statute of limitations has expired are written off for each obligation on the basis of inventory, written justification and order of the manager. Written off debts are included in the financial results of the organization as part of other income (when writing off a creditor) and other expenses (when writing off accounts receivable). If a reserve was created for doubtful accounts receivable, such debt is written off against the reserve. Expenses will include only that part of the debt for which the reserve was not enough.
Write-off of receivables and payables is possible even before the statute of limitations, if such debts are considered unrealistic for collection (repayment). This is possible, for example, when the debtor is excluded from the Unified State Register of Legal Entities in the event of liquidation.
The write-off of accounts payable in accounting can be reflected by the following entries ():
Debit of accounts 60 “Settlements with suppliers and contractors”, 70 “Settlements with personnel for wages”, 76 “Settlements with various debtors and creditors”, 67 “Settlements for long-term loans and borrowings”, etc. - Credit of account 91 “Other income and expenses", subaccount "Other income"
And the write-off of receivables upon expiration of the limitation period will be reflected as follows:
Debit account 91, subaccount “Other expenses” - Credit accounts 62 “Settlements with buyers and customers”, 71 “Settlements with accountable persons”, 76, etc.
If accounts receivable are written off using funds from a previously created reserve, instead of account 91, account 63 “Provisions for doubtful debts” is debited.
However, writing off receivables due to the debtor's insolvency does not lead to complete cancellation of the debt. Such a debt must be listed on the balance sheet for 5 years from the date of writing off the debt in case of its collection in the event of a change in the debtor’s property status (paragraph 2, paragraph 77 of Order of the Ministry of Finance dated July 29, 1998 No. 34n).
This means that an accounting entry is made for the amount of written off receivables (Order of the Ministry of Finance dated October 31, 2000 No. 94n):
Debit of account 007 “Debt of insolvent debtors written off at a loss”
Tax accounting for debt write-off
When calculating income tax, the amount of accounts payable written off due to the expiration of the statute of limitations or for other reasons is included in non-operating income (
Currently, increasingly stringent requirements are being placed on the accuracy and reliability of financial statements. The requirements for reflecting deferred expenses have changed, reserves and estimated liabilities are being created, and all significant reporting indicators are being closely monitored. These indicators include the amounts of receivables and payables.
Enterprises must monitor receivables and payables, monitor repayment periods, actively work with receivables, promptly write off bad debts in accounting and recognize them as income or expenses in taxation.
When maintaining records and exercising control, many questions arise related to the nuances of accounting for payments at an enterprise; one should take into account the requirements of civil and tax legislation, do not forget the provisions on accounting, pay attention to arbitration practice, and take into account the wishes of the Ministry of Finance and tax authorities.
In our article we will try to highlight the mechanism for monitoring and writing off bad debts, by adhering to which, the accountant will be able to avoid significant distortions in reporting indicators in terms of receivables and payables.
1. Debt subject to write-off
In order to write off a debt, regardless of its type, grounds are needed. Let's look at the reasons why debt is written off.
In accordance with the Tax Code:
- Accounts payable are written off as non-operating income due to the expiration limitation period or on other grounds (except for amounts of debt to the budget and extra-budgetary funds written off or reduced in accordance with the law) in accordance with clause 18 of Article 250 of the Tax Code of the Russian Federation.
- Accounts receivable are written off as non-operating expenses (or at the expense of the created reserve) if such debt is recognized as a bad debt (clause 2, clause 2, article 265 of the Tax Code of the Russian Federation). At the same time, bad debts (debts that are unrealistic for collection) are debts for which the established deadline has expired. statute of limitations, as well as those debts for which, in accordance with civil law, the obligation discontinued due to the impossibility of its execution, on the basis act of a government body or liquidation organizations (clause 2 of article 266 of the Tax Code of the Russian Federation).
- Accounts receivable for which statute of limitations has expired, other debts that are unrealistic to collect are written off for each obligation based on the inventory data, written justification and order of the manager. Such amounts are credited to the reserve for doubtful debts or to the financial results of a commercial organization or to an increase in expenses of a non-profit organization (clause 77 of the Regulations).
Note:Writing off a debt at a loss due to the debtor's insolvency does not constitute cancellation of the debt. This debt should be reflected off the balance sheet within five years from the moment of write-off to monitor the possibility of its collection in the event of a change in the debtor’s property status.
- Amounts of accounts payable and depositors for which statute of limitations expired are written off for each obligation based on the inventory data, written justification and order of the manager. These amounts are attributed to the financial results of a commercial organization or an increase in income for a non-profit organization (clause 78 of the Regulations).
- Expiration of the limitation period (for tax and accounting purposes).
- impossibility of fulfilling an obligation (based on an act of a government body) or liquidating an organization (for tax and accounting purposes).
- Unrealistic recovery (for accounting purposes).
In accordance with Art. 196 of the Civil Code, the general limitation period is set at three years. It begins to flow from the moment the organization learned of a violation of its rights (for example, from the day when payment from the buyer was supposed to be received and was not received according to the terms of the contract).
At the same time, according to Art. 203 Civil Code of the Russian Federation, limitation period interrupted filing a lawsuit, as well as the debtor taking actions indicating recognition of the debt (for example, signing a reconciliation report).
After the break, the limitation period begins again. The time elapsed before the break does not count towards the new deadline.
Note:With the expiration of the limitation period for the main obligation, the period for additional obligations (guarantee, pledge, etc.) also expires. A change of persons in an obligation does not entail a change in the limitation period.
Second criterion - impossibility of fulfilling obligations.
The impossibility of fulfilling obligations is recognized:
- If there is an act of a government body.
However, do not be afraid of difficulties. The Ministry of Finance and the Supreme Arbitration Court support the position of taxpayers.
So, according to the letter from the Ministry of Finance dated October 22, 2010. No. 03-03-05/230, before amendments are made to Article 266 of the Tax Code of the Russian Federation, the issue of declaring debt impossible to collect under the act (resolution) of the bailiff on the completion of enforcement proceedings must be resolved taking into account established judicial practice.
At the same time, in its letter, the Ministry of Finance refers to the Determination of You dated 02/07/2008. No. 2727/08 in case No. A60-3260/2007-C6. In it, the court indicated that the receivables, in respect of which the bailiff issued a decision to terminate enforcement proceedings on the basis of the norm of Law No. 229-FZ “On Enforcement Proceedings,” are recognized as uncollectible for profit tax purposes on the basis of clause 2 of Article 266 Tax Code of the Russian Federation.
- Upon liquidation of the debtor's (or creditor's) organization.
At the same time, the liquidation of a legal entity is considered completed, and the legal entity is considered to have ceased to exist after making an entry about this in the Unified State Register of Legal Entities (clause 8 of Article 63 of the Civil Code of the Russian Federation).
Third the criterion is the unreality of debt collection according to the organization itself.
It can be used only for accounting purposes, not forgetting to provide a written justification and obtain an order from the manager to write off such debts.
At first glance, there is no point in using this criterion. However, in organizations with a large number of small debts, the collection of which in pre-trial proceedings did not lead to a positive result, and the costs of the courts may exceed the debt itself, it makes sense to optimize accounting by writing off such debts based on the results of the inventory at the expense of the net profit of the enterprise.
2. Write-off of accounts receivable in accounting and tax accounting
So, after conducting another inventory of receivables, we identified debts for which, in accordance with the contract (or for other reasons), the statute of limitations had expired (an act of a state body was received or a legal entity was liquidated).
Documents confirming the existence of receivables and the expiration of the statute of limitations on them:
- Agreement or invoice, documents confirming the fact of payment.
- Invoices, certificates of services rendered, work performed.
- Reconciliation acts confirming the debt (not required, but highly desirable).
- Written demands for debt repayment.
- Act (decree) of the bailiff on the completion of enforcement proceedings.
- An extract from the Unified State Register of Legal Entities confirming that the liquidation of the legal entity - the debtor - has occurred.
The documents have been collected, the inventory has been carried out, the “Act of Inventory of Settlements with Buyers, Suppliers and Other Debtors and Creditors” INV-17 has been drawn up, the order to write off receivables has been signed by the manager. We prepare an accounting statement.
In accounting We make the following transactions:
- In case a provision for doubtful debts has been created.
Debit
Note:The mere fact of writing off a debt due to the debtor's insolvency does not constitute cancellation of the debt. The written-off receivables are subject to accounting on off-balance sheet account 007 “Debt of insolvent debtors written off at a loss.” Analytical accounting for account 007 is maintained for each debtor whose debt is written off at a loss, and for each debt written off at a loss.
- In case the valuation reserve was not created or its amount is insufficient to cover the debt being written off.
Debit account 007 “Debt of insolvent debtors written off at a loss” - reflects receivables written off due to the impossibility of collection.
Note:if there are receivables and payables for the same counterparty, in order to avoid tax risks should first be carried out unilaterally netting and only then write off accounts receivable as expenses (if they did not overlap with accounts payable).
In tax accounting:
- If a reserve for doubtful debts was created in accordance with Article 266 of the Tax Code of the Russian Federation, then it is used to cover losses from bad debts. If the reserve amounts are insufficient, then the amount of the difference (between the amount of the used reserve and the amount of debt) is included in non-operating expenses.
- If a reserve for doubtful debts has not been created, the debt is written off as non-operating expenses.
3. Write-off of accounts payable in accounting and tax accounting
In order to timely and completely write off accounts payable with an expired statute of limitations, it is necessary to regularly conduct an inventory of such debt.
We remind you that in accordance with clause 12 of the Law “On Accounting” No. 129-FZ, the organization obliged carry out inventory before preparing annual financial statements.
If a payable is discovered for which the statute of limitations has expired, it is written off as part of the organization’s income for accounting and tax purposes.
At the same time, the recognition of income for tax accounting purposes occurs in the tax period in which the statute of limitations expired and is not tied to the dates of the inventory and the manager’s order to write it off.
Note:violation of law 129-FZ in part mandatory carrying out an inventory and the absence of an order from the manager to write off accounts payable is not the basis for not including accounts payable with an expired statute of limitations in non-operating expenses of that tax period, in which it expired statute of limitations. This is exactly the position set forth by the Supreme Arbitration Court of the Russian Federation (Resolution No. 7462/09 dated 06/08/2010).
Documents confirming accounts payable and the expiration of the limitation period for them:
- Agreement or invoice, documents confirming the fact of payment received.
- Received invoices, certificates of services rendered, work performed.
- Reconciliation acts confirming the debt (a very important document confirming the statute of limitations).
- Written responses to demands for debt repayment and such demands themselves.
- Other documents confirming the fact of the debt and the beginning of the limitation period.
In accounting We make the following transactions:
Debit settlement accounts (60, 62, 70, 71, 73, 76) Credit account 91.1 “Other income” - accounts payable with an expired statute of limitations are written off as other income.
In tax accounting:
- Accounts payable are written off as non-operating income on the date of expiration of the limitation period.
Accounts receivable is part of the organization's working capital, representing the amount of obligations of third parties to the enterprise. Occurs, for example, when products have been shipped but not yet paid for. The amount is reflected in section II of the balance sheet.
There are several sources of asset formation:
- advances issued to partners;
- buyer obligations;
- debts of subsidiaries, branches;
- obligations of the founders;
- loans to individuals.
Depending on the repayment period, it is:
- short term, that is, must be paid within 12 months;
- long term, if payments are provided later than in a year.
A debt not repaid on time is called overdue. Depending on the reason for the delay, there are two types:
- Doubtful. Occurs if the obligations of third-party organizations that were not repaid within the period established by the contract were not secured by a pledge or a guarantor.
- Hopeless. Formed when a debt becomes impossible to collect. For example:
- the debtor is declared bankrupt by the arbitration court;
- the counterparty was excluded from the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs due to liquidation;
- The period for filing a claim has expired (statutory debt).
Why is write-off necessary?
The organization is obliged to conduct an inventory of calculations every year before submitting reports. This method identifies overdue obligations that must be demanded from the counterparty. If it is impossible to obtain money, the debt must be written off.
The amount of overdue debt is in the asset balance sheet of the organization, so the amount is included in the financial statements.
Since the company cannot freely dispose of these funds and they do not bring economic benefits, the reporting becomes unreliable. It does not provide the user with information about the real financial position of the enterprise. The situation that has arisen can seriously damage the company.
For example, after reviewing the organization’s balance sheet, the bank approved the issuance of a loan. Experts believed that the obligations could be repaid by returning the “debt”. But the amounts of assets indicated in the statements are hopeless, their statute of limitations has expired. If the bank fails to repay the loan, serious claims may be brought, including charges of fraud and deliberate misrepresentation of data.
A problem may arise when concluding a large transaction. The partner, having studied the counterparty’s statements, notices a large amount of receivables. Fearing that the company will not be able to fulfill its obligations, he may refuse to enter into an agreement.
What documents are required?
The debt amount is written off only after the expiration of the statute of limitations. The company must have evidence confirming the reality of the hopelessness of the debt:
- an extract from the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs, indicating the liquidation of the counterparty;
- a court decision and notification from the arbitration manager about refusal to repay the debt due to insufficient funds;
- a certificate from the tax office confirming the liquidation of the company;
- act of the bailiff about the impossibility of repaying the debt.
Without the listed documents, the creditor company has no right to write off the amount from the balance sheet.
If there are documents appropriate to the situation, the company can begin the procedure for writing off overdue obligations of debtors. For this you need the following official documents:
- Agreement. In its absence, the company will have to defend the legality of the operation in court.
- Primary accounting documents confirming the fact of shipment of products, performance of work, etc. These include certificates of completed work, etc.
- indicating the results. It confirms the existence of an overdue debt, its amount, and the statute of limitations.
- Leader's order.
Write-off in accounting
In accounting, the amount of debt is recorded on account 62 “Settlements with buyers and customers” separately for each counterparty. Organizations' liabilities are reflected in the debit balance.
Write-off is carried out using one of the following methods:
- Due to the reserve. An organization can open a special account 63 “Reserves for doubtful debts”. The amount of the resource is determined for each debt separately, depending on the assessment of the partner’s solvency. The creation of the reserve is accompanied by an entry in the debit of account 91.2 “Other expenses” and credit 63. The written-off debt remains for 5 years in account 007 “Debt of insolvent debtors written off at a loss.”
When writing off at the expense of a reserve, the following entries are made in accounting:
Repayment by the counterparty of already written-off debt is reflected as follows:
Example. Gamma LLC supplied products to Desyatka LLC in the amount of 70 thousand rubles. Payment was received in the amount of 30 thousand rubles. The remaining debt was not repaid within the period established by the agreement, since Desyatka LLC was declared bankrupt. 3 years after payment, Gamma LLC writes off the balance from the reserve: - For expenses. If the company does not have a reserve, the debt should be written off as a loss. In this case, account 91 “Other income and expenses”, subaccount 2 “Other expenses” is used.
Postings for accounting for debt without using a reserve:
Example. Regul LLC supplied products to Sirius LLC in the amount of 20 thousand rubles. Payment was not received for three years, Regul LLC wrote off the bad debt. Six months later, Sirius LLC paid for the supplied products:Business transaction Debit Credit Amount (thousand rubles) Products of Sirius LLC have been shipped 62 90 20 The debt of Sirius LLC was written off due to the expiration of the statute of limitations 91.2 62 20 Debtor's obligations taken into account 7 20 Payment received from Sirius LLC 51 91.1 20 The paid amount has been written off 7 20
All the nuances of this procedure are discussed in detail in the following video:
Write-off in tax accounting
If the organization has a reserve, then the obligations of the debtor company are written off at the expense of this resource. At the same time, the procedure does not affect the amount of income tax. If the amount of debt is greater than the amount of deductions, the balance is included in non-operating expenses and reduces the tax base in the current period.
If an organization has opened account 63, but there have been no contributions to the reserve for the overdue debt, then some points need to be taken into account when writing off. For tax purposes, it is not allowed to repay debt from the reserve accrued for other obligations. In such a situation, the organization writes off the amount due to increased expenses. The amount of debt reduces taxable income in the current period.
If the company did not open a reserve at all, then the entire amount of overdue debt is taken into account in other expenses.
After the write-off procedure, registration of accounting entries and reduction of income tax, the organization must retain all documents that serve as the basis for the operation.
An organization that recognizes receivables as uncollectible can write off the amount of the debt and thereby reduce the size of the tax base when calculating income tax. In the article we will analyze the step-by-step procedure for writing off bad debts: how to recognize a debt as bad, what is the procedure for writing off bad debts in accounting and tax accounting.
What debts are considered bad?
The procedure for recognizing debt as bad is approved in paragraph 2 of Art. 266 Tax Code of the Russian Federation. A debt is considered unrecoverable if one of the following conditions is met:
- The statute of limitations for debt collection has expired. In general, the statute of limitations for debt collection is three years from the date of expiration of payment (performance of work) under the contract.
- The impossibility of debt collection is established by an act of a state body or a resolution on the liquidation of an enterprise.
- The debtor is declared bankrupt, the debt cannot be collected on the basis of the Bankruptcy Law.
- The creditor is released from the obligation to repay the debt based on the order of the bailiff.
If the debt is uncollectible for several reasons at once (for example, the statute of limitations has expired and the creditor has been declared bankrupt), then the impossibility of collecting the debt is recognized upon the occurrence of the first of the grounds. This statement follows from the explanations of the Ministry of Finance given in letter No. 03-03-06/1/373 dated June 22, 2011.
Let's look at an example . On January 22, 2015, Format JSC transferred an advance payment in favor of Flagman LLC for construction and repair work in the amount of 22,050 rubles.
Based on the terms of the contract, Flagman begins work immediately after receiving the advance payment. The deadline for completing work under the contract is no more than 30 calendar days.
Since the prepayment to the Flagman account was transferred on 01/22/2015, the contractor had to start work the next day (01/23/2015), and hand over the work within a calendar month (no later than 02/23/2015). The contractor did not complete the work within the specified period.
On February 18, 2018, Flagman was declared bankrupt based on a corresponding court decision. On February 23, 2018, that is, 3 years after the expiration of the contractor’s obligations under the contract, the statute of limitations for debt collection expired.
The debt of Flagman LLC to Format JSC is in the amount of 22,050 rubles. is recognized as hopeless upon the occurrence of the first of the grounds, namely, declaring the contractor bankrupt.
The procedure for writing off bad debts: step-by-step instructions
Debt write-off is carried out on the basis of an order from the manager or a decision of the board, drawn up in accordance with the current local regulations of the company.
Below are step-by-step instructions that will help an accountant understand the specifics of writing off bad debts and how to account for the written-off amounts in accounting and in calculating income taxes.
Step #1. Approval of the procedure for recognizing debt as bad
At the first stage, approve the procedure for recognizing debt as bad and the subsequent mechanism for writing off debt in local regulations.
As a rule, the procedure for writing off bad debt is fixed in the accounting policy. But the organization retains the right to draw up a separate document that would fully describe the algorithm for recognizing the debt as unrealistic for collection, and would also regulate the procedure for further writing off receivables.
When drawing up a local act, approve the following provisions:
- Conditions for recognizing a debt as uncollectible. When drawing up a document, be guided by the legal requirements that justify the recognition of a debt as hopeless and necessary to be written off (expiration of the statute of limitations, bankruptcy, liquidation of the debtor, release of the creditor from obligations based on a court decision, etc.).
- Reasons for writing off debt. In the local act, indicate that after a debt is recognized as bad, the amount of the debt is subject to write-off based on the order of the manager or the decision of the board.
- The procedure for accounting and tax accounting of debt write-off transactions. If the procedure for writing off debt is regulated by accounting policy, then when drawing up the document, describe the specific entries for writing off debt, as well as the mechanism for accounting for expenses when calculating income tax.
Step #2. Registration of bad debts for write-off
After the statute of limitations has expired or due to other circumstances, file a bad debt for write-off in the following order:
- Drawing up an order to recognize a debt as bad. Based on the provisions of local regulations, it is necessary to issue an order declaring the debt uncollectible in accordance with the existing grounds. The order can be drawn up in free form, in compliance with the rules of the Civil Code of the Russian Federation. The text of the order must contain references to the grounds for recognizing the debt as uncollectible (number and date of a local regulatory act, article of the Tax Code, federal law, etc., number of a court ruling, etc.).
- Drawing up an accounting certificate. Draw up an accounting certificate in which you indicate the circumstances of the debt, referring to the numbers and dates of payment documents, and also reflect the total amount of the debt. Attach to the accounting certificate a reconciliation report with the debtor (if available).
- Drawing up an inventory report for accounts receivable. Another documentary basis for writing off bad receivables is an inventory report drawn up on the INV-17 form (a sample can be downloaded here ⇒).
- Issuing an order to write off bad debts. Based on the order recognizing the debt as uncollectible and in accordance with the accounting certificate, issue an order to write off the bad debt in the manner prescribed by the accounting policy.
Step #3. Reflection of write-offs in accounting
Based on the order, reflect the write-off of the bad debt in your accounts.
If the company’s accounting policy provides for the formation of a reserve for doubtful debts, then the write-off of bad debts is reflected in the following entries:
Please note that the entire debt amount is subject to write-off, including VAT.
If the company does not create reserves for doubtful debts, then the write-off of bad debts is reflected in accounting as part of other expenses:
Step #4. Tax accounting for writing off bad debts
Expenses incurred in connection with the write-off of bad receivables are included in the calculation of income tax in full. This rule applies both when the debt is written off from the reserve for doubtful debts, and provided that the amount of debt is reflected as part of other expenses immediately at the time of write-off.
Accounts receivable is one of the most significant indicators of financial statements. The write-off of accounts receivable is preceded by a lot of analytical and organizational work: identifying problematic accounts and debtors, and the possibility of debt collection. If it is impossible to collect the debt, it should be written off. At the same time, an accountant needs to know not only accounting and tax legislation, but the Civil Code and arbitration court practice.
In what cases should a debtor be written off?
There are legitimate reasons to write off debt. They are confirmed by documents from third-party organizations. These papers are the basis for entries in BU and NU.
- The statute of limitations has expired. This means that the company cannot file a lawsuit for debt collection, since 3 years have passed since the organization learned of a violation of contractual obligations by the counterparty: for example, it received a refusal to pay for goods, work, or services after delivery under the contract. The period is interrupted if the organization files a lawsuit or the debtor confirms in writing the existence of obligations to the organization (Civil Code of the Russian Federation, Art. 196-1, Art. 200, Art. 203).
- The government agency signed an act on the impossibility of collection. This refers to the act of the bailiff as the basis for writing off the debt. Despite individual attempts by local Federal Tax Service officials to challenge this basis for write-off, the Tax Code of the Russian Federation and judicial practice indicate its legality (Article 266-2 of the Tax Code of the Russian Federation, Op. VAS No. 2727/08 on case No. A60-3260/2007-C6 from 02/07/08).
- The debtor organization ceased to exist as a legal entity. The basis for write-off will be an entry in the Unified State Register of Legal Entities in relation to the debtor (Article 63–9 of the Civil Code of the Russian Federation).
On a note! On similar grounds, debts to creditors can be written off.
Accounts receivable can also be written off due to the impossibility of collecting them, as assessed by specialists from the company itself. This option is applicable if the economic analysis revealed that going to court is inappropriate. Usually in such cases we are talking about small volumes of receivables, compared to significant legal costs in the future (see letters of the Ministry of Finance No. 03-03-06/1/3 dated 13-01-09, No. 03-03-06 /1/124 dated 02/21/08, determined by the Supreme Arbitration Court of the Russian Federation No. 9473/08 dated 07/30/08, FAS MO No. KA-A40/13269-08-P-2 dated 02/02/09 g. and a number of similar ones).
Write-off sources
- At the expense of . One of the sources through which accounts receivable can be written off is the creation of a reserve for doubtful debts. However, only companies that determine shipment revenue can create it. The general reservation procedure is determined by Art. 266-4 Tax Code of the Russian Federation. The reserve includes the full amount of the debt, the term of which exceeded 3 months, half the amount - if the period is from 45-90 days. Receivable amounts with a shorter term are not taken into account. At the same time, the amount expected to be transferred from the debtor is also reserved. The amount of reserved funds is limited, above 10% of revenue for the tax and settlement period.
- If there is no reserve in the organization. The receivables must be written off at the expense of other expenses, i.e. it will affect the value of the final indicators in one way or another.
- Source: net profit. The decision to write off receivables is made exclusively by the general meeting of founders, since such actions directly affect the financial result.
Accounting for writing off accounts receivable
To begin with, let us recall that if for the same counterparty there is, in addition to accounts receivable, accounts payable, you must first offset the amounts, and then, if accounts receivable are eventually identified, write them off.
The following documents confirm the debt:
- acts, invoices as confirmation of the provision of services, supply of goods, performance of work;
- acts of reconciliation with partners;
- letters demanding repayment of debt, official responses to them;
- payment documents that reflect the amounts paid by the organization, etc.
Their presence is necessary, among other things, in order to record and confirm the statute of limitations.
Important! Documents are stored for at least 5 years after the amounts are written off.
BU postings are generated depending on the sources of write-off. The coverage of written-off receivables by the created reserve for doubtful debts is reflected by the posting Dt 63 Kt 60, 62, 76. Debts not covered by the reserve are included in other expenses: Dt 91/2 Kt 60, 62, 76. Similarly, i.e. By debit 91/2 in correspondence with the corresponding settlement accounts, receivables are taken into account if there is no reserve in the organization.
If the general meeting decides to reduce net profit by the amount of written off receivables, an entry is made Dt 84 Kt 60, 62, 76 and etc.
The written-off debt must be taken into account on the balance sheet Dt 007 for 5 years and only then make a final write-off.
Tax accounting for writing off accounts receivable
For NU purposes, accounting documents confirming the fact of the receivable and its limitation period are stored for 4 years. If a loss occurs, this period is counted from the period of reduction of the tax base by the amount of the loss indicator.
Depending on the availability of a reserve to cover doubtful debts, the NU takes into account the debt either according to the rules of Art. 266 of the Tax Code of the Russian Federation, or referred to. Entries for NU purposes are made upon the occurrence of the earliest of the following events:
- expiration of the statute of limitations;
- receipt of acts and other documents from bailiffs regarding the impossibility of collection;
- the appearance of an entry in the Unified State Register of Legal Entities with information that the debtor has ceased its activities.
An advance payment recognized as uncollectible leads to the need to restore the amount of VAT on it.
If the debtor recognized as hopeless is an individual, then when writing off the receivables, the organization acquires the responsibilities of a tax agent for personal income tax and is obliged to transfer tax for the individual, and if the debtor was an employee of the organization, then it is obliged to transfer contributions to the Funds for him (see letter of the Ministry of Finance No. 03-04-06/4-27 dated 08-02-12 and similar clarifications from the Federal Tax Service).
On a note! A company that uses the simplified taxation system “income minus expenses” does not have the right to include written off receivables in income and expenses for tax purposes, since it uses the cash method of accounting for income (Article 346.17-1 of the Tax Code of the Russian Federation). Such debt is taken into account only in accounting.
Results
- Write-off of accounts receivable is carried out on the basis of internal primary documentation and acts, decisions of government agencies.
- If an organization has both receivables and payables to the same counterparty, it is necessary to first offset the amounts and then proceed to write-off.
- Debt is written off from other expenses or from reserved amounts.
- To write off accounts receivable at the expense of net profit, a decision of the general meeting is required.
- In NU, written-off debt is covered by the reserve for doubtful debts or is classified as non-operating expenses.
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