Reserve for the reduction of the value of material assets: posting and creation

Reserves are one of the sources of the enterprise needed to cover losses in connection with the depreciation of inventories. Usually they are formed at the end of the year. At the same time, the book value of property for which an insurance fund is created is changing. In order to collect information on accounting transactions, the amounts are reflected on account 14. Let us examine in detail the process of formation and use of the amounts of this fund.

general characteristics

Reserves are part of the sources of an enterprise grouped by designation in special insurance funds. The main goal of their education is the company's recognition of the possibility of an unfavorable financial situation: the excess of expenses over income. In particular, a reserve for the reduction of the value of material assets is created when their market estimates the property below the cost of its actual cost price. Most often this is due to damage to property or its physical and moral obsolescence.

The value of the asset in the balance sheet is reflected net of the amounts taken into the reserve for the reduction of the value of tangible assets. The posting at creation looks so: the account of other expenses is debited, the account 14 is credited.

Rules for the creation of reserves

One of the main documents regulating accounting at the enterprise is the accounting policy. It contains detailed information about:

• Whether there is a possibility of creating reserves and what;
• How often to re-evaluate inventory;
• On which sources of information about current prices rely on the calculation;
• And other specific and general rules for the formation of this reserve.

Let us examine an example of the main part of accounting policy regarding this fund:

1. The provision is formed on the basis of property balances at the end of each quarter after its revaluation, which must be completed on or before the 25th day following the reporting date of the month.
2. A check for the loss of the value of assets is made only for those funds whose value at the date of compiling the report exceeds 250 thousand rubles.
3. For the correctness of determining the market value of commodities, you can use: the prices of similar assets purchased in recent deliveries, the average value of the property value for the region, the latest resource cost data for similar values. If additional costs are required to sell the valued commodities, their value should be deducted from the market value.
4. Based on the received data, a reserve is created for every nomenclature number or group of similar property to reduce the value of material assets. The posting is used such: the account 91.2 is debited, the account 14 is credited. The obligatory condition is the positive difference between the first and second indicator.
5. The costs and revenues generated by the creation and liquidation of the reserve lead to a permanent obligation in the form of a tax or a tax asset.

Compliance with the requirements of the accounting policy for the creation of a fund is a mandatory requirement for the accountant.

Accounting records

To collect such information, an account 14 has been created. This is an active-passive account with a one-way balance, the data of which is used in the calculation of the balance line "Inventories". When creating a reserve, the amount is indicated in the loan. Write-off is made on a debit basis. Closing the account assumes that all balances will be spent for the next reporting period. The data of synthetic accounting are reflected in the journal-order No. 10-1. Analytical accounting is conducted for each unit of inventory (according to the nomenclature number or category of similar property).

Rules for creating

The reserve for the reduction of the value of material values is a method of analyzing and grouping the depreciated property. It should be created only when the value of its possible realization falls or becomes lower than the actual cost price. It should not be allowed to depreciate large categories of property. For example, you can not write off all fixed assets or materials in the reserve.

The enterprise undertakes to provide a calculation of the value of the funds for the amount of which the insurance fund is created. The reserve for reducing the value of material assets is formed at the expense of the financial results of the enterprise.

Calculation of reserve amount

As a rule, the accountant resorts to creating reserves before the formation of statements at the end of the year. In the course of revaluation of inventory and the detection of depreciation of a certain property, it becomes necessary to write off the amounts in the reserve for the reduction of the value of tangible assets. The posting describing this process consists of a debited account 14 and a credited 91 account.

The total value of the property transferred to the reserve is determined by the formula: P = C of the _market. - With a _fact. , Where:

• From the _market. - market value of the asset;
• With _fact. - the actual cost of property.

If it turns out that the value of the actual prime cost of a unit of commodities will turn out to be greater than the market value, the accountant has no right to create a reserve. Values used in the calculation should be taken from current and reliable sources containing official data on exchange and market processes.

Example of formation of a reserve in an enterprise

Consider how the reserve is formed to reduce the value of material values: in the balance sheet of the organization at the end of 2014, materials of a similar nature are listed for 2 million 120 thousand rubles (including VAT for 120 thousand rubles). The next inventory showed that it is possible to sell assets only for 900 thousand. A decision has been made to form an insurance fund on these materials. Create a reserve for the required amount and execute the transaction with the appropriate posting.

To begin with, we will calculate the amount for which a reserve will be formed to reduce the value of tangible assets in 2014:

• 2 120 000 - 120 000 - 900 000 = 1 million 100 thousand rubles.

Then it is necessary to make the account assignment: the account 91.2 is debited, the account 14 on the revealed sum is credited. Now, when compiling the annual financial statements in the balance sheet, the market value of the impaired materials will be indicated, equal in this case to 900 thousand rubles.

Recovery of provision

The amounts previously sent to a separate fund for the reduction of value can be restored if:

• The property is disposed of on any grounds;
• The market value of the reserved assets increased.

The property that has returned to the market reflects at market value, and the difference between the value of the created reserve and the increased price is written off as other income. The posting is performed as follows: the account is debited, account 91.2 is credited. The same write-off scheme is applied if the property is written off for production or sale.

Example of registration of property retirement from the reserve

Let's consider the process of creating and further writing off the amounts from the fund for the reduction of the value of commodities. As a basis, we accept the following condition: at the end of the reporting year, 170 m of cotton material costing 62 rubles per meter was in the warehouse of the enterprise. But the market price changed from the moment of purchase and became equal to 50 rubles. Management decided to create a reserve. At the beginning of next year, 120 m of cotton cloth for 62 r. Per meter. Calculate the amount of the reserve during the creation and after the sale of the material and make the entries.

Let's perform the following actions:

1. Determine the amount of the reserve: 62 × 170 - 50 × 170 = 2040 р. - the amount that must be written off in the reserve for the reduction of the value of material values. Posting: account 91.2 is debited, account 14 is credited.
2. Revenues from the sale of material amounted to: 62 × 120 - 50 × 120 = 1440 rubles. This amount is subject to debiting: account 14 is debited, account 91.2 is credited.
3. The amount of the residual value of the reserve will be: 2040 - 1440 = 600 rubles.

On account 14, the transactions performed will be reflected as follows:

In the buh. Balance at the end of the month 50 m of the remaining material in the reserve will be reflected at market value, i.e. 62 r. Per meter, which is 3100 rubles.

Reflection in tax accounting

The reserve for the reduction of the value of material values in tax accounting as such does not exist. But writing off amounts leads to the formation of a permanent tax asset from the amount of the difference between the market value and the actual value, and the formation of the reserve - to the obligation. In this regard, the creation of a fund for the reduction of the value of goods and materials is accompanied by additional posting: Дт "Profits and losses" Кт "VAT", and write-off - Дт "VAT" Кт "Profits and losses". The amount of a tax asset or liability is calculated at an interest rate that is multiplied by the difference between market prices and production costs.

Reserves for reducing the value of goods and goods - a prudent way to wait for the depreciation of property and exit the situation with the least loss. Creation and cancellation of amounts should be strictly in accordance with the PBU and the accounting policy of the enterprise. Do not forget about the tax obligations that accompany the formation of the reserve fund.