All operations related to the manufacture of products from customer-supplied raw materials in the 1C:UPP program are reflected in the system by documents with a mandatory indication of the order for processing.
To place an order you must:
- Create a record about the seller in the "Counterparties" directory
- Create an agreement for mutual settlements for processing services
- Complete the "Buyer's Order" document
When creating an entry in the "Counterparties" directory, you should enable the "Buyer" checkbox. This will allow you to create an agreement under which mutual settlements will be carried out with the counterparty as a buyer.
Drawing up an agreement with a supplier in the 1C:UPP program has a number of features:
- The contract must be in the form of a contract “With the buyer”
- The method for detailing mutual settlements should be “According to the agreement as a whole” or “According to orders”
If in the 1C:UPP program you plan to use your own materials in addition to customer-supplied materials for the manufacture of products, then on the “Goods Accounting” tab you need to set the “Separate accounting of goods according to customer orders” flag. In this case, you can reserve your own materials for a specific processing order. Accounting for batches of customer-supplied materials and manufactured products will be maintained with details for processing orders, even if the flag is not set.
Receiving materials for processing in the 1C:UPP program is different in that the materials, when arriving at our enterprise, nevertheless remain the property of the owner - there is no transfer of ownership rights.
Therefore, materials accepted for processing in 1C:UPP are accounted for on internal registers, and in regulated accounting - on off-balance sheet accounts. The production of products is also carried out separately from regular production - it is necessary to separate the cost of production for the seller.
Therefore, production records of all operations at the processor are kept in connection with the processing order. This order is both an initiating document and acts as a cost separator.
In addition, there is a peculiarity in reflecting the use of customer-supplied materials for production. On the one hand, we must include them in the cost structure, that is, store information about which materials from the supplier have already been used and for which products. On the other hand, we cannot simply include them, like ordinary materials, in the cost - they are not ours and are not taken into account on our balance sheet. Therefore, the use of customer-supplied materials in production is reflected under cost items that differ in cost status - they are used only under items with the status “Accepted for processing”. The supplier's materials do not form the cost of our processing services, which, in fact, are the subject of the contract.
Let's look at the tolling scheme in the 1C:UPP program using an example. Individual entrepreneur Petrov turned to private entrepreneur "Entrepreneur" to create a sofa for relaxation. Petrov provided boards and furniture panels as materials. The rest of the materials were provided by "Entrepreneur". The total cost of the processing service provided is 10,000 rubles. In addition, Petrov agreed on the delivery of materials by the “Entrepreneur”. The cost of transportation was 500 rubles.
Processing order
Since the customer contacting us seeks processing services from us, we are the processing service provider and the customer is the buyer. Therefore, in the first step we draw up the Buyer’s Order document.
In the document we determine who this order is from, under what contract, we can also indicate the planned date for payment by the supplier for processing services. This date will be used in reports on customer orders and in the user’s calendar when monitoring orders.
On the “products” tab, you must indicate a list of products that will be manufactured as part of this processing order, the quantity of products, cost, discounts. The cost here is not the market value of the product, it is precisely the cost of our processing services. In our example, it will be equal to 10,000 rubles.
For products, you can specify a manufacturing specification. If, according to the selected specification, the amount of materials for manufacturing a product depends on the production parameters, then the production parameters should be indicated for the product. Release parameters are entered in a special form, which opens when you click the "Parameters" button.
The list of raw materials supplied by the supplier for processing is indicated on the “Materials” tab. The price of the material is the price at which the company is responsible to the seller for the materials accepted for processing. The cost of customer-supplied materials is not included in the cost of products made from them. If specifications are indicated for products on the “Products” tab, then the “Materials” tabular part can be filled in according to the specifications. For specifications using release parameters, filling will be carried out using the data on product release parameters specified in the document
In the order, you can specify additional services provided by the enterprise to the seller, but not directly related to processing, for example, transportation services. The list of services is indicated on the “Additional services” tab. One of the common misconceptions is that this is where processing services and their costs are indicated. An example of such services could be services for preparing additional copies of documents, delivery, insurance, and so on.
The execution of an order for the processing of customer-supplied materials in 1C:UPP is considered to be the formation of a certificate of completed processing work and occurs when the document “Sales of processing services” is carried out.
Repayment of the order and part of the receipt of materials from the supplier occurs when posting the document “Receipt of goods and services” with the type of operation “For processing”.
Using the "Analysis" button in the order form, you can generate a Processing Order Report - find out how many products were ordered and what part of the order was completed.
Using the "Orders to Suppliers" report, you can obtain information about the quantity and cost of materials that the supplier must provide as part of the processing order.
In the report "Statement of settlements with the counterparty" you can obtain the status of mutual settlements with the supplier for the forecasted debt.
Adjusting and closing an order
Correction of data on the unfulfilled part of the order is carried out using the document “Adjustment of the buyer’s order”.
A processing order can be closed forcibly, in which case all unfulfilled parts of the order will be cancelled. Closing an order for processing is carried out using the document “Closing Customer Orders”.
Reservation of own materials for processing orders.
In the manufacture of products, in addition to customer-supplied materials, the company’s own materials can be used. The cost of such materials will be included in the cost of products made from them. Materials can be reserved for processing orders. This operation is performed using the “Goods Reservation” document.
If you need to reserve materials for an order that are in warehouses in your own balance, then in the document you should select the type of operation "by warehouses", indicate the buyer's order, in the tabular part of the document "Goods" select the material that you want to reserve in the attribute "New placement" indicate the warehouse where materials are stored in free balance.
Receiving supplier materials
Receiving materials from the supplier in 1C:UPP can be done either using the document “Receipt order for goods” or without it. This depends on the organization of accounting for goods received at the warehouse from external suppliers.
If the receipt needs to be issued as a warehouse receipt order for goods, then you should issue the document “Receipt order for goods” with the transaction type “from supplier”. The document indicates the list of goods received at the warehouse and their quantity. To ensure that the materials received are not used to complete other orders, you should check the “Without the right to sell” checkbox. Next, the receipt of materials must be documented in the document “Receipt of goods and services” with the type of operation “for processing” and the type of receipt “by order”.
If the receipt of materials is simultaneously reflected in the warehouse and financial accounting of the enterprise, then it is enough to simply draw up the document “Receipt of goods and services” with the type of operation “for processing”, where you indicate the type of receipt “to the warehouse”.
The document must indicate the order for processing in the “Buyer’s order” detail. All materials received from the supplier will be automatically reserved for processing orders.
When posting a document, batches of materials received will also contain a reference to the buyer’s order, regardless of whether the principle of maintaining special records of goods for orders is specified in the processing agreement or not.
Receiving materials from the processor does not affect mutual settlements in any way. This is due to the fact that upon receipt of materials, ownership does not transfer from the seller to the enterprise.
The document has a number of features:
Mandatory indication of the order recipient (vendor)!
Account for materials received - off-balance sheet account "003.01"
Return of materials received from the seller
If some of the supplied materials remain unused in the manufacture of products or their quality turns out to be unsatisfactory, then the materials must be returned to the customer. This operation in 1C:UPP is reflected in the document “Return of goods to supplier” with the type of operation “for processing”.
The document must indicate the contracting party, the processing agreement and the order under which they were accepted.
The tabular part “Materials” indicates a list of returned materials with the prices at which they were accepted into the enterprise warehouse.
The return of customer-supplied materials can also be carried out with the issuance of consumable warehouse orders. In this case, in the “Type of sales” attribute, you need to indicate “By order”.
Returning materials to the processor does not affect mutual settlements in any way. According to accounting, the cost and quantity of materials returned from the supplier are usually written off from off-balance sheet account 003.01 “Materials in warehouse”.
Transfer of materials to production
The transfer of customer-supplied and own materials to production in 1C:UPP is carried out by the document “Requirement - invoice”.
All production costs, including materials transferred to production, are accounted for by cost items. Therefore, when writing off materials for production, indicating the cost item is mandatory.
Cost items that will be indicated when writing off customer-supplied materials for production must meet the following requirements:
* Type of costs - Material
* Status of material costs – Accepted for processing
* Nature of costs - production costs
When filling out the document “Requirement - invoice” in the tabular section “Materials” you need to indicate the list of materials transferred to production. For customer-supplied materials, the details associated with conducting a tax accounting document do not need to be filled out.
To carry out regulated accounting, it is necessary to fill out the “Business Account” - 003.01, as well as the “Cost Account” - 003.02 “Materials transferred to production”.
Since, according to the example under consideration, we need to write off not only customer-supplied materials, but also our own, it is necessary to formalize the transfer of materials to production. This can also be done using the document "Requirement - invoice". You can write off your own and customer-supplied materials in one document - Requirement-invoice, since each line sets the parameters for write-off to production. For simplicity, we will formalize this with different documents. The cost item in this document will be “Own materials”.
Production of products from customer-supplied materials
The output of products under a processing contract in 1C:UPP is reflected in the document “Production Report for a Shift”. In this document you can indicate:
- Release of products from raw materials supplied to the warehouse;
- Production of a semi-finished product from customer-supplied raw materials with transfer to another production unit (or several units) for its further refinement;
- Indicate a list of customer-supplied and own materials spent on the manufacture of products to order for processing;
- Indicate the distribution of material and other costs by position of manufactured products.
Filling out a document in the case of production of products from customer-supplied raw materials has a number of features.
The list of products or semi-finished products produced under the processing agreement is indicated in the tabular part of the “Products” document.
If the products are transferred to the warehouse, then in addition to indicating the released products on the tab, it is necessary to indicate in the “Order” details the order for processing of customer-supplied raw materials. In this case, all released products will be reserved for order upon transfer to the warehouse.
In the tabular part, you need to fill in the details “Account Account (AC)” to record the quantity and cost of products released on the accounting warehouse, the detail “Cost Account (AC)” is an account that will reflect all direct costs associated with the release of these products .
If customer-supplied materials were used for the production of any semi-finished product, then the cost of this semi-finished product is included in the item with the status “Accepted for processing”. But the semi-finished product is already included in the following products under the usual heading, with the status “Own”. For the production of products from customer-supplied raw materials, the cost account can be account 20.01 “Main production”, and the product accounting account can be account 20.02 “Production of products from customer-supplied raw materials”. In this case, if in the accounting policy settings the method for calculating the cost “by direct costs” is set, then when posting a document for the amount of all direct costs specified in this document, a posting will be generated:
Dt 20.02 "Production of products from customer-supplied raw materials"
Kt 20.01 "Main production"
If the document records the output of a semi-finished product that is not transferred to the warehouse, but is transferred to other departments for further processing, then in the document in the tabular section “Products” for such semi-finished products the direction of release is indicated “For costs” or “For costs (list)” . Account 20.01 “Basic production” should be set as an accounting cost account, and the detail “Accounting account (BU)” may be left blank.
If a semi-finished product is transferred to one division, then information about the recipient division is indicated on the "Recipients" tab, and if to several divisions, then in a special form that opens when you click on the "Recipients" button ("Products" tab).
Direct material costs are indicated in the document in the tabular section "Materials".
If the materials used were the property of the enterprise, then the cost item with which they are written off from work in progress should have the status of material costs “Own”. The cost type in the cost item should only be “Material”. The cost item on the "Materials" tab is indicated either in a separate attribute of the "Cost Items" header, or in the tabular part, depending on the value of the "Enter cost items by rows" checkbox.
The distribution of the specified materials into products occurs on the “Distribution of Materials” tab. In addition to the necessary indication of the order and the corresponding cost items, you must correctly indicate the cost account for customer-supplied materials.
Shipment of products under a processing agreement
Manufactured products can be shipped to the supplier both before and after the execution of an act for processing of customer-supplied raw materials. The operation of shipping products and issuing a certificate of completion of work is recorded in the configuration by different documents.
To ship products from the enterprise’s warehouses, it is necessary to draw up a document “Transfer of goods” with the type of operation “Transfer of products to the customer”.
All products made from customer-supplied raw materials are reserved in the warehouses of the enterprise for processing orders and the warehouse from which shipment will be made.
In the tabular part of the document you need to indicate the list of products shipped to the seller and their quantity.
The shipment operation does not affect mutual settlements with the seller and does not affect the status of the order. The order will be considered completed if the products are not just shipped, but a certificate of completion of work on processing raw materials is drawn up for it.
Sales of processing services
The document “Sales of processing services” indicates all the data for issuing a certificate of completed work on processing customer-supplied raw materials.
The header of the document must indicate the order for processing. In the “Products” tabular section, a list of products transferred to the seller is filled in, and the sales price (price of processing services) must correspond to the price specified in the processing order. If the organization provides additional services within the framework of the same order, but not related to the processing of raw materials, then such services must be indicated in the table section “Additional services”. The price for services must also correspond to the price specified in the order.
The tabular section “Materials Used” contains a list of customer-supplied materials that were used to manufacture the product.
When the document is submitted to the enterprise, the debt for the materials received is written off, orders for processing are closed for the amount of shipped products, and a debt arises from the supplier for mutual settlements for the services rendered for processing materials.
Thank you!
It is clear that not a single industrial enterprise is immune from claims from tax inspectors. At the same time, practice shows that those of them that are engaged in the processing of customer-supplied raw materials, more often than others, receive decisions on the accrual of arrears, corresponding penalties and fines. Why are inspectors so partial to these enterprises? What nuances does an accountant need to pay close attention to? What claims of tax authorities should you not agree with? Read about this and much more in this article.
General rules
Tolling materials are materials accepted by the processing organization from the customer-supplier for processing (processing), performing other work or manufacturing products without paying the cost of the accepted materials and with the obligation to fully return the processed (processed) materials, hand over completed work and manufactured products (clause 156 Guidelines for accounting for inventories, approved by Order of the Ministry of Finance of Russia dated December 28, 2001 N 119n). In accordance with the Instructions for using the Chart of Accounts, raw materials supplied by the processor are accounted for in off-balance sheet account 003 “Materials accepted for processing.” The same document stipulates that accounting for the costs of processing (refinement) of raw materials and supplies is carried out on production cost accounts. In other words, the processor does not reflect the raw materials and supplies (hereinafter referred to as raw materials) accepted from the supplier on its balance sheet (account 10 “Materials”), but takes it into account as a debit to account 003 in the assessment established in the processing agreement. At the same time, expenses for the production of products from customer-supplied raw materials are collected in the debit of account 20 “Main production”. The composition of costs included in processing services is the same as when processing one’s own raw materials, with the exception of the cost of customer-supplied raw materials and the cost of selling finished products.
Note. An agreement for the processing of raw materials supplied by customer is essentially one of the types of a contract, so the parties need to be guided by Ch. 37 Civil Code of the Russian Federation.
The contract for processing raw materials stipulates the following issues:
- name and quantity of transferred raw materials;
- name and range of finished products;
- terms of delivery of raw materials and production of products;
- the price of processing (processing) and the payment procedure (in this case, it is necessary to stipulate not only the terms of payment, but also the types of payments (money, part of the supplied raw materials, part of the manufactured products);
- the procedure for transporting raw materials and manufactured products;
- standards for consumption of raw materials, technological losses, waste generation, natural loss (usually given in appendices to the contract);
- owner of the waste, procedure for its disposal, etc.
The parties usually formalize the transfer of raw materials with an ACT, which indicates the name, quantity and its contractual value (without the allocation of VAT, since the transfer of raw materials for processing on tolling terms is not subject to taxation, therefore the supplier does not charge VAT, and the processor does not have the right to deduct.) . The raw materials received from the supplier are accepted by the storekeeper according to general rules (in terms of assortment, quantity and quality). The accompanying document in this case will be the CUSTOMER'S INVOICEBACK in form N M-15 (Approved by Resolution of the State Statistics Committee of Russia dated October 30, 1997 N 71a), as well as a consignment note, railway receipt, etc.
Attention! In order to avoid claims and disagreements, in the “Bases” column of Form N M-15, it is necessary to indicate that the raw materials are transferred on a toll basis and provide the details of the contract (number, date).
When receiving raw materials toll, as well as when accepting other materials, the storekeeper has the right to use the option of processing documents by drawing up a receipt order in form N M-4 (indicating that the raw materials were received on toll terms). This option MUST BE INCLUDED IN THE ACCOUNTING POLICY:
The guidelines for accounting for inventories also provide for a second option for processing documents - by affixing a stamp, which is equivalent to a receipt order (see paragraph 49), however, we believe that since the requirement for the stamp is the presence of details of the M-4 form, the creation of such a stamp is represented impractical, and the appearance of its imprint is difficult to perceive.
Note. The contractor (processor) is responsible for the safety of property (raw materials) received from the customer (vendor) (Article 714 of the Civil Code of the Russian Federation).
To ensure accounting for customer-supplied raw materials in the warehouse and raw materials transferred to the workshop for processing, it is recommended to open separate sub-accounts for account 003:
- "Materials and raw materials in warehouse";
- "Materials and raw materials in processing."
Finished products produced from customer-supplied raw materials, as a rule, are accepted into the warehouse of the processing enterprise and stored until they are shipped to the customer. Receipt of products to the warehouse is formalized by an invoice in form N MX-18 (Approved by Resolution of the State Statistics Committee of Russia dated 08/09/1999 N 66), and release from the warehouse is documented in an invoice in form N M-15. To account for finished products made from customer-supplied raw materials, it is recommended to use off-balance sheet account 002 “Inventory assets accepted for safekeeping.”
Clause 1 of Art. 713 of the Civil Code of the Russian Federation establishes the obligation of the contractor (processor) to submit to the owner of the raw materials (and finished products) a report on the use of the received raw materials, which must contain information about the name and quantity:
- obtained and used raw materials;
- manufactured finished products;
- generated waste.
In addition, the parties must sign an acceptance certificate for the work performed indicating the cost of processing.
The processor issues an invoice to the seller on a general basis. The cost of raw materials obtained on a toll basis is not included in the processor's tax base. In accordance with paragraph 5 of Art. 154 of the Tax Code of the Russian Federation, the tax base for the sale of services for the production of goods from customer-supplied raw materials (materials) is defined as the cost of their processing, processing or other transformation, taking into account excise taxes (for excisable goods) and without including tax. VAT is calculated using a rate of 18%, regardless of the tax rate at which sales of finished products are taxed. In this case, the “input” tax on materials, works and services used to ensure the processing process is presented by the plant for deduction according to the rules of Art. Art. 171 and 172 of the Tax Code of the Russian Federation.
For profit tax purposes, the processor's income is the cost of the work performed, as agreed in the contract. The received raw materials are not included in the taxable income of the processor. The processor's tax expenses are formed from the costs of performing work without taking into account the cost of customer-supplied raw materials. Since the contractor’s activities in processing customer-supplied raw materials are classified as performance of work, the accountant, in the generally established manner, distributes direct costs to the balances of work in progress. Indirect costs are recognized in full when they are incurred.
Let's look at the correspondence of invoices from a processor using a specific example.
Example. In March 2009, OJSC "Zavod" received raw materials worth 15,000,000 rubles on a toll basis. Its processing is estimated by the parties in the amount of 2,360,000 rubles. (including VAT - 360,000 rubles). According to the terms of the contract, the cost of transporting raw materials and finished products is borne by the supplier, while loading and unloading operations at its warehouse are carried out by the processor. The cost of these works is included in the contract price.
In accordance with the terms of the contract, the contractor received an advance payment in the amount of 590,000 rubles to his bank account in March.
Processing of this batch of raw materials began in March (raw materials worth RUB 6,000,000 were supplied to the workshop) and completed in April. The manufactured products were shipped to the customer in April. In the same month, the customer paid the processor in full.
The cost of processing for JSC "Zavod" is 1,700,000 rubles, including in March - 700,000 rubles, in April - 1,000,000 rubles.
In the accounting records of the processor, business transactions are reflected in the following entries:
Transaction content Debit Credit Amount,
rub.
March 2009
Received prepayment on tolling basis
agreement 51 62-2 590 000
VAT charged on prepayment
(RUB 590,000 / 118 x 18) 76-VAT 68 90,000
Reflects the cost of what was accepted into the warehouse for
tolling of raw materials 003-С 15,000,000
processing 003-С 6,000,000
Raw materials supplied to workshop 003-P 6,000,000 are taken into account
23, 25,
26, 69,
70, 76 700 000
(6,000,000 + 700,000) rub. 002 6 700 000
Written off consumed raw materials 003-P 6,000,000
April 2009
The raw materials transferred to the warehouse were written off from the warehouse.
processing
(15,000,000 - 6,000,000) rub. 003-С 9 000 000
Raw materials supplied to workshop 003-P 9,000,000 are taken into account
Costs related to processing are reflected
customer-supplied raw materials 20 02, 10,
23, 25,
26, 69,
70, 76 1 000 000
Finished products have been accepted into the warehouse,
made from customer-supplied raw materials
(9,000,000 + 1,000,000) rub. 002 10 000 000
Written off consumed raw materials 003-P 9,000,000
Expenses for processing raw materials were written off 90-2 20 1,700,000
Reflected revenue under toll agreement 62-1 90-1 2,360,000
VAT charged on the cost of processing 90-3 68,360,000
VAT on prepayment is accepted for deduction 68 76-VAT 90,000
Finished products were shipped to the seller
(6,700,000 + 10,000,000) rub. 002 16 700 000
The prepayment was offset 62-2 62-1 590 000
Received funds from the customer
(2,360,000 - 590,000) rub. 51 62-1 1,770,000
If there are several suppliers, the processor must maintain a statement (card) for each of them, which contains information about the raw materials received, products due, released and listed for delivery.
On the issue of separate accounting
It is not difficult to organize accounting and tax accounting in a situation where the plant itself does not produce similar products from the same type of raw materials, which are processed on a toll basis. If the types of raw materials and the range of own and customer-supplied products coincide (and this happens quite often in practice), “accounting” difficulties are inevitable.
Theorists unanimously declare that the accountant of the processing organization must ensure separate accounting of toll and non-toll raw materials, costs and finished products. Experienced accountants insist that it is unrealistic to implement such recommendations into practice. Beginners rack their brains trying to follow the separate accounting requirement. What is the problem? To answer this question, it is enough to imagine a simple situation.
The company produces welded I-beams from both its own and customer-supplied rolled metal products. The concluded contract for processing is long-term, and the schedules for supplying rolled metal and sending welded I-beams to the supplier are drawn up in such a way as to ensure rational loading of the automatic line and the release of space from finished products. Nevertheless, it often happens that the processor ships to its customers an I-beam that is actually made from raw materials supplied by customers, that is, that does not belong to the enterprise. Subsequently, the seller is sent products made from raw materials purchased by the enterprise itself.
The situation described is quite common. Moreover, some dealers are not aware of such a substitution, others were warned, but do not object to this procedure. We will not analyze the legal nuances of the relationship between the parties. For example, the supplier may file a claim against the processor for violating the deadlines for sending the customer-supplied finished product. When deciding on the possibility of liability, one should proceed from the terms of each specific agreement (assuming that the seller and the processor are satisfied with everything and neither party makes claims to the other), let’s try to figure out the accounting.
If the types of processed raw materials and manufactured products coincide, the production process can be depicted in the form of a diagram:
│ Own raw materials │ │ Provided raw materials │
│ Account 10 │ │ Account 003 │
└──────────┬──────────┘ └────────────┬─────────┘
└────────────────────┐ ┌──────────────────────┘
¥│/ ¥│/
┌──────────────────┐
│ Production │
│ Count 20 │
└──────────────────┘
/│¥ /│¥
┌──────────┴─────────┐ ┌───────────┴─────────┐
│ Own ready│ │ Customer ready│
│ products │ │ products │
│ Account 43 │ │ Account 002 │
In this case, only the cost of own raw materials is written off to the debit of account 20 (the cost of customer-supplied raw materials is not included in the costs). The credit of account 20 reflects the cost of finished products (corresponds with the debit of account 43 or 40) and processing (Debit 90-2 Credit 20).
Since our own and customer-supplied raw materials are cooked in a common boiler and processed together, the manufactured products cannot be individualized. Consequently, the distribution of manufactured products into our own and customer-supplied ones should be based on the consumption rates of raw materials.
Attention! With such an organization of accounting, at the end of some reporting periods (months), the processor may have a negative balance on account 43 (due to the sale of customer-supplied finished products to its counterparties).
In practice, another option is used for reflecting transactions in accounting accounts, when raw materials supplied to be supplied into production are written off from off-balance sheet account 003 and at the same time entered into the balance sheet by posting Debit 10 Credit 76 “Calculations under a toll agreement”. Note that the possibility of accepting customer-supplied raw materials on the balance sheet is provided, for example, in clause 6.11 of the Methodological Recommendations for Accounting for Production Costs and Calculating the Cost of Oil and Fat Products, approved. By Order of the Ministry of Agriculture of Russia dated December 14, 2004 N 537. The following is the usual correspondence:
Debit 20 Credit 10 - the cost of raw materials for production is written off;
Debit 43 Credit 20 - finished products are capitalized.
In this case, the balance sheet of the processor (according to the debit of account 43) includes all the products produced: both its own and those supplied by customers.
┌─────────────────────┐ ┌──────────────────────┐
│ Own raw materials ││ Account 10 │ │ Account 003 │
└──────────┬──────────┘ └──────────────────────┘
└────────────────────┐
¥│/
┌──────────────────┐
│ Production │
│ Count 20 │
└─────────┬────────┘
¥│/
┌──────────────────┐
│ Finished products│
│ Score 43 │
└────┬────────┬────┘
┌────────────────────┘ └──────────────────────┐
¥│/ ¥│/
┌────────────────────┐ ┌─────────────────────┐
│ Implementation │ │ Shipment to seller │
│ customers │ │ Account 76 │
│ Score 90-2 │ │ │
└────────────────────┘ └─────────────────────┘
A significant difference from the first method is that the debit of account 20 writes off the cost of not only own, but also customer-supplied raw materials.
Accordingly, there is a need to evaluate the latter. We believe that in this case there is no point in reinventing the wheel. Therefore, the cost of customer-supplied raw materials taken onto the balance sheet and written off as the cost of production should be taken as its average price. To calculate it, you can use the formula:
Tsr=C/V
where C is the cost of customer-supplied raw materials processed in the current month, in rubles;
V - volume of customer-supplied raw materials, incl.
In turn, each of these indicators is determined by the formulas:
C = Snach + Post
where Snach is the cost of the balance of customer-supplied raw materials at the beginning of the month according to
prices of the previous period;
Spost - the cost of raw materials received on customer basis in the current month.
A similar formula is used to calculate the indicator “volume of customer-supplied raw materials”:
V = Vstart + Vstop
where Vbeg is the volume of the balance of customer-supplied raw materials at the beginning;
Vpost is the volume of customer-supplied raw materials received in the current month.
Note that these formulas can be used regardless of the number of givers.
Sales of own finished products are reflected in the generally established order. When shipping products to the supplier, a posting is made: Debit 76 “Calculations under the toll agreement” Credit 43 - for the estimated cost of the toll raw materials. As a result of the last entry in the debit of account 43, a certain amount remains, representing the difference between the cost of finished products produced and the estimated cost of raw materials supplied by customers. This amount is equal to the cost of processing customer-supplied raw materials. Therefore, when reflecting the sale of services provided to the supplier for the processing of raw materials (Debit 62 Credit 90-1, Debit 90-3 Credit 68), the said difference is closed by posting Debit 90-2 Credit 43.
Thus, on account 76, records are formed for settlements with the supplier for raw materials, on account 62 - for settlements with the supplier for processing services. The VAT tax base is in full compliance with the norms of Chapter. 21 of the Tax Code of the Russian Federation includes the sale of its own finished products and processing services (the cost of customer-supplied raw materials is not taken into account when calculating VAT).
According to practicing accountants, this method has the following advantages. Firstly, the status of all settlements with the dealer can be tracked using balance sheet data. Secondly, there is no need to divide the produced impersonal finished products into your own and customer-supplied ones (such division is carried out upon shipment). Thirdly, there is no negative balance on the active account 43. The disadvantage of this option is that it is not provided for by accounting legislation.
So, we looked at two fundamentally different options for accounting in a situation where they coincide:
- types of raw materials purchased by the plant and raw materials supplied on toll terms;
- assortment of own and customer-supplied finished products.
Both methods have their pros and cons. Next, we will analyze what negative consequences a processor can expect in this or that case. In any scheme, he may be accused of incorrectly reflecting business transactions in accounting accounts and reporting. This fact is qualified by Art. 120 of the Tax Code of the Russian Federation as a gross violation of the rules for accounting for income and expenses, which is fraught with a fine for the plant in the amount of 5 thousand to 15 thousand rubles. In this case, the accountant himself may face a fine in the amount of 2 thousand to 3 thousand rubles. for distortion of any article (line) of the financial reporting form by at least 10% (Article 15.11 of the Code of Administrative Offenses of the Russian Federation).
Are there tax consequences possible?
As practice shows, tax inspectors can find grounds for accruing arrears of income tax and VAT under any accounting scheme. Having identified the facts of shipment of finished products to the supplier from account 43 (in the first option, this happens when the customer's products are replaced with their own), inspectors will clearly recognize such an operation as a sale and, as a result, will charge additional taxes to the processor.
Is it possible to reverse the decision of the Federal Tax Service? Yes, if the processor acted according to one of the above schemes and did not violate tax laws. To confirm this, we cite, for example, Determination of the Supreme Arbitration Court of the Russian Federation dated December 10, 2008 N 13297/08: the basis for additional assessment of income tax and VAT on operations related to the production of nickel and cobalt under contracts for the processing of customer-supplied raw materials was the inspection’s conclusion that the processor Without concluding loan agreements (commodity credit) with suppliers, in a number of periods he allowed the use (borrowing) of customer-supplied raw materials to manufacture products for himself, which he shipped under supply agreements, reimbursing the debt for raw materials to the vendors that arose as a result of such actions with products made from his own raw materials.
Considering this episode and recognizing the decision of the inspectorate in this part as invalid, the courts found that, according to the terms of the technological process, the processing of both customer-supplied and own raw materials is carried out jointly, therefore the finished product cannot be individualized and divided into products made from customer-supplied raw materials and raw materials purchased processor. For this reason, according to the accounting policy of the enterprise, in accounting the entire volume of finished products is taken into account as products of its own production, but analytical accounting is carried out separately for each supplying enterprise. At the same time, the cost of own materials used in the manufacture of products transferred under agreements for the processing of customer-supplied raw materials was not included in expenses for the purpose of calculating income tax, and when selling products made from borrowed raw materials, the VAT tax base was not reduced. The revenue received by the enterprise from the sale of services for the processing of customer-supplied raw materials is reflected in accounting and taken into account for tax purposes in full, as well as revenue from the sale of its own products.
Under such circumstances, the courts of three instances came to the conclusion that the processor was unlawfully charged additional income tax and VAT, since the described actions did not entail negative tax consequences. In turn, the Supreme Arbitration Court of the Russian Federation refused to review the inspection of these judicial acts in the manner of supervision.
In a similar situation, the arbitrators of the FAS UO, in Resolution dated 06/03/2008 N F09-3857/08-S3, canceling the inspection’s decision, indicated: the inspection did not provide evidence that the processor’s accounting does not comply with the requirements of the law. The tax authority's arguments about the taxpayer's lack of separate accounting records are refuted by primary accounting documents and analytical accounting data. Agreements for the processing of customer-supplied raw materials were indeed executed by the taxpayer improperly, since there were cases when he disposed of products made from customer-supplied raw materials as his own property, that is, he sold them to his counterparties. These actions led to the formation of debt to the suppliers for the shipment of finished products. To repay the said debt, the processor shipped finished products made from its own raw materials. The accounting records of the enterprise reflected the amount of debt to the owners of customer-supplied raw materials and the valuation of products at the cost of production of their own products, which does not contradict the provisions of the legislation on accounting. The inspectorate's requirements for the need to confirm the taxpayer's debt to customers with primary documents confirming the conclusion of trade credit agreements are not based on the norms of the current legislation. We would like to add that the Federal Tax Service was unable to obtain a review of this case (see Determination of the Supreme Arbitration Court of the Russian Federation dated September 29, 2008 N 12421/08).
Attention! The current tax legislation does not provide for separate tax accounting of costs for processing own and customer-supplied raw materials (Definition of the Supreme Arbitration Court of the Russian Federation dated March 20, 2008 N 3217/08).
Other grounds for tax claims
As a rule, inspectors assess additional taxes (VAT and income tax) to processors for two more reasons:
- exclusion of some costs from tax expenses;
- underestimation of the cost of processing, discrepancy between the contract price and the level of market prices.
Let's start with the first reason. Let us illustrate it using the example of Resolution of the Federal Antimonopoly Service dated January 29, 2008 N A36-1141/2007. The subject of the disputed agreement was the production of cement from raw materials supplied by customers. Tax officials excluded from the expenses taken into account when determining taxable profit the processor’s costs for delivering raw materials from the quarry, raw material additives from the destination railway station and finished products to the customer’s warehouse. The inspection assessed these costs as economically unjustified, since they are not related to the production and implementation by the enterprise of work on processing customer-supplied raw materials.
Having disagreed with the decision of the Federal Tax Service, the taxpayer appealed to the arbitration court. The arbitrators proceeded from the fact that, since the legislator has not established criteria for assessing the economic justification of costs, each taxpayer’s costs should be assessed individually for the possibility of accepting them for tax purposes, based on the specific conditions of his financial and economic activities, including taking into account the presence of a connection between the expenses associated with the economic activities of a legal entity. According to the terms of the agreement, cement production is carried out from the customer’s raw materials and raw material additives. In this case, the agreement stipulates that:
- transfer of raw materials from the quarry is carried out free on board the quarry (warehouse);
- raw material additives are delivered by the customer by rail to the destination station with the subsequent assignment of the responsibilities of the consignee to the processor;
- the processor delivers the manufactured products to the customer’s warehouse, where they are accepted.
The court indicated that the parties acted in accordance with the terms of the concluded agreement, which was not disputed by the tax authority itself. The court also took into account that from the description of the technological process it follows that the delivery of raw materials, raw material additives and shipment of finished products are included in the production cycle. According to the production flow chart, the cement production process begins with the society receiving raw materials from the quarry. Subsequently, these raw materials are used to produce cement. Thus, work on the production of cement consists not only of its production itself, but also of providing production with materials (raw materials, raw material additives), as well as delivering the result of processing to the customer, and therefore the costs incurred by the company for their delivery are of a production nature.
Since the inspection did not provide evidence that the price of the cement production service did not include compensation for all the costs of the processor or was underestimated in relation to the market price, the judges canceled the decision to accrue arrears of income tax, penalties and fines. Let us note that the Supreme Arbitration Court of the Russian Federation refused to review the case by the inspectorate (Determination No. 5255/08 dated April 29, 2008).
Next, let's move on to the second basis for additional charges - understatement of the contract price, including unprofitability of processing. In this case, tax authorities also often lose in the courts (See, for example, Resolutions of the FAS PA dated January 10, 2008 N A12-8941/07, FAS MO dated September 1, 2008 N KA-A40/7739-08-P, FAS UO dated January 17 .2008 N Ф09-11171/07-С2 (taking into account the Determination of the Supreme Arbitration Court of the Russian Federation dated 04/25/2008 N 5340/08), etc.), since they cannot prove, firstly, the legality of the application of Art. 40 of the Tax Code of the Russian Federation (including the interdependence of the supplier and the processor) and, secondly, the discrepancy between the contract price and the level of the price calculated by them, used to calculate the arrears.
It is believed that, in general, the payment by the supplier for services for processing raw materials should cover the costs of the plant for processing a given volume of raw materials and provide the enterprise with a profit comparable to that which can be obtained by producing products from its own raw materials. However, during certain periods of economic activity or under individual contracts, this rule may not be observed. For example, in clause 1.10 of the Instructions for planning, accounting and calculating the cost of products at oil refining and petrochemical enterprises (Approved by Order of the Ministry of Fuel and Energy of Russia dated November 17, 1998 N 371) it is noted that the profitability of providing services for processing customer-supplied oil is determined on a contractual basis between the oil refinery and oil company. This should take into account:
a) market conditions and price conditions for petroleum products in the area where oil refineries are located, as well as in other regions;
b) seasonal fluctuations in demand for certain types of petroleum products: an increase in demand for winter diesel fuel and boiler fuel (fuel oil) in winter and for motor gasoline, jet fuel and petroleum bitumen in summer;
c) the general strategy of the oil company in a given period in terms of the concentration of financial resources and their subsequent most effective distribution between the economic entities of the company.
Similar factors influence the price of a contract with a supplier in other industries. Therefore, even the presence of a loss from the provision of services to the supplier is not yet a basis for accruing tax arrears and accusing the processor of seeking to obtain an unjustified tax benefit. This position is confirmed in judicial practice. Let us turn, for example, to the Resolution of the Federal Antimonopoly Service ZSO dated October 22, 2007 N F04-7472/2007(39550-A46-26): the tax authority indicated that when working under a processing agreement (tire products were produced from customer-supplied raw materials), the processor received a loss, since when agreeing on prices it was already known that they were lower than the cost of services for processing customer-supplied raw materials. The taxpayer stated in his defense that:
- in general, for the year a profit was received from the processing of customer-supplied raw materials;
- the price reduction for services provided to dealers was carried out in certain months in order to ensure the stability of the relationship between the parties and is associated with seasonal factors of a decline in tire sales volumes.
The arbitrators took into account that the inspection did not provide evidence of the discrepancy between the prices used by the parties and the level of market prices, and protected the enterprise from unfounded claims. In turn, the Supreme Arbitration Court of the Russian Federation refused to review this case to the inspectorate (Determination No. 1816/08 dated February 14, 2008).
On the issue of property received free of charge
When conducting an inspection of a processing enterprise, inspectors often state that they have received property from the supplier free of charge. As a consequence, an increase in the tax base for income tax by the amount of non-operating income generated (clause 8 of Article 250 of the Tax Code of the Russian Federation). What property are we talking about?
Waste generated during the processing of customer-supplied raw materials can be considered received free of charge. It is precisely “may be”, since the solution to this issue depends on the terms of the contract. If it says that the waste must be returned to the supplier, then the processor’s failure to provide waste delivery and acceptance certificates will allow inspectors to claim that the income tax base is underestimated, since the waste remained at the disposal of the processor. If the contract establishes that the waste remains the property of the recycler, then non-operating income in the form of property received free of charge arises only if the price of processing services is not reduced by the cost of the waste.
Obviously, the above is true only for those wastes that are suitable for further use (in production, for sale), that is, they are not irrecoverable. In accounting, the cost of returnable waste received free of charge by the recycler is reflected in the entry Debit 10 Credit 98 “Deferred income”. After writing off waste, for example, two entries will need to be made simultaneously into production: Debit 20 Credit 10 and Debit 98 Credit 91-1.
Of course, inspectors need to make a lot of effort to prove in court not only the validity of additional income tax charges to the recycler (that is, the very fact of the existence of non-operating income in the form of waste), but also the amount of income not taken into account by the accountant. Tax authorities will need to assess the legality of using the norms of technological losses and waste generation agreed upon by the parties, determine the amount of irrecoverable and returnable waste, calculate the cost of the latter, and prove that it is not included in the taxable income of the recycler. As follows, for example, from the Resolution of the Federal Antimonopoly Service NWZ dated August 27, 2008 N A42-2095/04, this task is not an easy one.
In addition, when solving the problem of the availability of non-operating income, the specifics of the production process are of great importance. Thus, the arbitrators of the FAS UO in the Resolution of July 1, 2008 N F09-4583/08-C2 analyzed the following situation. In accordance with tolling agreements, the plant processed hydrocarbon raw materials, as a result of which it produced products in the range and quantity agreed with the customer. Inspectors found that part of the raw materials supplied by the customer was used for the production of marketable products, and the other (minus the established losses) was isolated in the form of flammable components of petroleum products and used as fuel in the process of production of marketable products. The tax authorities decided that since the processor does not pay the cost of this fuel to the seller, the plant has non-operating income.
The court did not agree with the opinion of the Federal Tax Service, pointing out that such use of raw materials is due to the peculiarities of the technological process. According to the Instructions for Planning, Accounting and Calculating Product Costs at Oil Refineries and Petrochemical Enterprises, the cost of this fuel is not included in the cost of refining services and, accordingly, is not presented for payment in the price of work. Thus, since the burden of expenses under the processing agreement must be borne by the customer and the cost of fuel is not included in the price of processing, the court concluded that the processor does not have non-operating income. The above court decision proves that only knowledge of all the nuances (not only accounting and taxation, but also processing technology) will allow the taxpayer to prove the groundlessness of the inspectors’ claims.
With processing based on materials from "Industry: accounting and taxation." Magazine expert T.K. Yulina
I received the knowledge necessary to write this article by independently completing a training course at the SAP electronic academy “Supply Chain Management - Procurement” (TSCM52 – Procurement II ). This knowledge helped me quickly become familiar with two toll processing solutions, facilitate their implementation, and provide effective user training.
This article describes the use of a standard scheme for reflecting tolling operations at Davalets, the Customer of processing services.
Key Concepts
Tollingmaterials- these are materials accepted by the organization from the customer for processing (processing), performing other work or manufacturing products without paying the cost of the accepted materials and with the obligation to fully return the processed (processed) materials, delivery of completed work and manufactured products. (Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 N 119n)
Scheme of tolling operations
Rice. 1 Tolling scheme in procurement (subcontracting)
Explanation of the process:
- The company (Davalets) orders finished products according to the toll scheme; the ordered item contains information about the components provided to the Contractor.
- In warehouse accounting (Davaltsa), the transfer is posted to the “contractor's inventory”.
- The contractor performs the work and ships the finished product. When finished products arrive at the warehouse, Davalets’ accounting reflects the receipt of finished products, and the components previously transferred to the Contractor are written off from the “contractor’s inventory.”The quantity of written off components can be adjusted using the "Subsequent recalculation" operation.
- The contractor issues an invoice for the work/services performed.
Now let's look at what the standard implementation of the described scheme looks like in SAP ERP.
Standard implementation of tolling scheme in SAP ERP
Reflection of tolling operations in SAP ERP is carried out in 5 steps:
- Data preparation (creation of info records, specifications);
- Create a purchase order;
- Issue of materials to the Contractor (posting the transfer of material to stock O - “supplier stock”);
- Reflection of the receipt of finished products (with simultaneous write-off of components). If necessary, the "Subsequent recalculation" operation is performed;
- Executing the operation “Control of invoices for a purchase order.”
1. Data preparation
1.1. Maintaining a material info record with the type "Processing of customer-supplied material"
Material info records are maintained using transactions ME11/ME12/ME13.
Rice. 2 Path to maintaining a material info record
To use an info record in tolling operations, you must select the Infotype “Processing tolling material”, and also, as for a regular info record, specify the supplier, material, plant and purchasing organization (see. Fig.3).
Rice. 3 Initial screen for maintaining a material info record with the "Processing of customer-provided material" infotype
An info record contains the conditions, dates, contacts and other information under which a specific supplier provides a specific material. In my case on Fig.3 material info record presented 901 A100 by supplier T-K500E30.
On Fig.4 shown Total information info records: contacts, conversion of units of measurement, reminder dates.
Rice. 4 Info record screen "General data"
On the screen " Purchasing organization data "contains information about planned delivery times, purchasing group, permissible deviations, price and other information. This information is copied into the purchase order when an order is created for the specified supplier for the specified purchasing organization (in my case, zak.org = 1000).
The planned delivery date influences the calculation of the requirement date. Screen shown in Fig.5.
It must be borne in mind that the system cannot create two info records for the same supplier and for the same material, however, the conditions of the info record can be differentiated in time. This is done by entering a new time period under the "Conditions" button ( Fig.5 And 6 ).
Rice. 5 Info record screen "Purchasing organization data"
Rice. 6 Select to view info record condition data by time period with the option to add a new time period
1.2. Maintaining specifications of materials - finished products
A material specification contains information about the components that are needed to produce a specific material—the finished product. In the case of a tolling scheme, these components, specified in the material specification - finished goods, will be handed over to the contractor and, ultimately, decommissioned from the warehouse; and the material - finished products will be posted to the warehouse.
Specification maintenance is carried out using transactions CS01/CS02/CS03.
Rice. 7 Path to Maintain a Material BOM
On the initial screen, you must specify the material (finished product), plant and use of the specification (for the toll scheme, you can specify 1 (production) or 3 (universal)).
In the specification, we indicate the list of components and the quantity that is necessary to produce the basic amount of material - the finished product.
We indicate the list of components and quantities on the general overview screen of items ( Rice. 8); and the base quantity on the title screen ( Rice. 9).
You can access the header screen from the item overview screen by pressing the button.
Rice. 8 Item Overview Screen in a Material BOM
Rice. 9 Specifying a Basic Material Quantity on the BOM Header Screen
Thus, in my case for 10 pcs. material 901A100 need to use 25 pcs. material 1418 , 35pcs. material 1419 , and 10 pcs. material 1420 .
To save the specification, click the "Save" button at the top of the screen.
1.3. Production calendar
To correctly use the scheme for processing customer-supplied materials (and material movements in general) throughout the plant, it is necessary to indicate the correct validity periods of the production calendar and assign the required production calendar to the plant.
Setting up production calendar dates is done in the transaction SCAL; path: SPRO-> SAP NetWeaver->General Settings->Calendar Maintenance.
In a number of industries, the tolling scheme is very often used. This article will allow us to determine the features of using the tolling scheme from an economic and legal point of view and will allow us to maintain accounting records according to the tolling scheme, taking into account the requirements of the legislation of the Russian Federation.
What is a tolling scheme?
According to the Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 No. 119n “On approval of the Guidelines for accounting of inventories” (with amendments and additions) “Customer materials are materials accepted by the organization from the customer for processing (processing), performing other work or production of products without payment for the cost of accepted materials and with the obligation to fully return processed (processed) materials, delivery of completed work and manufactured products.”
The essence of toll processing is as follows: the entrepreneur does not have production capacity, but at the same time he purchases raw materials and transfers them to a third party for processing in order to obtain finished products.
This type of cooperation is used mainly in:
- oil refining industry;
- grain processing industry;
- light industry;
- food industry, etc.
It is important to note that both raw materials, finished products, and waste resulting from processing raw materials are the property of the customer.
The contractor only provides the service of processing raw materials, for which he receives a reward from the customer.
Differences between tolling and purchasing of goods
Manufacturing products using a tolling scheme has a number of differences from purchasing finished goods from the manufacturer:
| Distinctive features | A comment |
| Product | Thanks to the production of products according to the customer-delivery scheme, the customer has a number of advantages:
|
| Raw materials | Independent purchase of raw materials allows you to regulate the cost of manufactured products. |
| Taxes | The tax scheme is calculated based on the initial data not “resale of purchased goods”, but “sale of own products”. |
Accounting under tolling scheme
When using the tolling scheme in accounting, the customer and contractor have some features:
Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 No. 119n defines the rules for accounting for raw materials and components under the terms of a toll agreement:
| Customer | Executor |
| An organization that has transferred its materials to another organization for processing (processing, performing work, manufacturing products) as toll, does not write off the cost of such materials from the balance sheet, but continues to record it in the account of the relevant materials (in a separate sub-account) (Article 157) In this case, the fact of transfer of raw materials to the contractor is not reflected in tax accounting, and the cost of services for processing raw materials is included in material costs (in the case of OSNO - on the day the contractor signs the report, in the case of the simplified tax system - after payment for the contractor’s work). | Customer-supplied materials are accounted for in the off-balance sheet account “Materials Accepted for Processing” (Article 156). Finished products are also recorded in an off-balance sheet account. The fact of receipt of raw materials from the customer and finished products are not reflected in tax accounting. |
Accounting entries for tolling scheme
| Debit (Dt) | Credit (Kt) | A comment |
| 10.7 | 10.1 | Transfer of customer-supplied raw materials to the contractor |
| 10.1 | 10.7 | Receipt of processed materials |
| 10.1 | 60 | Cost of work on processing customer-supplied raw materials |
| 19 | 60 | Accounting for VAT on the cost of services for processing raw materials supplied by customers |
| 68 | 19 | VAT is accepted for deduction |
| 20 | 10.1 | Recycled materials are sent to production |
| 43 | 20 | Accounting for finished products made from customer-supplied raw materials |
| 60 | 51 | Payment for work on processing customer-supplied raw materials to the contractor |
| Receipt of products recognized as semi-finished products: | ||
| 21 (10.2) | 10.7 | Write-off of customer-supplied raw materials required for the production of semi-finished products |
| 21 (10.2) | 60 | Write-off of the cost of the contractor's work |
| 19 | 60 | Accounting for VAT on processing |
From the contractor’s side, the accounting entry looks like this:
| Debit (Dt) | Credit (Kt) | A comment |
| 003 | Acceptance of customer-supplied raw materials and transfer them for processing | |
| 20 | 02 (10, 23, 25, 26, 60, 69, 70) | Accounting for costs incurred by the contractor when processing customer-supplied raw materials |
| 003 | Finished products were handed over to the customer | |
| 62 | 90.1 | Revenue from work on processing customer-supplied raw materials |
| 90.3 | 68 | Accrual of VAT on the cost of work on processing customer-supplied raw materials |
| 90.2 | 20 | Write-off of the cost of processing customer-supplied raw materials |
| 51 | 62 | Payment from the customer |
How to properly draw up a contract with a tolling scheme?
When transferring raw materials to the contractor, it is important to note that this transfer is not a sale, which must be reflected when preparing documents.
A contract for toll processing of raw materials is a type of contract. In this case, it is necessary to pay special attention to ensure that the agreement for toll processing of raw materials clearly separates it from the agreement for the supply of goods or the purchase and sale agreement, because The contract for toll processing must necessarily contain the conditions for the transfer of raw materials, components, and materials.
| Features of the agreement | A comment |
| Characteristics of finished products | It is necessary to indicate in detail the characteristics of the finished product |
| The contract for toll processing of raw materials must reflect the very essence of the process being performed. | One party (contractor) undertakes to perform certain work on the instructions of the other party (customer) and deliver its result to the customer, and the customer undertakes to accept the result of the work and pay for it (Article 702 of the Civil Code of the Russian Federation). |
| Recycling criteria | The contract should indicate the parameters for processing raw materials (referring to regulatory documents (TU, GOST, etc.): raw material consumption standards, waste standards. |
| Transfer of raw materials, components, goods | If the subject of the agreement is the transfer of goods (even those produced using the customer’s raw materials), such an agreement will be considered not as an agreement for toll processing of raw materials, but as a supply agreement or a purchase and sale agreement. |
| Volume of supplied raw materials | According to the UN Convention on Contracts for the International Sale of Goods (Vienna, April 11, 1980) Contracts for the supply of goods to be manufactured or produced are considered contracts of sale unless the party ordering the goods undertakes to supply a substantial portion of the materials required for the manufacture or production of such goods.* The delivery time for raw materials is indicated (especially if the order is quite large). |
| Volume of goods transferred | The timing and volumes of products produced are indicated. |
| Product storage conditions | If the cost of storing manufactured products is not specified in the contract, it is considered a service provided free of charge, which entails recognition of the object of VAT taxation and determination of the tax base (Article 40 of the Tax Code of the Russian Federation). For the supplier of raw materials, this service will be considered as non-operating income for profit tax purposes, assessed in accordance with Art. 40 of the Tax Code of the Russian Federation, but not lower than the costs of providing these services (Article 250 of the Tax Code of the Russian Federation). |
| Transfer of manufactured products | The agreement reflects the mechanism for exporting finished products. |
| Waste | By agreement of the parties, returnable waste can remain with the manufacturer or be transferred to the customer. Disposal of irretrievable waste is carried out by the manufacturer, but at the expense of the customer. |
| Processor reports | It is advisable to specify in the contract the frequency and content of reports from the raw material processor (frequency is usually once a month). The report states: · amount of raw materials consumed, remaining raw materials; · overconsumption of raw materials (indicating the reasons); · information about manufactured products; · information about shipped products; · information about the remaining products. |
| Payment order | Payment can be made as follows: · in cash; · transfer of a certain part of the finished product; · transfer of returnable waste. |
| Penalties and surcharges | The contract may provide for penalties or additional payments:
|
| Return of remaining raw materials | The contract must necessarily provide for the possibility of returning raw materials to the customer for a number of reasons:
|
* When transferring raw materials, it is important to understand the essence of the “substantial part of the materials”. If the production of goods requires basic raw materials and auxiliary materials, then the contract for toll processing of raw materials must indicate the transfer of the main raw materials.
When may an agreement not be a toll processing agreement (example)?
LLC "ABV" transfers sewing accessories to LLC "GDE" along with fabric for the production of clothing. In this case, this agreement can be considered an agreement for toll processing of raw materials, but on the condition that the quantity of accessories strictly corresponds to the ordered quantity of products.
If ABV LLC transfers sewing accessories without fabric to GDE LLC, the agreement cannot be considered as a toll agreement. Such a transaction will be recognized as a transaction based on a supply agreement or a purchase and sale agreement.
How to formalize transactions with the unused balance of the tolling scheme?
There are often cases when there are leftover raw materials or returnable waste, which also need to be reflected in accounting.
From the customer's side, the accounting entry looks like this:
| Debit (Dt) | Credit (Kt) |
Customer-supplied material and production inventories In accounting, inventories accepted by the organization from the customer are recognized (clause 156 of the Guidelines for accounting of inventories, approved by Order of the Ministry of Finance of Russia dated December 28, 2001 N 119n, hereinafter - Guidelines for):
- without paying their cost for processing (processing), performing other work or manufacturing products;
- with the obligation to fully return processed (processed) materials or manufactured products and hand over completed work.
Based on this, the parties to the transaction with supplied materials are: the customer - the owner of the materials (donor) and the contractor - their processor.
Note. Operations with materials and products are widely used in manufacturing and trade. Working according to a tolling scheme allows a business entity to obtain the necessary products without having its own production capacity for processing it.
In general an agreement for the processing of toll materials is a type of contract(Chapter 37 of the Civil Code of the Russian Federation). The contractor (processor) by virtue of Art. 702 of the Civil Code of the Russian Federation is obliged to perform certain work on the instructions of the customer (vendor) and hand over the result to the customer, who undertakes to accept the result of the work and pay for it.
This takes into account the specifics of acquiring ownership during processing. According to the Civil Code of the Russian Federation, the right of ownership to a new movable thing manufactured by a person by processing materials that do not belong to him is acquired by the owner of the materials (paragraph 1, clause 1, article 220 of the Civil Code of the Russian Federation). That is, the seller retains the right of ownership to the products produced by the processor.
But something else happens. If the cost of processing significantly exceeds the cost of materials, then the ownership of the new item is acquired by a person who, acting in good faith, carried out the processing for himself (paragraph 2, paragraph 1, article 220 of the Civil Code of the Russian Federation).
In this case, organizations acquiring property rights must compensate the opposite party for:
- in the first case - the cost of processing;
- in the second - the cost of materials transferred by the seller (clause 2 of Article 220 of the Civil Code of the Russian Federation).
The generally established principles of risk distribution between the parties to the contract for the processing of customer-supplied materials are as follows. The risk of accidental loss or accidental damage to materials transferred for processing is borne by the party that provided them, that is, the supplier. The risk of accidental death or accidental damage to already manufactured products is borne by the contractor, that is, the processor (Clause 1, Article 705 of the Civil Code of the Russian Federation). However, when concluding a contract, the parties can determine special rules for the distribution of risks.
The processor is responsible for the safety of materials provided by the customer that are transferred for processing (Article 714 of the Civil Code of the Russian Federation). If, as a result of dishonest actions of the processor, the supplier has lost the materials transferred for processing, then he has the right to demand the transfer of finished products into his ownership and compensation for losses caused (clause 3 of Article 220 of the Civil Code of the Russian Federation).
The price in the contract includes compensation for the contractor’s costs and the remuneration due to him (clause 2 of Article 709 of the Civil Code of the Russian Federation).
When processing raw materials, materials, and finished products, waste and sometimes by-products often arise. These values belong to the seller. And they, as a rule, are returned to him, although the contract may provide otherwise.
Thus, it is advisable to provide in the processing contract:
- specific type of work performed by the processor (clause 1 of Article 702 of the Civil Code of the Russian Federation);
- the exact name and description of the transferred customer-supplied materials, including data on their quantity, quality and cost;
- name, assortment (technical characteristics) of finished products (goods) manufactured as a result of processing;
- the procedure for the transfer of customer-supplied raw materials and materials to the contractor and the acceptance of the processed assortment by the customer;
- initial and final deadlines for the completion of work (clause 1 of Article 708 of the Civil Code of the Russian Federation);
- deadlines for delivery of customer-supplied inventories and manufacturing of products (goods), liability for their violation (Article 708 of the Civil Code of the Russian Federation);
- the price of services for processing customer-supplied materials (for the manufacture of products);
- payment procedure (payment terms, types of payments - in cash, part of supplied raw materials, part of manufactured products);
- actions with returnable waste (by-products, if any) (transferring them to the customer or not returning them to the supplier on a paid or free basis).
Note. The Contractor is obliged to use materials provided by the customer economically and prudently. After completing the work, he must provide the customer with a report on the consumption of the material, as well as return the remainder. Unused materials, with the consent of the customer, can be left with the contractor to reduce the price of the work (Clause 1, Article 713 of the Civil Code of the Russian Federation).
Accounting
- from the dealer
An organization that has transferred its materials to another organization for processing (processing, performing work, manufacturing products) as toll, does not write off the cost of such materials from the balance sheet, but continues to take them into account in the account of the relevant materials (in a separate sub-account) (clause 157 of the Guidelines for inventory accounting). Instructions for using the Chart of Accounts for accounting financial and economic activities of organizations (approved by Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n) for accounting for such materials prescribe the use of subaccount 7 “Materials transferred for processing to third parties” of account 10 “Materials”. Based on this, when transferring materials to a processor, internal accounting entries are made to the specified account 10:
Debit 10-7 Credit 10-1
- customer-supplied materials were transferred for processing at book value.
The assessment of supplied customer-supplied materials is a combination of their actual cost and the costs of delivering them to the place of processing.
The operation of transferring customer-supplied materials is drawn up with an invoice for the release of materials to the third party (form N M-15, approved by Resolution of the State Statistics Committee of Russia dated October 30, 1997 N 71a). It makes a note “For processing on a toll basis” and indicates the details of the contract. The first copy of this invoice remains at the supplier's warehouse as the basis for the release of materials, and the second is transferred to the processor's representative.
If materials are transferred only for the purpose of their modification, then the costs of its completion are taken into account in their actual cost (clause 6 of the Accounting Regulations “Accounting for inventories” PBU 5/01, approved by Order of the Ministry of Finance of Russia dated 06/09/2001 N 44n ). In this case, the following entries are made in accounting when returning modified materials:
Debit 10-1 Credit 10-7
- the accounting value of materials transferred for revision is written off;
Debit 10-1 Credit 60
- reflects the cost of services for finalizing materials.
When customer-supplied materials are transferred for the manufacture of finished products, the costs of their processing and their accounting value form the cost of production. The cost of finished products from the supplier may include the cost of raw materials and processing services, transportation costs, the share of general production and general business expenses attributable to finished products, payment for intermediary services, travel expenses, etc.
Note. The invoice indicates not only the quantity, but also the cost of the transferred toll goods. After all, the processor, as mentioned above, is responsible for the loss or damage of the valuables provided by the seller.
It is advisable to reflect all expenses associated with such processing on a separate subaccount of account 20, for example, on the subaccount “Processing on toll terms”. Receipt of finished products is reflected in account 43 “Finished products”.
Example 1.
The organization purchased fabric for sewing men's suits, the cost of which was 283,200 rubles, including VAT - 43,200 rubles. Their tailoring was carried out by a contractor, to whom 241,900 rubles were transferred for these services, including VAT - 36,900 rubles.
These transactions are reflected in accounting as follows.
When transferring fabric:
Debit 10-1 Credit 60
- 240,000 rub. - fabric is capitalized;
Debit 19 Credit 60
- 43,200 rub. - VAT presented by the fabric supplier is allocated;
- 43,300 rub. - accepted for VAT deduction;
Debit 60 Credit 51
- 283,200 rub. - funds were transferred to the fabric supplier;
Debit 10-7 Credit 10-1
- 240,000 rub. - the fabric was donated for sewing suits.
When returning suits:
Debit 20, subaccount "Processing on tolling terms", Credit 10-7
- 240,000 rub. - the book value of the fabric is reflected;
Debit 20, subaccount "Processing on tolling terms", Credit 60
- 205,000 rub. - debt for sewing suits is reflected;
Debit 19 Credit 60
- 36,900 rub. - VAT charged for tailoring suits has been allocated;
Debit 68, subaccount "VAT calculations", Credit 19
- 36,900 rub. - accepted for VAT deduction;
Debit 60 Credit 51
- 241,900 rub. - funds were transferred for sewing suits;
Debit 43 Credit 20, subaccount "Processing on toll-to-pay basis",
- 445,000 rub. (240,000 + 205,000) - men's suits are accepted for accounting in the form of finished products.
When processing raw materials, materials, and finished products, as mentioned above, waste often arises. Depending on their consumer qualities, they can be irrevocable (final) and returnable (used and unused). Irrevocable waste must be disposed of, and returnable waste can be used in the economic activities of the organization.
Returnable waste is valued at the price of possible use or at the selling price (clause 111 of the Guidelines). As a rule, they are returned to the supplier, who reduces the cost of the customer-supplied raw materials transferred for processing by the estimated cost of returnable waste:
Debit 10-6 "Other materials" Credit 10-7
- the cost of return materials is taken into account.
If returnable waste remains with the processor, then the supplier must reflect its sale in the accounting records:
Debit 76 Credit 91-1
- the processor’s debt for returnable waste is reflected;
Debit 91-2 Credit 10-7
- the cost of returnable waste is written off;
Debit 91-2 Credit 68, subaccount “VAT calculations”,
- the amount of VAT on sales has been accrued.
If their cost is taken into account as payment for processing services, then in this case the amount of the transferred amount of funds is reduced. In this case, the following entry is made in accounting:
Debit 60 Credit 76
- the debt to the processor has been reduced for the cost of the returnable waste left behind.
As a result of processing, by-products may also arise, which also belong to the seller. It is valued at the price of possible use or sale. In this case, the cost of the main products obtained as a result of processing is reduced by the estimated cost of by-products:
Debit 20 Credit 20, subaccount "Processing on tolling terms",
- the cost of customer-supplied products is reduced by the cost of by-products.
When transferring goods and food products for processing, trade organizations and public catering establishments use a separate subaccount of account 41 “Goods” to account for them. This could be subaccount 41-5 “Goods (products) transferred for processing on a toll basis.” Accordingly, when transferring goods (products) for processing, the seller makes an internal transfer from subaccount 41-1 “Goods in warehouses” to subaccount 41-5, and when they are received, a reverse entry is made.
When goods are shipped by trade organizations for finishing, processing (for example, for bottling, packaging, grinding, etc.), the seller draws up a consignment note in two copies in form N TORG-12 (approved by Resolution of the State Statistics Committee of Russia dated December 25, 1998 N 132). One copy is stored in the supplier's warehouse, the second is transferred to the processor.
Example 2.
The organization is engaged in the wholesale sale of ground coffee, packaged in bags of various weights. She entered into an agreement with a processor for the services of grinding coffee and packaging it into bags. Purchased coffee beans are transferred on a toll basis for processing. The cost of coffee transferred in August for grinding and packaging is 112,100 rubles, including VAT - 17,100 rubles; The processor issued an invoice for services - 41,300 rubles, including VAT - 6,300 rubles.
In the organization’s working chart of accounts, the following subaccounts are opened for accounts 41 and 60:
- 41-1-1 “Goods in warehouses in bags”;
- 41-1-2 “Prepackaged goods in warehouses”;
- 41-5 “Goods transferred for packaging to a processor”;
- 60-1 "Settlements with the supplier";
- 60-2 "Settlements with the processor."
The following entries are made in the organization’s accounting records in August:
Debit 41-1-1 Credit 60-1
- 95,000 rub. - purchased coffee beans;
Debit 19 Credit 60-1
- 17,100 rub. - the amount of VAT presented by the coffee supplier is highlighted;
Debit 41-5 Credit 41-11
- 95,000 rub. - coffee is transferred to the processor;
Debit 41-1-2 Credit 41-5
- 95,000 rub. - received coffee packaged in bags;
Debit 41-1-2 Credit 60-2
- 35,000 rub. - the cost of services for grinding and packaging coffee is included in the cost of the packaged goods;
Debit 19 Credit 60-2
- 6300 rub. - reflects the amount of VAT presented by the processor.
In subaccount 41-1-2, the actual cost of packaged coffee packages that are subject to further sale was formed in the amount of 130,000 rubles. (95,000 + 35,000).
A construction contract may stipulate that the provision of construction materials in whole or in a certain part is carried out by the customer (Clause 1 of Article 745 of the Civil Code of the Russian Federation). Materials purchased by an organization for the construction of a facility are accounted for in subaccount 10-8 “Construction materials” at the actual cost of their acquisition excluding VAT (clauses 5 and 6 of PBU 5/01).
The organization that transferred the materials to the contractor to perform construction and installation work does not write off the cost of such materials from its balance sheet. Therefore, the transferred materials for the construction of the facility are written off from subaccount 10-8 to subaccount 10-7.
The costs of constructing an object, regardless of the method of construction (contract or business), are accumulated in subaccount 3 “Construction of fixed assets” of account 08 “Investments in non-current assets”. Until the completion of construction and acceptance of the facility into operation, these costs constitute construction in progress (Instructions for using the Chart of Accounts). All construction costs form the initial cost of the constructed facility (clauses 7 and 8 of the Accounting Regulations “Accounting for Fixed Assets” PBU 6/01, approved by Order of the Ministry of Finance of Russia dated March 30, 2001 N 26n). Therefore, the cost of materials used by the contractor for construction is written off from subaccount 10-7 to the debit of subaccount 08-3 on the basis of a report on the materials consumed, signed by the supplier and the contractor. Since a unified form for such a report has not been approved, it can be compiled in any form.
The transfer of completed work by the contractor is formalized by an act of acceptance of completed work in Form N KS-2 and a certificate of the cost of work performed and expenses in Form N KS-3 (approved by Resolution of the State Statistics Committee of Russia dated November 11, 1999 N 100). In Form N KS-2, to reflect the customer-supplied materials used, a separate section “Customer Materials” is filled out, indicating their cost. The final amount of work performed does not include the cost of spent customer-supplied materials, which is reflected by the entry “Excluding customer materials.”
The cost of unspent materials returned by the contractor is accepted by the customer for accounting as a debit to subaccount 10-1 in correspondence with subaccount 10-7.
Note. If the remaining unused materials remain with the contractor, then the organization reflects their sale in the accounting records.
Completed construction work is accounted for by the customer in subaccount 08-3 at the contractual cost in accordance with paid and accepted invoices of contractors.
- from the processor
When transferring raw materials for processing ownership of them remains with the seller. Therefore, the processor does not have the right to reflect the received property on the balance sheet. To reflect them, the mentioned Instructions for using the Chart of Accounts recommend using off-balance sheet account 003 “Materials accepted for processing.” To account for materials in the warehouse and materials transferred for processing, it is quite logical to open separate sub-accounts:
- 003-1 "Customer's materials in the warehouse";
- 003-2 "Supplied materials in production."
Internal entries in analytical accounting for off-balance sheet account 003 are made upon receipt of materials from the supplier, write-off of customer-supplied materials used in production and return of unused materials to the supplier.
Accounting is carried out in quantitative and monetary terms at the prices specified in the documents for the transfer of materials. In addition, analytical accounting of customer-supplied materials must be organized by customers, names, quantity and cost, as well as by places of storage and processing (performance of work, manufacturing of products) (paragraph 3 of Article 156 of the Guidelines for accounting for inventories).
The basis for accepting customer-supplied raw materials for accounting is the invoice received from the customer. Reception of materials is formalized by a receipt order (Form N M-4). Moreover, in order to distinguish materials received on a toll basis from ordinary ones, it is advisable to include a distinctive sign in the receipt order. The specified unified form can be supplemented with the “Base” attribute, indicating in it “Received for processing on a toll basis” under the relevant agreement.
It is also possible to affix a stamp on the supplier's accompanying documents, certifying the quantity and quality of the received customer-supplied goods. This stamp, the imprint of which contains the same details as in the receipt order, is equated to a receipt order (clause 49 of the Methodological Instructions for Accounting for Inventory). The stamp must contain a note indicating that the materials were received on a toll basis.
Expenses incurred in the process of processing customer-supplied materials are reflected in the production cost accounts in the general manner. Such expenses include: depreciation of fixed assets used in processing, the cost of own auxiliary materials used in processing, wages with accrued insurance contributions to the Pension Fund of the Russian Federation, the Federal Social Insurance Fund of the Russian Federation and the Federal Compulsory Medical Insurance Fund, general business expenses, etc. These costs are recognized as expenses for ordinary activities and are reflected in the accounts for recording production costs (by debit of accounts 20, 23, 25, etc.) (clauses 5, 9 of the Accounting Regulations "Organization's Expenses" PBU 10/99, approved by Order of the Ministry of Finance of Russia dated 05/06/1999 N 33n). The composition of costs included in the cost of processing work (services) is the same as when processing own raw materials, with the exception of the cost of customer-supplied raw materials and the cost of selling finished products.
Expenses associated with the processing of customer-supplied raw materials (constituting the cost of work performed, processing services provided) are written off from cost accounts to the debit of subaccount 2 “Cost of sales” of account 90 “Sales”.
If the processor, along with the processing of customer-supplied raw materials, produces similar products from its own similar raw materials and sells them, then he must organize:
- separate warehouse accounting of customer-supplied and own materials;
- separate accounting of tolling and own operations.
This follows from the fundamentally different reflection in accounting of operations for the production of products from own and customer-supplied raw materials.
Note. Costs that cannot be clearly attributed to the processing of only its own or only customer-supplied raw materials must be distributed by the processor in the manner specified in the accounting policies.
The payment received from the supplier - revenue for services for the processing of MPZ is recognized by the processor as part of income from ordinary activities on the date the parties sign the acceptance certificate for the work performed or services provided (clauses 5, 12 of the Accounting Regulations "Income of the organization" PBU 9/99, approved by Order of the Ministry of Finance of Russia dated 05/06/1999 N 32n). Revenue under a toll agreement (contractual cost of work) is reflected in the usual way:
Debit 62 Credit 90-1
- reflects the debt of the supplier for rendered processing services.
Write-off of customer-supplied materials and returnable waste is carried out by an entry on the credit of account 003.
Example 3.
Let’s use the conditions of example 1: the organization’s costs for sewing suits from customer-supplied fabric are 176,500 rubles.
In the accounting of the organization, the operation of sewing men's suits from customer-supplied fabric will be reflected as follows:
Debit 003
- 240,000 rub. - reflects the cost of fabric used for sewing suits;
Debit 20 Credit 02, 10, 25, 26, 69, 70, etc.
- 176,500 - costs of sewing suits are taken into account;
Debit 62 Credit 90-1
- 241,900 rub. - the debt of the supplier for sewing suits is reflected;
Debit 90-3 Credit 68, subaccount “VAT calculations”,
- 36,900 - VAT is charged on the cost of sewn suits;
Debit 90-2 Credit 20
- 176,500 - costs of sewing suits were written off;
Debit 51 Credit 62
- 241,900 rub. - money was received for sewing suits;
Credit 003
- 240,000 - the cost of the fabric is written off (when transferring the suits to the seller).
At the end of the month, when determining the financial result from sales for ordinary activities, a profit of 28,500 rubles will be taken into account. (241,900 - 36,900 - 176,500) from costume tailoring services.
The result of processing customer-supplied materials, the processor must issue an invoice, which indicates the natural (quantitative) and value assessment of the processed products based on the cost of the customer-supplied materials used.
There is no unified form of invoice for transferring the processed product to the seller. Therefore, it is advisable for the processor to develop it and approve it as the primary document used in the annex to the accounting policy. As a basis, you can take, for example, form N MX-18 “Invoice for the transfer of finished products to storage places” (approved by Resolution of the State Statistics Committee of Russia dated 08/09/1999 N 66).
The processor draws up a delivery and acceptance certificate for the work performed (services provided). It indicates the cost of processing including VAT. In this case, the processor must issue an invoice to the seller.
The processor, as mentioned above, is obliged to provide the seller with a report on the consumption of materials. This document should reflect:
- name and quantity of customer-supplied materials received and used in production;
- the result of processing (processing), the quantity and range of processed products;
- data on unused remaining materials, waste received, including returnables, as well as by-products.
There is no unified report form, as well as a form of acceptance certificate for work performed (services rendered). Therefore, it is advisable for the processor to also develop and approve them independently. These documents must have the mandatory details provided for in Art. 9 of the Federal Law of November 21, 1996 N 129-FZ “On Accounting”.
The transfer to the supplier of the balance of unspent customer-supplied materials subject to return according to the contract is issued by an invoice in form N M-15 with the note “Return of unspent customer-supplied materials” and indicating the details of the relevant agreement.
Provided that the remnants of materials and returnable income are left with the processor, their accounting depends on the form of transfer of such values.
The terms of the contract may provide for a reduction in the recycler's remuneration by the cost of remaining materials and (or) returnable waste. As mentioned above, returnable waste is valued at the price of its possible use or at the selling price. When leaving them to the processor for the cost of the remaining unused raw materials, returnable waste, by-products, which, under the terms of the contract, remain with the processor, an entry must be made on the credit of account 003 and at the same time capitalized at their estimated value, that is, at the price of their possible use or sale.
If the processor intends to use the remnants of customer-supplied materials, their waste, and by-products as raw materials for the production of products, then the following is recorded for their cost:
Credit 003
- the cost of the remaining customer-supplied materials is written off;
Debit 10-1 (10-6) Credit 60
- the balance of customer-supplied materials (waste from processing, by-products) was taken into account.
If the by-products are sold without further processing, then the posting will be different:
Debit 41 Credit 60
- by-products are accounted for as goods.
Since the said material assets are being sold, the seller must also present the amount of VAT (clause 1 of Article 168 of the Tax Code of the Russian Federation). And this, in turn, leads to another wiring:
Debit 19 Credit 60
- VAT is allocated for the remaining customer-supplied materials and returnable waste.
The reduction of the debtor's debt is accompanied by the following posting:
Debit 60 Credit 62
- the debt of the seller has been reduced by the cost of the valuables left behind.
When receiving invoices from the supplier for the transferred remaining materials and returnable waste, the organization has the right to take into account the amounts of VAT allocated for them in tax deductions, provided that these values will be used in transactions subject to VAT:
Debit 68, subaccount "VAT calculations", Credit 19
- accepted for deduction of VAT amounts.
If the remnants of customer-supplied materials, returnable waste and by-products remain with the processor free of charge (clause 1 of Article 572 of the Civil Code of the Russian Federation), they are his gratuitous receipts.
Until the beginning of last year, if the specified material assets were not returned on an irrevocable basis, it was proposed to make an entry in accounting using subaccount 2 “Gratuitous receipts” of account 98 “Deferred income”:
Debit 10-6 (10-1) Credit 98-2
Subsequently, when they were written off to the accounts of production costs (sales costs), two entries were made:
Debit 20 (26) Credit 10-1 (10-6)
- the cost of materials (returnable waste) is taken into account in expenses for ordinary activities;
Debit 98-2 Credit 91-1
- the cost of materials used (returnable waste) is included in other income.
Since 2011, clause 81 of the Regulations on accounting and financial reporting in the Russian Federation (approved by Order of the Ministry of Finance of Russia dated July 29, 1998 N 34n), which defines deferred income as income received in the reporting period, but relating to the following, has become invalid reporting periods (clause 19, clause 1 of Amendments to regulatory legal acts on accounting (given in the Appendix to Order of the Ministry of Finance of Russia dated December 24, 2010 N 186n)). At the same time, the Instructions for using the Chart of Accounts have not changed.
In Sect. V of the Balance Sheet has line 1530 “Deferred Income”. The balance sheet, in accordance with clause 20 of the Accounting Regulations “Accounting Reports of Organizations” (PBU 4/99) (approved by Order of the Ministry of Finance of Russia dated July 6, 1999 N 43n), must contain an indicator of deferred income. However, from the financial statements it is reasonable to reflect on line 1530 of the Balance Sheet only:
- budget funds allocated by a commercial organization to finance expenses (clause 9 of the Accounting Regulations “Accounting for State Aid” PBU 13/2000, approved by Order of the Ministry of Finance of Russia dated October 16, 2000 N 92n);
- the difference between the total amount of leasing payments under the leasing agreement and the cost of the leased property (clause 4 of the Instructions on reflecting transactions under a leasing agreement in accounting, approved by Order of the Ministry of Finance of Russia dated February 17, 1997 N 15).
The above amounts are reflected in the credit of account 98. And other amounts previously recorded in account 98 are credited to the corresponding settlement accounts or included in the organization’s income. Consequently, leaving the material assets in question on an irrevocable basis in accounting is reflected by the posting:
Debit 10-6 (10-1) Credit 91-1
- reflects the cost of returnable waste (the remainder of customer-supplied materials).
Tax obligations
Chapter 25 of the Tax Code of the Russian Federation does not contain any special provisions devoted to tolling operations. In Chapter 21 of the Tax Code of the Russian Federation they are mentioned only in paragraph 5 of Art. 154 Tax Code of the Russian Federation. However, it talks about calculating the tax base for toll work. Thus, it concerns more the processor than the seller.
Thus, both when calculating income tax and when calculating VAT, the seller must proceed from the general norms of the Tax Code of the Russian Federation.
When the supplier transfers raw materials for processing, he does not incur expenses for tax purposes, as in accounting. After all, the owner of the raw materials does not change, there is no sale, and therefore there is no disposal of assets.
It was noted above that the supplier, when transferring raw materials (materials), draws up an invoice in the form M-15, in which it is necessary to indicate that the goods and materials are transferred for processing on a toll basis. Not finding such an entry in the invoice, as well as a note in the receipt order on form M-4 about the receipt of customer-supplied raw materials to the performers, tax authorities sometimes try to charge additional income tax, believing that sales are taking place. The judges of the FAS Povolzhsky District found untenable the argument of the tax authority about the need to indicate in the invoices in form M-15 the entry “On toll-to-pay terms under agreement N”, since the standard interindustry form of the M-15 invoice does not contain the relevant details (Resolution of the FAS Povolzhsky District dated 10/14/2008 N A55-17389/2007).
The cost of the recycled materials received back, in turn, is not taxable income for the seller.
Davalets by virtue of paragraphs. 6 clause 1 art. 254 of the Tax Code of the Russian Federation includes among the expenses taken into account when calculating income tax, the costs of paying for the services of a third-party organization for processing raw materials. This is confirmed by the Ministry of Finance of Russia in Letter dated July 19, 2006 N 03-03-04/1/586.
This norm qualifies the costs of purchasing work and services of a production nature performed by third-party enterprises as part of material costs that reduce income received. The legislator recommended that certain types of material costs be classified as direct expenses (paragraph 6, paragraph 1, article 318 of the Tax Code of the Russian Federation). Third party services are not listed among them. In the said Letter, the financiers emphasized that the costs of paying for the services of a materials processor for the purpose of calculating income tax are indirect.
Consequently, an organization that uses the accrual method when recognizing income and expenses can take such costs into account entirely in the expenses of the current period (paragraph 1, paragraph 2, article 318 of the Tax Code of the Russian Federation). Moreover, the costs of paying for the services of the processor are included in the tax base on the date of signing the act of acceptance and transfer of work (services) (paragraph 3, paragraph 2, article 272 of the Tax Code of the Russian Federation).
Davalets, based on the requirements of paragraph 1 of Art. 252 of the Tax Code of the Russian Federation, it is necessary to justify the involvement of a processor in the production of goods. To do this, the contract must clearly stipulate the distribution of responsibilities between the parties to ensure the production process.
Materials that have been processed are taken into account for taxation only after they are released into production (paragraph 2, paragraph 2, article 272 of the Tax Code of the Russian Federation). And it is recommended to classify them as direct expenses (paragraph 6, paragraph 1, article 318 of the Tax Code of the Russian Federation). Direct expenses are included in the expenses of the current reporting (tax) period as products, works, and services are sold, the cost of which they are taken into account in accordance with Art. 319 of the Tax Code of the Russian Federation (paragraph 2, clause 2, article 318 of the Tax Code of the Russian Federation).
Under the cash method, expenses are recognized on the date of payment for work performed.
For profit tax purposes, the value of the remaining raw materials received by the organization (without payment) is subject to accounting as part of non-operating income (Article 250 of the Tax Code of the Russian Federation). Depending on the specific factual circumstances, the corresponding amount may be reflected as the value of property received free of charge or as unclaimed accounts payable if these balances have not been claimed by the customer within three years.
The need to include in non-operating income the cost of non-refundable customer-supplied materials as received free of charge (since this value in the taxpayer’s accounting was not subject to compensation to the customer and was not included in accounts payable) was confirmed in the Resolution of the Federal Antimonopoly Service of the Moscow District dated January 27, 2006, January 20, 2006 N KA-A40 /9756-05-D4.
The fact that the surplus raw materials that remained unprocessed within the framework of the toll agreement in accordance with Art. 250 of the Tax Code of the Russian Federation from the processor are non-operating income, as indicated in the Resolution of the Federal Antimonopoly Service of the Volga Region dated November 15, 2005 N A65-27608/2004-SA2-34.
The object of VAT taxation is transactions for the sale of goods (work, services) (clause 1 of Article 146 of the Tax Code of the Russian Federation). Sales, in turn, are recognized as the transfer of ownership rights to goods, the results of work performed, and the provision of services by one person to another. When transferring customer-supplied raw materials to the contractor for processing, the customer does not transfer to him the ownership rights to the materials. Accordingly, such a transfer is not recognized as a sale, and the object of VAT taxation does not arise in this case. When transferring raw materials, the supplier draws up an invoice, which indicates the book value of the materials or their market price determined in the contract. The VAT amount is not given and no invoice is issued.
When performing work on the processing of raw materials and materials, the subject of VAT taxation exists. And the tax in this case is charged by the processor. The tax base will be equal to the cost of processing raw materials, their processing or other transformation, taking into account excise taxes (for excisable goods) and without including VAT (clause 5 of Article 154 of the Tax Code of the Russian Federation). Consequently, the tax base includes only the cost of services provided by the processor, which is specified in the contract; the cost of customer-supplied raw materials (materials) is not taken into account when determining it.
Moreover, regardless of what rate the processed customer-supplied raw materials were taxed at, the cost of work performed is taxed at a rate of 18%.
The corresponding VAT is presented by the processor for payment to the seller. Consequently, at the moment the results of the work are accepted for accounting, the seller has the right to deduct the tax billed to him, provided:
- availability of an invoice from the contractor;
- use of processed raw materials in transactions subject to VAT.
The supplier, in addition, has the right to apply a deduction of input VAT on raw materials purchased for transfer to processing, from the moment of their receipt and subject, again, to the presence of an invoice from the supplier, as well as compliance with the other requirements of Art. Art. 171, 172 Tax Code of the Russian Federation.
The supplier will have to charge VAT only if, upon completion of the work, according to the terms of the contract, the remaining raw materials and returnable waste are not returned to him. If these values remain with the processor by reducing the price of the work or on a free basis, their value is included in the VAT taxable base. Thus, in any case, the seller must reflect in his accounting the operation of the sale of inventories with the accrual of VAT.
The contractor, if the above conditions are met, has the right to take advantage of a tax deduction.
