Conservation of fixed assets is a set of necessary measures aimed at ensuring the safety of objects during their temporary inactivity.

A comment

Conservation of a fixed asset object is a temporary suspension of the use of an object, by decision of management.

The legislation uses the term “preservation of fixed assets”, but there is no clear definition for it.

The rules for conservation of fixed assets are regulated by regulations:

Tax Code of the Russian Federation (TC RF);

Accounting Regulations "Accounting for Fixed Assets" PBU 6/01, approved. By order of the Ministry of Finance of the Russian Federation dated March 30, 2001 N 26n.

Thus, PBU 6 establishes accounting rules:

For the objects of fixed assets used to implement the legislation of the Russian Federation on mobilization preparation and mobilization, which mothballed and are not used in the production of products, when performing work or providing services, for the management needs of the organization or for provision by the organization for a fee for temporary possession and use or for temporary use, depreciation is not accrued (clause 17).

During the useful life of an object of fixed assets, the accrual of depreciation charges is not suspended, except in cases of its transfer by decision of the head of the organization for preservation for a period of more than three months, as well as during the period of restoration of the object, the duration of which exceeds 12 months (clause 23).

Similar rules are established for corporate income tax:

“For the purposes of this chapter, fixed assets are excluded from depreciable property: those transferred by decision of the organization’s management for conservation for more than three months"(Clause 3 of Article 256 of the Tax Code of the Russian Federation);

“For fixed assets transferred by a taxpayer for free use, starting from the 1st day of the month following the month in which the transfer occurred, depreciation is not calculated. A similar procedure is applied for fixed assets transferred by decision of the organization’s management for conservation for more than three months, as well as for fixed assets that, by decision of the organization’s management, are undergoing reconstruction and modernization for more than 12 months.

Upon termination of the gratuitous use agreement and the return of fixed assets to the taxpayer, as well as during re-opening or completion of reconstruction (modernization), depreciation is accrued in the manner determined by this chapter, starting from the 1st day of the month following the month in which the return of fixed assets to the taxpayer, completion of reconstruction (modernization) or reactivation of the fixed asset took place" (clause 2 of Art. 322 of the Tax Code of the Russian Federation).

Non-operating expenses include expenses associated with the mothballing and re-mothballing of production capacities and facilities, including the costs of maintaining mothballed production facilities and facilities (clause 9, clause 1, article 265 of the Tax Code of the Russian Federation).

Thus, the main feature of mothballed objects for a period of more than three months is that depreciation is suspended for them. At the same time, the fixed asset itself continues to be listed as part of fixed assets (in accounting - account). In case of reactivation of an object, depreciation on it continues in the usual manner.

For capital construction projects, the Rules for the conservation of capital construction projects have been approved (by Decree of the Government of the Russian Federation of September 30, 2011 N 802 and in accordance with Part 9 of Article 52 of the Town Planning Code of the Russian Federation).

In accordance with these rules, a decision on the conservation of an object is made in the event of a termination of its construction (reconstruction) or if it is necessary to suspend the construction (reconstruction) of an object for a period of more than 6 months with the prospect of its resumption in the future.

The decision on conservation of an object must determine:

a) a list of works on conservation of the object;

b) persons responsible for the safety and security of the facility, including structures, equipment, materials and the construction site (official or organization);

c) the timing of the development of technical documentation necessary for carrying out conservation work on the object, as well as the timing of the conservation work;

d) the amount of funds for carrying out conservation work on the object, determined on the basis of an act prepared by the person carrying out the construction (reconstruction) of the object (hereinafter referred to as the contractor), and approved by the developer (customer).

Based on the decision made to preserve the facility, the developer (customer) together with the contractor conducts an inventory of completed construction (reconstruction) work in order to record the actual condition of the facility, the availability of design documentation, structures, materials and equipment.

In the case of conservation of other fixed assets, the procedure for conservation may be different. But it is obvious that the key decision on conservation is made by the authorized person of the organization. Such a decision is formalized in the form of an order, regulation or other similar document.

It should be noted that suspending depreciation of an object as a whole is not beneficial to the organization, since it reduces expenses recognized for income tax. Therefore, sometimes tax authorities require suspension of depreciation in cases where an object is temporarily not in use, but is not registered as conservation.

It should be noted that conservation is a right, not an obligation of the organization. Conservation is a right, not an obligation. Thus, considering a specific case, the judges noted:

"... the suspension of the operation of ships in the winter is caused by the seasonal nature of the activity due to climatic conditions... temporary downtime during the winter inter-navigation period does not automatically entail the mothballing of the ships. At the same time, the courts of appeal and cassation also took into account that during this period activities were carried out "related to the maintenance, repair and modernization of ships in order to prepare for new navigation. The society did not make decisions on mothballing the controversial ships." (Determination of the Supreme Arbitration Court of the Russian Federation dated November 23, 2012 No. VAS-14779/12 in case No. A40-65991/11-129-282). - durable labor equipment (over 12 months). Fixed assets include buildings, machinery and equipment, structures and transmission devices, and vehicles.

The tax base of simplified organizations that pay a single tax on income is not reduced by the costs of mothballing unfinished construction. With this object of taxation, no expenses are taken into account (clause 1 of Article 346.18 of the Tax Code of the Russian Federation).

It is also impossible to take them into account on the basis of subparagraph 5 of paragraph 1 of Article 346.16 of the Tax Code of the Russian Federation as material expenses (purchase of works and services of a production nature), since the investor does not enter into direct relations with the contractor.

For information on the procedure for accounting for expenses during simplification by the contractor, see How to record contractor expenses under a construction contract .

UTII

The activities carried out by the contractor under the contract (investment agreement) are not transferred to UTII (clause 2 of Article 346.26 of the Tax Code of the Russian Federation). Taxation of such activities is carried out in accordance with or .

If an investor pays UTII, then the costs of conserving an unfinished construction site will not affect the calculation of this tax. Payers of UTII calculate this tax based on imputed income (clause 1 of Article 346.29 of the Tax Code of the Russian Federation).

OSNO and UTII

If the investor applies the general taxation system and pays UTII, then the procedure for accounting for expenses for the conservation of an unfinished construction project depends on the type of activity for which the constructed object was planned to be used.

If an unfinished construction project is intended for use only within the framework of activities on the general taxation system, then keep tax records of conservation expenses according to the rules in force under .

If an unfinished construction project is intended for use only within the framework of activities on UTII, then keep tax records of conservation expenses according to the rules in force when .

An unfinished construction project may be intended for simultaneous use in activities subject to UTII and in activities for which the investor pays taxes under the general taxation system. In this case, the organization maintains tax accounting for conservation expenses with some peculiarities.

In addition, if the investor decides to apply a VAT deduction, it is necessary to distribute the amount of “input” VAT among conservation costs. This is necessary to determine the amount of tax that an organization can claim as a deduction. This procedure is provided for in paragraph 4 of Article 170 of the Tax Code of the Russian Federation. For more details on the distribution of “input” VAT, see How to deduct input VAT when separately accounting for taxable and non-taxable transactions .

Conservation costs: accounting and taxation (Antanenkova E.I.)

Article posted date: 08/17/2013

How to formalize the conservation of idle fixed assets and unfinished construction projects? How to reflect these transactions in accounting? What will be the tax consequences?

Conservation of fixed assets

Conservation is the implementation of actual measures to maintain an object of fixed assets in good condition (limiting access to the object, its technical protection, etc.), i.e. conservation means the temporary non-use of an object of fixed assets, which does not provide for its liquidation (disposal); accordingly, there are no grounds for writing off the object from the register.
Objects of fixed assets located in a certain technological complex and (or) having a completed cycle of the technological process are transferred to conservation when they do not bring economic benefit (income), are not used in production and management activities and cannot be used for temporary transfer for a fee use.
To determine the list of fixed assets subject to conservation, it is advisable to conduct an inventory. The order appoints a commission, which, as a rule, includes: the chief engineer (chairman of the commission), heads of relevant departments, an accounting employee, a representative of the economic department, an employee in charge of property management, persons entrusted with responsibility for the safety of conservation objects, and etc.
The commission determines the feasibility of transferring environmental facilities to conservation (re-preservation); draws up acts of conservation (re-preservation), etc.; conducts surveys of mothballed objects, economic justification for transferring to conservation (re-preservation); draws up cost estimates for the conservation (re-preservation) of objects, including additional costs for the maintenance of mothballed objects.
After this, the manager issues an order to preserve temporarily unused equipment and machinery. There is no unified form for this document. Therefore, it can be compiled in any form, giving a list of idle fixed assets. It is also advisable to indicate in the order the reason for the conservation of the object, the date of transfer, the period of conservation, and the residual value of the object. It is also necessary to develop an internal local document (a procedure that will determine the composition of measures for the conservation of objects and the sequence of their implementation). When mothballing specific fixed assets, it is necessary to draw up and approve cost estimates for the maintenance of mothballed production facilities and facilities.
In the inventory cards of fixed assets (form N OS-6), a note should be made about their transfer to conservation. Since a special column is not provided for this, information about conservation can be indicated in Section. 4 “Information on acceptance, internal movements, disposal (write-off) of fixed assets” cards.
Upon completion of conservation work, an act is drawn up, which is signed by the commission and approved by the head of the organization. It is advisable to provide a list of mothballed fixed assets indicating their inventory numbers, initial and residual values, amounts of accrued depreciation, useful lives and mothballing periods.
There is no unified form of this document, so the organization should develop it taking into account the specifics of its activities and record it in its accounting policies.
During the conservation process, fixed assets do not physically wear out. This is the reason for excluding the corresponding objects from depreciable property in accounting, but only in the case when the conservation period exceeds 3 months.
PBU 6/01 does not clearly reflect from what period depreciation should stop accruing in connection with the conservation of an object, so it is advisable to reflect this point in the accounting policy of the organization. For example, suspend the calculation of depreciation from the next month after mothballing, and resume from the month following the month of re-mothballing.
Mothballed objects should continue to be accounted for in account 01 “Fixed Assets,” but separately. In other words, the mothballing of idle equipment is reflected by an entry on the transfer of the original cost to the debit of account 01 “Fixed Assets,” subaccount “Fixed Assets for Conservation,” from the credit of account 01 “Fixed Assets,” subaccount “Fixed Assets in Operation.”
Costs for the maintenance of mothballed production facilities (wages with accruals, security of these facilities, consumption of materials for conservation and during preventive measures, heating, electricity, services of third-party organizations for the maintenance of mothballed facilities, etc.) are debited to account 91 "Other" income and expenses" in correspondence with cost accounts within the budget approved by the head of the organization.

Conservation of unfinished construction projects

The suspension of construction may be due to the lack of financial ability to continue construction, difficulties associated with organizing the receipt of technical conditions for connecting the facility to utility networks and communications (Letter of the Ministry of Finance of Russia dated December 11, 2009 N 03-03-06/1/805), gross violations, admitted at the design stage, discovered during construction work, the need to wait for a warmer (non-rainy) season, etc.
After eliminating the reasons that caused the conservation, work at the site will continue, therefore the construction contract is not terminated, but is suspended for an indefinite (or definite) period. There is no rule in the Civil Code of the Russian Federation that would link conservation with the final termination of the contractual relations of the parties, therefore the intentions of the parties to terminate the contract in the event of conservation of construction, as well as the procedure for its termination, must be provided for in the contract (Resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated 19.10 .2006 in case No. A29-11601/2005-2e).
If, for reasons beyond the control of the parties, work under a construction contract is suspended and the construction project is mothballed, the customer is obliged to pay the contractor in full for the work performed up to the moment of mothballing, as well as to reimburse expenses caused by the need to stop work and mothball the construction, taking into account the benefits that the contractor received or could receive as a result of termination of work (Article 752 of the Civil Code of the Russian Federation).
If it is necessary to stop work or suspend it for more than six months, the developer (customer) is obliged to ensure conservation of the capital construction project. He must notify the contractor, the authority that issued the construction permit, as well as the state construction supervision authority (if the construction of the facility is subject to state construction supervision) of his decision within 10 calendar days.
The basis for starting conservation of an unfinished construction project is the administrative document of the developer (customer).
According to clause 5 of the Rules for the conservation of a capital construction project (approved by Decree of the Government of the Russian Federation of September 30, 2011 N 802), the decision on conservation of the facility must determine:
- list of works on conservation of the object;
- persons responsible for the safety and security of the facility, including structures, equipment, materials and the construction site (official or organization);
- deadlines for the development of technical documentation necessary to carry out conservation work on the object, as well as the timing of the conservation work;
- the amount of funds for carrying out conservation work on the object, determined on the basis of an act prepared by the person carrying out the construction of the object (contractor) and approved by the developer (customer).
To develop technical documentation, the developer (customer) and the contractor draw up a special list of works and costs, on the basis of which an estimate is developed for the conservation and protection of the construction site during the conservation period.
How exactly the contractor will carry out the construction and installation work provided for by this estimate is stipulated in the additional agreement to the main contract for capital construction, which sets the deadline for completing the work and handing over the mothballed construction projects to the developer (customer), and also indicates the time frame within which the contractor expenses incurred will be reimbursed.
At the initial stage of conservation, an inventory commission is formed, which includes representatives of interested parties (contractor, developer (customer), design organization, etc.). Based on the results of its work, inventory lists are formed and a report is drawn up in a free form, which reflects the name of the construction project, the location of the measurement, the basis for the measurement, data on estimates and reports of work performed, the result obtained from control measurements, and the date of the survey.
The inventory commission determines the condition and degree of readiness of the elements of the construction project that is subject to conservation; identifies unreasonable underestimation or overestimation of the cost of construction work performed, as well as facts of unreasonable application of estimate norms, coefficients, standards, etc.
In addition, during the inventory it is necessary to carry out control measurements of the physical volumes of work, which, based on the results of the inventory, are compared with the indicators of estimates, acts and data reflected in the accounting under account 08 “Investments in non-current assets”, subaccount 3 “Construction of fixed assets of the developer (customer) )". The control measurement of the physical volumes of work consists of comparing the actual volumes of work performed in physical terms (at an unfinished construction site) with similar volumes indicated in the certificates of completion of work. If it is determined that the work has not been completed or has been completed to a lesser extent, then it is not subject to payment and is excluded from the scope of work performed.
Copies of the inventories and the act drawn up based on the results of the inventory are transferred to the accounting department of the developer (customer) and the contractor. The acts must be signed by members of the commission with the participation of the contractor (subcontractor) organization.
After making a decision to suspend construction work, the customer and the contractor draw up an act on the suspension of construction (form N KS-17), which is used to formalize the suspension of construction (mothballing or termination of construction) and is drawn up in the required number of copies for each construction project, indicating those suspended by construction works
One copy of the act is given to the contractor, the second to the customer, and the third, upon request, to the investor. Information about conservation costs is reflected in the act based on the estimate.
As a result of construction, the costs incurred, reflected in account 08 "Capital investments", are divided into costs that increase and do not increase the cost of fixed assets. The latter are also divided into costs provided for and not provided for in the consolidated construction cost estimates.
Upon completion of construction work, costs that increase the cost of objects form the inventory value of the building, and costs that do not increase the cost of fixed assets are written off from the “Capital Investments” account at the expense of the provided sources of financing as the relevant work is completed.
Clause 3.1.7 of the Regulations on Accounting for Long-Term Investments establishes that construction conservation costs are expenses that do not increase the cost of fixed assets and are not included in the consolidated construction cost estimates.
Upon completion of the work, the expenses of the developer’s organization (customer) for the conservation of an unfinished building can be written off as part of non-operating expenses, for which account 91 “Other income and expenses”, subaccount 2 “Other expenses” is intended.
The developer (customer) can not only bear the costs of preserving the facility, but also pay for the maintenance of the unfinished facility (security, lighting, etc.), these costs should also be reflected in account 91.
For the convenience of obtaining information about the condition of the property for account 08 “Investments in non-current assets”, it is advisable for the developer (customer) to open a separate sub-account “Objects of unfinished construction under conservation”. In this case, the transfer to mothballing of an unfinished construction project will be reflected by the entry:


An unfinished construction site was transferred for conservation.
In the developer's (customer's) accounting, conservation of unfinished construction projects can be reflected as follows:
Dt sch. 08 "Investments in non-current assets", subaccount. "Objects of unfinished construction under conservation",
K-t sch. 08 "Investments in non-current assets", subaccount. "Construction of fixed assets",
transfer to conservation of an unfinished construction site;
Dt sch. 91-2 "Other expenses"

the costs of developing a conservation project are reflected;
Dt sch. 91-2 "Other expenses"
K-t sch. 60 "Settlements with suppliers and contractors"
conservation costs charged by the contractor have been written off;

K-t sch. 51 "Current accounts"
the debt to the design organization has been repaid;
Dt sch. 60 "Settlements with suppliers and contractors"
K-t sch. 51 "Current accounts"
paid for the contractor's services;
Dt sch. 91-2 "Other expenses"
K-t sch. 60 "Settlements with suppliers and contractors"
penalties under the contract payable to the contractor are reflected;
Dt sch. 60 "Settlements with suppliers and contractors"
K-t sch. 51 "Current accounts"
a fine was transferred to the contractor;
Dt sch. 91-2 "Other expenses"
K-t sch. 70 "Settlements with personnel for wages", 69 "Settlements for social insurance and security", 60 "Settlements with suppliers and contractors"
expenses for security of the facility are reflected;
Dt sch. 91-2 "Other expenses"
K-t sch. 60 "Settlements with suppliers and contractors"
expenses for lighting the facility are reflected.
Since accounting for the costs of conservation of an unfinished construction project directly depends on the source of financing, it is advisable for the developer organization (customer), taking into account the specifics of the activity and based on the source of financing of these costs, to independently develop the procedure and methodology for reflecting these costs in the accounting accounts, securing them in its accounting policy.
If the customer-developer is also an investor, then he can classify the costs of conservation and maintenance of the mothballed WIP object as other in accordance with clause 11 of PBU 10/99.
If the customer-developer and the investor are different persons, accounting for the costs of preserving the object comes down to the following. By virtue of the Law on investment activities in the Russian Federation, carried out in the form of capital investments, customers are individuals and legal entities authorized by investors who implement investment projects. At the same time, they do not interfere with the entrepreneurial and (or) other activities of other investment entities, unless otherwise provided by the agreement between them. The rights of investors include concluding agreements with other subjects of investment activity.
In practice, customers, on the basis of a civil law agreement concluded with investors, undertake, as a rule, on their own behalf and at the expense of the investor, to organize construction (implement an investment project) for a fee. These conditions make it possible to qualify the concluded investment agreement as an agency agreement. In addition to paying remuneration, the principal is obliged to reimburse the agent for the amounts spent by him on the execution of the commission order. Thus, the customer carrying out the construction is, in fact, an intermediary, and he can re-invoice the costs he incurred for the conservation of construction to the investor. In this case, the customer-developer can accumulate the costs of preserving the facility on account 08 “Investments in non-current assets” in a separate subaccount. Further, these costs, as well as VAT amounts, are transferred to the investor and reflected in the debit of account 76 “Settlements with various debtors and creditors.”

Income tax

Subclause 9, clause 1, art. 265 of the Tax Code of the Russian Federation allows you to include in non-operating expenses that reduce taxable profit the costs associated with the mothballing and re-mothballing of production capacities and facilities, including the costs of maintaining mothballed production capacities and facilities. This norm also applies to objects whose construction or reconstruction has not been completed.
The Ministry of Finance of Russia in Letters dated 09/15/2010 N 03-03-06/1/590 and dated 03/18/2009 N 03-03-06/1/164 noted that the costs associated with the conservation of fixed assets are aimed at preserving and maintaining in proper condition of the property, which in the future will generate income, and therefore they (including the costs of current maintenance, repair, security of objects necessary for the maintenance of idle and mothballed fixed assets) are recognized as economically justified for profit tax purposes.

Conservation of fixed assets

For profit tax purposes, mothballed fixed assets are excluded from depreciable property, but only if the mothball period exceeds three months (clause 3 of Article 256 of the Tax Code of the Russian Federation). Depreciation on idle equipment should be stopped from the 1st day of the month following the month in which fixed assets will be transferred for long-term mothballing. Depreciation of these objects should begin again from the 1st day of the month following the month of re-opening (Clause 2 of Article 322 of the Tax Code of the Russian Federation).
It is the actual, not the expected, conservation period that matters. If, by decision of the manager, the equipment was handed over for conservation for six months, but after two months it was re-mothballed for some reason, additional depreciation will have to be charged for these two months.
After reactivation of a fixed asset, depreciation is accrued in the same manner (Letter of the Federal Tax Service of Russia for Moscow dated December 1, 2009 N 16-15/125953). In this case, the useful life of the object should be extended for the period of conservation (clause 3 of Article 256 of the Tax Code of the Russian Federation).
Expenses for the protection of mothballed facilities and their repair are recognized as economically justified for profit tax purposes (Letter of the Ministry of Finance of Russia dated 04/03/2009 N 03-03-06/1/218, Determination of the Supreme Arbitration Court of the Russian Federation dated 01/31/2008 N 691/08).

Conservation of "unfinished"

Expenses associated with the mothballing and re-mothballing of production capacities and facilities, including the costs of maintaining mothballed production capacities and facilities, are classified as non-sales. This applies to the client-developer, who is also an investor.
If the customer-developer and the investor are different persons and we are talking about an agency agreement, then in tax accounting the costs of the customer-developer are subject to reimbursement. They do not belong to him, they are not taken into account for the purpose of calculating taxable profit, as well as amounts received from the investor in order to reimburse the costs of conserving the object (clause 9, clause 1, article 251, clause 9, article 270 of the Tax Code of the Russian Federation) .

Value added tax

When transferring under-depreciated fixed assets for conservation, in respect of which VAT amounts were previously legally accepted for deduction, the restoration of tax amounts from the residual value of such fixed assets for the period of conservation is not carried out, since there is no obligation to restore VAT in the case of transferring an object for conservation (p 3 Article 170 of the Tax Code of the Russian Federation; Letters of the Federal Tax Service of Russia dated 06.20.2006 N ШТ-6-03/614@, Ministry of Finance of Russia dated 06.06.2006 N 03-04-15/116).
But what about the “input” VAT on “conservation” expenses? There are two points of view on this issue.
According to the regulatory authorities, it is impossible to apply a VAT deduction for conservation costs, since they are not related to the conduct of taxable operations, since the mothballed property is not used in production activities. In addition, conservation work is work for one’s own needs, which is not subject to VAT.
According to arbitration courts, maintaining temporarily unused production facilities in proper condition relates to the production activities of enterprises. And if it is subject to VAT, then the deduction of input tax on “conservation” expenses is legal (Resolutions of the Federal Antimonopoly Service of the North-West District dated 04.04.2008 in case No. A56-51219/2006, UO dated 05.08.2010 N F09-6084/10-S3 in case No. A07 -13364/2009, etc.).
Taking into account the above, if after re-conservation and completion of construction it is planned to use the property to perform operations subject to VAT, then the expenses incurred during conservation are associated with activities subject to this tax. VAT is deductible in the usual manner, i.e. after registration of the specified materials (works, services) and in the presence of an invoice (clause 1 of Article 172 of the Tax Code of the Russian Federation). In this case, there is a possibility that the taxpayer will have to defend this position in court.

Property tax

For property tax, the object of taxation is fixed assets. Since the mothballed property remains part of fixed assets, there is no reason not to pay tax on its value (Letter of the Ministry of Finance of Russia dated May 15, 2006 N 03-06-01-04/101).
When carrying out capital construction, property tax must be paid from the moment the completed construction is reflected as a fixed asset. Property is included in fixed assets if it meets the criteria established by clause 4 of PBU 6/01. In particular, this means that the construction project must be brought to a condition suitable for use. Consequently, unfinished construction projects that are under conservation are not recognized as fixed assets and, therefore, are not subject to property tax (Letter of the Ministry of Finance of Russia dated June 22, 2011 N 03-03-06/1/370).

Conservation of fixed assets is used during periods of inactivity. This event is a right, but not an obligation of the employer.

What is OS preservation?

Fixed assets are the property of the company. These include land plots, buildings, equipment, etc. Conservation of fixed assets is a set of measures to temporarily shut down the operation of one or more fixed assets. The main feature of the event under consideration is the introduction of the OS into operation after the period specified in the documents.

The essence of the procedure is explained by its name. Conservation means preservation. The purpose of the event is to preserve the quality and characteristics of the OS, the amount of funds in current accounts. At the same time, operating costs are also reduced or eliminated altogether. At the same time, the OS does not bring any profit.

IMPORTANT! The maximum conservation period is 3 years. In some cases it can be extended.

In what cases is conservation carried out?

Conservation is relevant in the following circumstances:

• Seasonal work has ended, and therefore the equipment ceases to be used until the next season. For example, the company uses snow removal equipment in winter. Naturally, it is not used in the summer. In this case, conservation becomes relevant.
• Temporary downtime at the enterprise. For example, an insufficient number of threads was supplied to production. Due to this, work cannot continue. Until the threads are delivered in full, the operation of the equipment is suspended.
• Due to lack of funds and economic inefficiency, cuts were made. For example, a workshop closed.
• The OS broke down and was sent for repair.

That is, conservation is needed when the OS is temporarily not in use for various reasons.

Consequences of conservation of fixed assets

Conservation is divided into two main stages:

1. Actual completion of operation.
2. Recording information in relevant documents, as well as in the accounting program.

Conservation involves documentation. This is a voluntary procedure. That is, the entrepreneur does not have to draw up documents. You can simply stop using it. On the other hand, it is beneficial for a person to carry out full conservation. Let's consider the consequences of this procedure:

• Income tax is reduced. Expenses for maintenance, wages, depreciation, etc. may be included. The tax base is reduced by the amount of these expenses on the basis that the operating system ceases to be used for the purpose of making a profit.
• Depreciation will not be charged for storage lasting 3 months or more. The basis for determining the company's property tax will not be reduced due to the fact that the residual value of the fixed assets does not decrease.
• The useful life is extended by the duration of depreciation.
• It becomes more convenient to do accounting. The accountant opens subaccount 01 “OS on conservation.” In 1C it is possible to disable depreciation charges for unused operating systems.

Conservation has more advantages than disadvantages, and therefore it is used quite often.

What fixed assets are subject to conservation?

You can preserve any object that belongs to the OS. That is, which is recorded on account 01. To indicate an item on this account, the following conditions must be met:

• The OS is used as part of production; it is required either for the operation of the company or for managing it. For example, a company car belongs to the OS, but a marble monument does not.
• The facility has been in operation for more than a year. That is, objects of short-term use (packaging, etc.) will not be classified as fixed assets.
• The company has no plans to resell the item. For example, property acquired for further sale is not classified as fixed assets.
• The object is expected to bring benefits. For example, the company’s land is used for planting vegetables for their further sale.

Fixed assets will include buildings, service vehicles, equipment, office equipment, and natural resources.

ATTENTION! Natural resources are not conserved because they are not subject to depreciation. That is, the motivation to carry out the event is lost.

The procedure for registering conservation of fixed assets

The registration of conservation is regulated in detail for budgetary and government agencies. The procedure for commercial organizations is less strict. Conservation is divided into the following stages:

1. At the general meeting, a decision on conservation is made.
2. Based on the decision, an order is drawn up.
3. An inventory of fixed assets is carried out.
4. An act of transferring the OS for preservation is being carried out.
5. The changed status of the property is recorded in the 1C program.

An order is drawn up to transfer the OS into conservation. It is needed to record the intentions of management. This is the required paper. It must bear the signature of the head of the company. The document contains the following information:

• Reasons for transferring an object to conservation.
• Preservation period.
• Persons responsible for the procedure.

A conservation act is also drawn up. It is needed to record a procedure that has already been completed. Compiled at the request of the manager. The document is signed by the commission members and the head. It contains the following information:

• List of objects that are conserved.
• Start date of the procedure.
• Expenses for conservation.

The document is drawn up in any form.

Nuances of paying taxes

As part of conservation, both transport tax and property tax are paid. If the organization is located at, the tax burden is reduced by this amount. There is no need to reinstate VAT. However, sometimes such a need arises:

• Mothballed fixed assets are transferred to the authorized capital of another company.
• The company switches to a different tax system.
• The property, after the termination of conservation, will be used in work that is not subject to VAT.

In all these cases, you need to look for primary documentation and then restore VAT.

Accounting for conservation of fixed assets

The transfer of fixed assets for preservation is recorded in accounting after the order is signed and the act is approved. Even after the object is transferred to conservation, it continues to be included in the OS. To record objects in accounting, a sub-account “Assets for conservation” is opened.

Conservation involves a number of expenses. For example, transportation costs. They belong to non-operating expenses, since they do not take part in production.

The process of completing conservation

It is important not only to correctly enter an item into conservation, but also to remove it from conservation.

Re-preservation is carried out when a decision is made about the need to operate the facilities or upon expiration of the conservation period. This decision must be formalized using an order to terminate conservation.

After re-opening, depreciation begins to accrue. Accrual begins on the first day of the month following the month of issuing the order to terminate the preservation of the object.

Conservation of fixed assets is carried out when they are temporarily not in use. This procedure is present in the practice of many companies.

Order on conservation of fixed assets

This document is mandatory. The management decision must include the following information:

1. Reasons for temporary non-use of the OS.
2. Preservation period of fixed assets.
3. Positions of responsible employees.

The manager appoints specialists who are responsible for both the immediate conservation and subsequent re-preservation of fixed assets. In addition, persons are identified to ensure their proper storage during temporary downtime.

Additional design

Employees must conduct an inventory and draw up an appropriate act of conservation of fixed assets. This document confirms the fact of the transaction. The order acts as a document certifying the enterprise’s intention to mothball fixed assets. The actual implementation of the procedure cannot be confirmed by this document. The transfer of fixed assets for conservation involves the implementation of a number of activities. These include bringing temporarily unused assets to a state that will ensure their proper storage. When the OS is put back into production, appropriate measures are taken to bring them into a form suitable for use. The legislation does not provide for unified forms of acts. The company has the right to develop them independently.

Depreciation

When removing the OS from the active state for a period of more than 3 months. it is not credited. It will be possible to resume the calculation of depreciation after putting it back into operation. Accounting for the conservation of fixed assets is carried out in accordance with Rules 6/01 and Methodological Instructions. There is no provision for extending the useful life period by more than three months. But in accounting, depreciation can be calculated even after this time. In this regard, after the return of fixed assets to the asset, calculations are carried out in the same way as before their withdrawal.

Termination and resumption of accruals

Many experts have a question: from what time should they suspend and then begin calculating depreciation for fixed assets transferred to conservation for a period of more than 3 months? The company sets the month for termination and resumption of accruals independently. The option that is chosen must be recorded in its accounting policies. The legislation does not establish a specific moment for stopping and resuming payments for funds mothballed for more than 3 months. The accounting policy should record one of the following options:

1. Depreciation charges are suspended from the 1st day of the month when fixed assets were mothballed. The calculation should be resumed from the first day of the period in which the OS was put back into production.
2. Accrual stops on the 1st day of the month following the month during which the fixed assets were mothballed. The calculation is resumed from the first day of the period that follows the period during which the OS was put into production.

In the accounting policy, it is advisable to establish the same procedure for suspending and resuming depreciation charges for fixed assets mothballed for a period of more than 3 months, as in tax accounting. This will avoid the occurrence of temporary differences. They may lead to the formation of deferred tax liabilities.

Fixed assets: conservation (1C)

To reflect the operation in the program, the document “Change in the status of fixed assets” is entered. It is designed to stop or resume depreciation. Next, you need to select “Event” - “Preservation” from the OS operations directory. Type of procedure "Depreciation calculation". A check mark is placed in the “Affects on calculation” column. The "Calculate depreciation" field remains unchecked. When depreserving, the document “Change in the state of the main equipment” is entered. Next, select "Event". It will be “Removal from preservation” with the view “Accrual of depreciation”. In the “Affects on accrual” column, you need to check the box. The "Accrue depreciation" field is also checked.

Reporting

The enterprise is obliged to record operating systems according to the degree of their use:

• in operation;
• in reserve (stock);
• in temporary non-use and so on.

This rule is established in Guidelines No. 91n. You can record the state of the OS in accordance with their use with or without reflection on the account. 01 (03). If conservation of fixed assets is carried out for a period of more than 3 months, it is advisable to show them in a separate sub-account. When releasing the OS back into production, the following should be reflected:

Db 01 (03), subaccount. "OS in operation"

Kt 01 (03), subaccount. "OS on conservation"

Reactivated.

In the process of carrying out these procedures with assets, costs may arise. For example, these could be material costs for packaging, installation/dismantling of equipment, and so on. If such costs appear when the disposal and conservation of fixed assets is carried out, the postings will be as follows:

Db 91-2 Kt 10 (23, 68, 60, 69...)

The costs of depreservation, conservation and storage of OS are included.

BASIC: taxation of profits

Tax treatment of expenses will depend on the purpose of the property being conserved. If operating systems are used in the non-production sector, then costs are not taken into account. This is due to the fact that these expenses will not be justified in an economic sense; they do not relate to the company’s income-generating activities. If fixed assets under conservation are used in production, then the costs will reduce the profit tax base. The costs of putting fixed assets into temporary non-use are included in non-operating expenses.

Accrual methods

When calculating, the tax base is reduced in the period to which non-operating expenses relate. Expenses for restoration and conservation are reflected in the time period in which the corresponding act was signed. It is during this period that costs are considered economically justified. Expenses for the maintenance of temporarily unused operating systems are reflected in the period of time in which they were incurred. For example, lubricants are accounted for when documents have been signed to prove their use. If the company uses the cash method, then, in addition to the above requirements, it is necessary that the costs be paid.

Other costs

The question often arises whether it is possible to include utility bills, lighting and security costs for a building under conservation in the calculation of income tax. Yes, these expenses are included in non-operating expenses. This provision is present in Art. 265, clause 1, sub. 9 NK. The enterprise, therefore, has the right to reflect in tax reporting the costs aimed at preserving mothballed OS in proper condition. At the same time, according to Art. 252, paragraph 1 of the Tax Code, it is necessary to have documentary evidence and economic justification for these expenses. The costs that entail the conservation of fixed assets aimed at servicing farms and production should be reflected separately.

VAT at OSNO

The procedure for conservation of fixed assets does not provide for the restoration of value added tax from their residual price. But while the OS is in an unused state or when it is returned to an asset, the enterprise may have an obligation to charge VAT. The tax should be restored in cases where:

1. The OS is transferred to the authorized capital of another company.
2. The company switches from OSNO to UTII or simplified tax system.
3. The use of VAT exemption has begun.
4. After reactivation, the fixed asset is used to perform operations that are not subject to this tax.

These requirements are established in Art. 170, paragraph 3 of the Tax Code.

Important point

Some experts are interested in whether it is allowed to deduct VAT on the cost of services/work/materials that were purchased for conservation/re-preservation and maintenance of unused fixed assets. This procedure is permitted if the company subsequently uses OS in processes subject to the above tax. This is due to the fact that conservation of fixed assets acts as the best option to ensure the safety of assets. In this regard, the deduction of tax on the cost of auxiliary materials/services/work will depend on the purpose of the OS after putting it back into use. If, after reactivation, the company intends to use funds in processes subject to VAT, then the expenses that will arise during the transfer to conservation will be associated with activities that also provide for this accrual. In such cases, the amount is deducted according to the usual rules.

In other words, accrual is carried out after the specified services/work/materials are accepted for accounting in the presence of a document (invoice). This provision is established in Art. 172, paragraph 1 of the Tax Code. If the fixed assets will be used in tax-free operations, then input VAT is included in the cost of the auxiliary equipment required for their conservation. At the same time, there is another point of view on this issue. One of the main conditions for applying the deduction is the use of work/materials/services to perform operations subject to VAT. This requirement is present in Art. 171, paragraph 2 of the Tax Code.

Since conservation of fixed assets does not provide for their use in activities that are subject to VAT, there is no reason for the company to use the deduction. In addition, the process itself represents certain operations performed for the company’s own needs. Costs that arise as a result of conservation reduce taxable income as non-operating expenses. This provision is present in Art. 265, clause 1, sub. 9. The execution of these works is not subject to VAT in accordance with Art. 146, clause 1, sub. 2. In this regard, the organization in this case has no right to a deduction.

Transport and property tax

While fixed assets are under conservation, they do not cease to be taxed:

1. Transport tax. This requirement is established by Article 358 of the Tax Code.
2. Property tax. This provision is contained in Art. 375 NK. An exception is property that has been registered as a fixed asset since January 1, 2013.

simplified tax system

The tax base of a company that is on a simplified system, paying a single tax on income, is not reduced by the costs of preserving fixed assets. With the simplified tax system, no costs are included in the calculation. This provision is fixed in Art. 346.18, paragraph 1 of the Tax Code. For enterprises using a simplified system and paying a single tax based on the difference between expenses and income, costs associated with conservation reduce the base if they are included in the list of Article 346.16 of the Tax Code. For example, these could be:

• Materials (packaging, lubricants, etc.) necessary for maintaining the OS.
• Salaries of conservation staff.

The tax base decreases as costs are incurred and paid.

Other expenses

Do the simplified taxation system take into account the costs of acquiring operating systems that are mothballed for a period of more than three months? No, they are not included in the calculations. The tax base when using the “simplified tax” can be reduced by the costs of purchasing fixed assets recognized as depreciable property in accordance with Chapter. 25 NK. In particular, this provision is provided for in Art. 346.16. Accounting for fixed assets involves excluding temporarily unused fixed assets from depreciable property.

UTII

Under such a system, imputed income is subject to taxation. In this regard, expenses related to the conservation of fixed assets do not affect the calculation of the base. If an enterprise combines UTII and OSNO, then the calculation will depend on the purpose of the OS. If they are used exclusively when carrying out activities on the general system, then accounting for fixed assets, as well as the costs of removing them from assets for temporary non-use, is carried out according to the rules in force for this taxation regime. This provision is established in Art. 346.26 and art. 274 NK. If OS are used only for transactions on UTII, then no expenses are taken into account in the single tax base, since the object of taxation is imputed income. This requirement is fixed in Art. 346.29 Tax Code. If the OS is used for activities carried out on both systems, then input VAT and conservation costs should be distributed.

Example

By order of the head of JSC Firma, in July the production line was mothballed for 4 months. Its initial cost is 780 thousand rubles. The company uses the straight-line method when calculating depreciation, pays quarterly income tax and uses the accrual method. The company does not carry out transactions that are not subject to VAT. In July, conservation costs were:

1. Material costs - 500 rub. (packaging and lubricants).
2. Salary of specialists - 1000 rubles. (including insurance premiums).

The line was re-opened in November. The costs of the work consisted of the salaries of the specialists who carried out the conservation (including insurance premiums). From August to November, the accounting department did not accrue depreciation of the temporarily unused production line according to tax and accounting reporting. The calculation was resumed in December. Both before and after conservation, the monthly depreciation amount was 13 thousand rubles. The following entries were made in the documentation:

In July:

Debit 01 subaccount. "OS on conservation"

Credit 01 subaccount. "OS in operation"

780 thousand rubles. - the production line was mothballed.

Debit 91-2 Credit 10 (69, 70)

1500 rub. (500+1000) - costs of conservation work are taken into account.

Debit 25 Credit 02

13 thousand rubles. - depreciation has been calculated.

In November:

Debit 01 subaccount. "Fixed assets in operation"

Credit 01 subaccount. "OS on conservation"

780 thousand rubles. - reactivation of the production line.

Debit 91-2 Credit 70 (69)

1000 rub. - included the costs of performing depreservation work.

December:

Debit 25 Credit 01

13 thousand rubles. - calculation of depreciation on the production line.

VAT (input) on the cost of materials that were used to carry out conservation work was accepted by the accounting department for deduction. The residual value of the production line, which was temporarily unused, was included in the property tax calculation. The tax base for profits was reduced by the amount of expenses incurred during the work on conservation and re-preservation of the production line:

1. 1500 rub. (500+1000) were included in the calculations when preparing the income tax return for 9 months. the current reporting year.
2. 1000 rub. were taken into account when preparing reporting documents for mandatory deductions from profits for the year.

Conclusion

Thus, conservation of fixed assets is a documented process of transferring fixed assets to a state of non-use. Preparation of reporting documentation and tax calculations depend on the system the company uses. As a rule, when calculating the base and determining depreciation amounts, no special problems arise.

Scheme for recording the receipt of fixed assets