Reconstruction of the building in accounting. Accounting building renovation
Modernization of fixed assets - accounting and tax accounting it is relevant for organizations operating their own fixed assets. The cost of modernization can be significant, which is why it is important to correctly reflect them in the accounting.
Repair, reconstruction and modernization of fixed assets
During operation, organizations have to bear the costs of ensuring the functioning of fixed assets. The ways in which these costs are reflected in accounting depend on their essence, therefore it is important to define such concepts as modernization, reconstruction and repair:
- According to paragraph 2 of Art. 257 of the Tax Code of the Russian Federation, modernization refers to work as a result of which there is a change in the technological or service purpose of the fixed asset, as well as its capacity, performance, or new qualities appear.
- Reconstruction is the reorganization of the OS, which improves the results of its work, allows you to increase the variety of products manufactured, to increase its quality or quantity. Also, the Tax Code of the Russian Federation uses the concept of "technical re-equipment", which is associated with the use of the latest technologies and automation of production.
NOTE! These two concepts are united by the fact that as a result, the main asset acquires improved performance or new functions.
- During the repair, the technical and economic indicators do not improve, but remain the same. Its essence boils down to the elimination of malfunctions or replacement of worn out parts.
Upon completion of the work, the costs are included in the cost of fixed assets or accounted for separately on account 01 "Fixed assets" subaccount "Modernization of fixed assets".
The modernization of the fixed asset in the transactions is reflected as follows:
- Dt 08 Kt 10, 60, 69, 70, 76 - costs for modernization are collected;
- Dt 01 Kt 08 - this posting when upgrading a fixed asset indicates an increase in its original cost.
It is also important for organizations with a large number of assets to pay attention to analytical accounting.
To break down the available investments in non-current assets by type on account 08, a separate sub-account "Costs for modernization" is opened for the upgraded fixed assets. It is convenient to create a separate sub-account on account 01, where only objects that are in the modernization stage will be listed, for example, "Fixed assets for modernization".
When transferring fixed assets for modernization, the posting on their internal movement will be as follows:
Дт 01 subaccount "Fixed assets for modernization" Кт 01 subaccount "Fixed assets in operation".
Depreciation accounting for modernization
According to clause 23 of PBU 6/01, if the restoration period of the object exceeds 12 months, the accrual of depreciation is suspended. The RF Tax Code supports the same approach (Clause 3, Article 256 of the RF Tax Code).
Outcomes
Important points in considering the modernization of the operating system are the separation of the concepts of "repair" and "modernization", the organization of convenient analytical accounting. It is also necessary to take into account the differences in accounting and tax accounting for the modernization of fixed assets, which will require the accountant to take actions to ensure that temporary differences are correctly reflected.
Read more about all the nuances of accounting for fixed assets in this.
An entrepreneur on the simplified tax system, an object of income minus expenses, is carrying out the reconstruction of a building used in business. As a result of the reconstruction, the characteristics of the OS object (height, number of storeys, area, etc.) change. Question: 1. Ownership is subject to state registration. What about the ownership of the building before renovation? Is it being re-registered? 2. How to take into account the costs of building reconstruction: an increase in the initial cost of fixed assets as services are rendered and paid, the purchase of goods and materials, etc .; capitalization of costs per account. 08 "Capital investments" before putting the building into operation and documentary confirmation of the fact of transfer of documents for registration of property rights; reflected in the Book of Income and Expenses.
Answer
Tax accounting
The expenses for the reconstruction of fixed assets made during the period of application of the simplified tax system are taken into account during the tax period from the moment all the necessary conditions are met: the reconstruction was paid, the completed part of the building was put into operation and documents for state registration were submitted.
According to sub. 4 p. 2 art. 346.17 of the Tax Code of the Russian Federation, expenses for the reconstruction of fixed assets are reflected in the last day of the reporting (tax) period in the amount of the amounts paid. In this case, these expenses are taken into account only for fixed assets used in the implementation of entrepreneurial activities.
To reflect the expenses for the acquisition (construction, manufacture) of fixed assets, completion, reconstruction, taken into account when calculating the tax base for tax for the reporting (tax) period in the book of income and expenses under the simplified tax system, section is provided. II.
Expenses for the acquisition (construction, manufacturing) of fixed assets, completion, additional equipment, reconstruction, modernization and technical re-equipment of fixed assets are reflected in the section by positional method separately for each object.
In tax accounting, the cost of building renovation is an independent type of expense. They have nothing to do with the previously accounted acquisition costs.
The company on the simplified tax system may face the need to renovate the building. At the same time, the procedure for accounting for expenses on it for tax purposes has some nuances.
Reconstruction or renovation?
For the correct inclusion of costs in the calculation of the "simplified" tax, it is important to determine what was done with the building - reconstruction or repair. There is no clear definition of building renovation in the Tax Code. He points out that reconstruction is the reorganization of existing objects of fixed assets (OS) associated with the improvement of production, an increase in its technical and economic indicators. Such actions are performed according to the project in order to increase production capacity, improve quality and change the product range 1. The financial department believes that for tax purposes, it is this definition that should be guided, and for a more detailed specification of the concept, it is necessary to contact the Ministry of Regional Development of Russia 2. We will turn to the City Planning Code.
From doc
Urban Planning Code of the Russian Federation Article 1
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14) reconstruction of capital construction facilities (except for linear facilities) - changing the parameters of a capital construction facility, its parts (height, number of floors, area, volume), including superstructure, reconstruction, expansion of a capital construction facility, as well as replacement and (or ) restoration of load-bearing building structures of a capital construction object, with the exception of replacing individual elements of such structures with similar or other elements that improve the performance of such structures and (or) restoration of these elements;<...>
As a rule, capital construction objects are reconstructed on the basis of a special permit 3. Upon completion of the work, the documents are submitted for state registration of rights to the real estate object 4.
There is no definition of repair in the Tax Code. Based on the explanations of officials, the repair is the maintenance of the OS in working order or the restoration of the original operational qualities of objects 5.
Thus, renovation and renovation are two different types of work. Consequently, the procedure for reflecting expenses on them in tax accounting is also different.
We reflect in tax accounting
In tax accounting, the expenses for the renovation of fixed assets are an independent type of expense that is in no way related to the previously recorded costs of acquiring these objects 6. To include the costs of reconstruction in the calculation of the "simplified" tax, the following conditions must be met:
- the object was put into operation 7;
- OS are used in business 8;
- reconstruction costs paid 9;
- the fact of submission of documents for state registration of fixed assets, the rights to which are subject to such registration, have been documented 10.
Expenses for the reconstruction of the building for the reporting periods (quarter, six months and nine months) are taken into account in equal shares during the tax period (year) 11. At the same time, the Ministry of Finance of Russia clarifies that the costs of reconstruction should be taken into account evenly as payment is made during the tax period when the work is completed and the reconstructed facility is put into operation 12.
We also note that the costs of acquiring fixed assets are reflected in the last day of the reporting (tax) period in the amount of the amounts paid 13. Therefore, in the case of installment payments, the company's expenses for the reconstruction of the property can be recognized for the purpose of calculating the “simplified” tax over several tax periods. That is, the "simplified" does not need to wait until the object is fully paid 14.
We fill in the book of accounting of income and expenses
The expenses for the reconstruction of the building are reflected in section II of the book of income and expenses 15. Let's look at an example.
Example
LLC "Aktiv" reconstructed its office building by a third party. Wherein:
- the building was acquired during the period of application of the simplified tax system;
- start of reconstruction - 02/01/2013;
- the amount of expenses for reconstruction - 600,000 rubles;
- payment of reconstruction costs - 20.05.2013;
- the beginning of the use of the reconstructed building - 01.07.2013;
documents for state registration of rights to the real estate object were submitted on 01.07.2013.
Column 1 indicates the sequence number of the operation 16.
In column 2, enter the name of the OS in accordance with the technical passport, inventory cards and other documents 17. To avoid confusion, we advise you to indicate that we are talking about the reconstruction of the object.
Column 3 records the date of payment of the costs of reconstruction 18.
Column 4 indicates the date of submission of documents for state registration of rights to the property 19. Confirmation of receipt of documents for state registration is the corresponding receipt 20.
Column 5 reflects the date of commissioning of the facility after its reconstruction 21.
Column 6 is filled in according to the OS acquired (created) when using the simplified tax system. Shown here are the expenses for the reconstruction of the object. They are reflected in the reporting (tax) period in which one of the following events occurred last 22:
- putting the facility into operation;
- submission of documents for state registration of rights to an object;
- payment (completion of payment) of expenses for the reconstruction of the object.
Column 7 indicates the useful life of the OS. For objects acquired (created) and put into operation (accepted for accounting) during the period of application of the “simplified”, this column is not filled in 23. Recall that the company has the right, after reconstruction, to increase the useful life of the object (within the terms established for this depreciation group) 24.
Column 8 is filled in according to the OS acquired (created) before the transition to the simplified tax system 25. Expenses are reflected in the same order as in column 6 of this section.
Column 9 indicate the number of quarters of operation of the facility in the tax period 26.
Column 10 reflects the share of the cost of fixed assets, taken as expenses for the tax period 27. During reconstruction it is 100% 28.
Column 11 shows the share of the cost of the object taken into expenses in each quarter (column 10: column 9). The value of this indicator is rounded to the second decimal place 29.
Column 12 reflects the amount of expenses for the reconstruction of fixed assets, included in the composition of the recorded expenses for each quarter of the tax period 30:
- for objects purchased (created) and put into operation when using the simplified tax system - (column 6 x column 11): 100;
- for objects acquired (created) before the transition to the simplified tax system - (column 8 x column 11): 100.
The amount of expenses related to each quarter is also reflected in the last number of the reporting (tax) period in column 5 of section I of the book of income and expenses.
Column 13 shows the amount of the considered reconstruction costs for the entire tax period 31.
Columns 14 and 15 in this case are not filled in, since the indicated expenses are taken into account in full during the tax period 32.
Footnotes:
1 p. 4 art. 346.16, para. 3 p. 2 art. 257 of the Tax Code of the Russian Federation
2nd letter of the Ministry of Finance of Russia dated February 15, 2012 No. 03-03-06 / 1/87
3 p. 2 art. 51 Civil Code of the Russian Federation
4 tbsp. 131 of the Civil Code of the Russian Federation; Federal Law of 21.07.1997 No. 122-FZ
5 letters of the Ministry of Finance of Russia dated 13.12.2010 No. 03-03-06 / 1/772, dated 14.10.2010 No. 03-03-06 / 1/647
6 sub. 1 p. 1 of Art. 346.16 of the Tax Code of the Russian Federation
7 sub. 1 p. 3 art. 346.16 of the Tax Code of the Russian Federation
8, 9, 13 sub. 4 p. 2 art. 346.17 of the Tax Code of the Russian Federation
10 paragraph 12 p. 3 art. 346.16 of the Tax Code of the Russian Federation
11 para. 8 p. 3 art. 346.16, art. 346.19 of the Tax Code of the Russian Federation
12 letters of the Ministry of Finance of Russia dated 20.04.2010 No. 03-11-06 / 2/62, dated 28.01.2008 No. 03-11-04 / 2/14, dated 20.08.2007 No. 03-11-04 / 2/205
14 letters of the Ministry of Finance of Russia dated 03.04.2012 No. 03-11-11 / 115, dated 12.01.2010 No. 03-11-06 / 2/01
15 approved by order of the Ministry of Finance of Russia dated October 22, 2012 No. 135n
16 clause 3.5 of the Procedure for filling in the book of accounting for income and expenses, approved. by order of the Ministry of Finance of Russia dated October 22, 2012 No. 135n (hereinafter referred to as the Procedure)
17 p. 3.6 of the Procedure
18 p. 3.7 of the Procedure
19 p. 3.8 of the Procedure
20 p. 6 art. 16 of the Federal Law of 21.07.1997 No. 122-FZ; Appendix 1 to the order of the Ministry of Justice of Russia dated 01.07.2002 No. 184
21 p. 3.9 of the Procedure
22 para. 4 p. 3.10 of the Procedure
23 p. 3.11 of the Procedure
24 paragraph 2 p. 1 of Art. 258 of the Tax Code of the Russian Federation
25 p. 3.12 of the Procedure
26 p. 3.13 of the Procedure
27 p. 3.14 of the Procedure
28, 32 sub. 1 p. 3, para. 8 p. 3 art. 346.16 of the Tax Code of the Russian Federation
29 p. 3.15 of the Procedure
30 p. 3.16 of the Procedure
31 p. 3.17 of the Procedure
A. Vagapova, JSC "Gorislavtsev and K. Audit"
Often, when acquiring a building, an organization is forced to carry out a whole range of repair and construction work in it in order to bring it to a state suitable for use. Questions arise whether this work is a major overhaul or reconstruction and how to account for the corresponding costs.
The definition of reconstruction is given in the letter of the USSR Ministry of Finance dated May 29, 1984, No. 80 "On the definition of the concepts of new construction, expansion, reconstruction and technical re-equipment of existing enterprises", as well as in clause 8.4 of the Instructions for filling out forms of federal state statistical observation on capital construction, approved by the decree of the Goskomstat of Russia dated 3.10.96, No. 123. In accordance with these documents, reconstruction includes the reorganization of existing workshops and objects of main, auxiliary and service purposes, as a rule, without expanding existing buildings and structures of the main purpose, associated with the improvement of production and increasing its technical and economic level based on the achievements of scientific and technological progress and carried out under a comprehensive project for the reconstruction of the enterprise as a whole in order to increase production capacity, improve quality and change the product range, mainly without increasing the number workers while improving their working conditions and environmental protection.
During the reconstruction of operating enterprises, the following can be carried out:
- expansion of individual buildings and structures for the main, auxiliary and service purposes in cases when new high-performance and more advanced equipment in terms of technical indicators cannot be placed in existing buildings;
- construction of new and expansion of existing workshops and auxiliary and service facilities in order to eliminate imbalances;
- construction of new buildings and structures for the same purpose instead of those liquidated on the territory of the existing enterprise, the further operation of which, due to technical and economic conditions, was recognized as inexpedient.
Thus, during the reconstruction, the technical and economic indicators of the fixed asset (hereinafter referred to as OS) are improved. With a major overhaul of the OS, the technical and economic indicators do not improve, but are restored. For example, the installation or transfer of intercabinet partitions does not change the office purpose of the premises and its technical and economic indicators. Therefore, such work must be qualified as repairs.
If the costs of reconstruction have led to an improvement in the originally adopted normative indicators of the functioning of a fixed asset, then they are attributed to an increase in its initial cost (clause 27 of PBU 6/01). The costs of the renovation of the fixed assets facility are accounted for on the account for accounting for investments in non-current assets (paragraphs 40 and 42 of the Methodological Instructions for the Accounting of Fixed Assets, approved by order of the Ministry of Finance of Russia dated October 13, 2003, No. 91n, hereinafter referred to as the Methodological Instructions). Upon completion of the renovation of the fixed asset, the costs recorded on the account of investments in non-current assets either increase the initial value of this object and are written off to the debit of the fixed asset account, or are accounted for on the fixed asset account separately, in which case a separate inventory card is opened for the amount of the costs ...
If, based on the results of the reconstruction of a fixed asset object, a decision is made to increase its initial cost, then the data in the inventory card of this object is corrected. If the reflection of adjustments in the specified inventory card is difficult, then a new inventory card is opened instead (with the preservation of the previously assigned inventory number) reflecting new indicators characterizing the reconstructed object.
In accordance with clause 60 of the Methodological Guidelines, in cases of improvement (increase) of the originally adopted standard indicators of the functioning of an OS facility as a result of completion, additional equipment, reconstruction or modernization, the organization revises the useful life of this facility.
Upon completion of the reconstruction, it is necessary to draw up an act of acceptance and delivery of the repaired, reconstructed, modernized fixed assets according to the form No. OS-3, approved by the Resolution of the State Statistics Committee of Russia dated 21.01.03, No. 7.
Let's refer to the Tax Code of the Russian Federation. According to paragraph 2 of Art. 257 of the Tax Code of the Russian Federation, reconstruction refers to the reorganization of existing fixed assets, associated with the improvement of production and an increase in its technical and economic indicators and carried out under the project for the reconstruction of fixed assets in order to increase production capacity, improve the quality and change the product range. For tax accounting purposes, renovation costs are included in the initial cost of the asset. After the reconstruction, it is possible to increase the useful life of the OS, if such an increase has occurred (clause 1 of article 258 of the Tax Code of the Russian Federation). True, it can be increased only within the depreciation group in which such an asset was previously included.
As practice shows, it can be quite difficult to separate reconstruction from repair. Let's consider examples of arbitral awards on this issue.
The decree of the Federal Antimonopoly Service of the Volgo-Vyatka District dated September 17, 2002, No. A11-1806 / 2002-K2-E-871, states that the equipment of a separate entrance is not a reconstruction, even though the contract specifies these works as reconstruction. The arbitrators explained their decision by the fact that as a result of these works, there was no change in the main technical and economic indicators of the object.
In the decree of the Federal Antimonopoly Service of the Moscow District dated 01.16.03, No. KA-A40 / 8739-02, it was determined that as a result of the replacement of the floor covering and window blocks, the installation of the suspended ceiling, the painting of the premises, the wallpapering of the walls and the installation of plasterboard partitions, there was no improvement earlier the accepted standard indicators of the functioning of the building (useful life, etc.) and changes in its technical and economic indicators (quality and area of \u200b\u200bpremises, capacity, etc.). Taking this into account, the court concluded that such work is of a repair nature, the costs of which should be included in other expenses.
The resolution of the Federal Antimonopoly Service of the North-Western District of 1.11.04, No. A56-20543 / 04, established that, since the tax inspection did not provide evidence that the external and internal decoration of gas stations, a shed, a storage tank for oil products and on-site work increased and improved the indicators of the object changed its quality characteristics, these works were of a repair nature.
After the reconstruction, it is necessary to enter in the state register information about the changes made during the reconstruction of the real estate object. This is provided for by clause 67 of the Rules for maintaining the Unified State Register of Rights to Real Estate and Transactions with It, approved by Decree of the Government of the Russian Federation of 18.02.98, No. 219. Such changes, in particular, include a decrease or increase in the area of \u200b\u200ban object, an increase in the number of storeys , erection of extensions to buildings or partial or complete dismantling of existing ones, improvement of the architectural expressiveness of buildings, reconstruction of engineering networks, etc. The list of changes is open. But this does not mean that the object should be registered again. In the register, only an entry is made about the change in its characteristics. Therefore, during the reconstruction of a real estate object, information should be entered only if there has been a change in those indicators that were originally indicated during registration.
Submission of documents for state registration is confirmed by a receipt in receipt of documents for state registration of rights with their list, as well as indicating the date of their submission. For tax accounting purposes, if it is necessary to register ownership, the costs of reconstruction can be included in the cost of the premises only after the organization submits documents for state registration (clause 8 of article 258 of the Tax Code of the Russian Federation).
Having carried out the reconstruction of the fixed asset, the company is faced with the problem of recalculating depreciation deductions. The procedure for calculating depreciation deductions for a reconstructed facility is specified in clause 60 of the Methodological Instructions: the annual amount of depreciation deductions is determined from the calculation of the residual value, taking into account the reconstruction and the new useful life (if it has changed). This is also stated in the letter of the Ministry of Finance of Russia dated 23.06.04, No. 07-02-14 / 144. The Tax Code of the Russian Federation does not provide for a special procedure for calculating depreciation deductions after reconstruction. Therefore, you should be guided by the usual procedure, i.e. proceed from the initial cost and useful life of the OS.
Example 1.The organization in March 2004 acquired a fixed asset (warehouse) with an initial cost of 600,000 rubles. The useful life is 6 years. The depreciation method is linear. A year later (in February 2005), the warehouse was reconstructed in the amount of 150,000 rubles. The useful life of the object has not changed.If the reconstruction period of the object exceeds 12 months, then starting from the 1st day of the month following the month in which the reconstruction was started, depreciation is not charged (clause 23 of PBU 6/01 and clause 2 of article 322 of the Tax Code of the Russian Federation). Upon completion of the reconstruction, depreciation is charged starting from the 1st day of the next month.The procedure for calculating depreciation is as follows.
For accounting purposes:
before reconstruction: 600,000: 6 \u003d 100,000 rubles. per year, or 8333 rubles. per month;
after reconstruction: (600,000 - 100,000 + 150,000): 5 \u003d 130,000 rubles. per year, or 10 833 rubles. per month.
For tax accounting purposes:
before reconstruction: annual depreciation rate - 100%: 6 years \u003d 16.67%, which corresponds to 100,020 rubles. per year (600,000 x 16.67: 100), or 8335 rubles. per month;
after reconstruction, the annual depreciation rate is 100%: 6 years \u003d 16.67%, which corresponds to 125,025 rubles. per year [(600,000 + 150,000) x 16.67: 100], or 10,419 rubles. per month.
Since the useful life has not changed after the reconstruction, depreciation is charged in the same manner (at the same rate), but based on the new initial (replacement) cost (letter of the Federal Tax Service of Russia dated March 14, 2005, No. 02-1-07 / 23).
For March 2004:
Debit 08, Credit 60 - 600,000 rubles. - purchased an item of fixed assets,
Debit 01, Credit 08 - 600,000 rubles. - the warehouse was put into operation.
For April-December 2004:
Debit 20, 25, ..., Credit 02 - 8333 rubles. - depreciation has been charged for the warehouse.
For April 2004 - February 2005:
Debit 68, Credit 77 - 0.48 rubles. - [(8333 - 8335) x 24%] - IT is charged with depreciation.
For February 2005:
Debit 08, Credit 60 - 150,000 rubles. - the warehouse was reconstructed.
Debit 01, Credit 08 - 150,000 rubles. - the cost of reconstruction is attributed to the increase in the initial cost of the object of fixed assets.
For March 2005, etc .:
Debit 20, 25, ..., Credit 02 - 10 833 rubles. - depreciation has been charged for the warehouse.
Debit 09, Credit 68 - 99.36 rubles. [(10 833 - 10 419) x 24%] - SHE was charged with depreciation.
Example 2. Suppose that under the conditions of example 1, the useful life of the warehouse after reconstruction has increased by one year.
Depreciation calculation after reconstruction:
for accounting purposes: (600,000 - 100,000 + 150,000): (5 + 1) \u003d 108,333 rubles. per year, or 9028 rubles. per month;
for tax accounting purposes: the annual depreciation rate is 100%: (6 + 1) years \u003d 14.29%, which corresponds to 107,175 rubles. per year [(600,000 + 150,000) x 14.29: 100], or 8931 rubles. per month.
Since the useful life has increased after the reconstruction, depreciation is recalculated, but based on the new original (replacement) cost and the new useful life.
The following entries are made in accounting:
For March 2004 - February 2005:
similar to example 1.
For March 2005, etc .:
Debit 20, 25, ..., Credit 02 - 9028 rubles. - depreciation has been charged for the warehouse,
Debit 09, Credit 68 - 23.28 rubles. [(9028 - 8931) x 24%] - SHE was charged with depreciation.
Reconstruction of fixed assets can be carried out both by contract and by economic means. If the reconstruction of a building or structure was carried out in an economic way, then in accordance with paragraphs. 3 p. 1 art. 146 of the Tax Code of the Russian Federation on the cost of all work, calculations from all actual costs, for reconstruction, VAT should be charged at the time of completion of the reconstruction (clause 2 of article 159 and clause 10 of article 167 of the Tax Code of the Russian Federation). At the same time, according to the explanations of the Ministry of Finance of Russia, taxpayers should adhere to the position set forth in clause 47 of the Methodological Recommendations on the Application of Chapter 21 "Value Added Tax" of the Tax Code of the Russian Federation, approved by order of the Ministry of Taxes and Levies of Russia dated 20.12.2000 No. BG-3-03 / 447: for VAT purposes, the date of construction and installation work must be determined taking into account the provisions of the second paragraph of clause 2 of Art. 259 of the Tax Code of the Russian Federation. Thus, VAT accrual to the budget for work carried out in an economic way is made in the month following the month when the fixed asset was put into operation.
From January 1, 2006, in accordance with paragraph 16 of Art. 1 of the Federal Law of 22.07.05, No. 119-FZ in paragraph 10 of Art. 167 of the Tax Code of the Russian Federation, amendments were made, according to which the moment of determining the tax base when performing construction and installation work for own consumption is the last day of the month of each tax period.
VAT on materials spent on the reconstruction carried out both by economic means and by the forces of third-party organizations, on the basis of clause 5 of Art. 172 of the Tax Code of the Russian Federation can be presented for deduction in the month following the month when this object was put into operation for tax accounting purposes. From January 1, 2006, deductions will be made after the registration of these materials.
Example 3.In January 2005, the organization reconstructed the premises on its own. The total cost was RUB 350,000, including:In practice, the question often arises of how to take into account the costs of reconstruction of objects. Specialists of the Ministry of Finance of Russia believe that if the amount of expenses for reconstruction is less than 10,000 rubles, they are written off as expenses at a time. If the cost of reconstruction has exceeded 10,000 rubles, then the property must be recognized as depreciable and its useful life must be set in accordance with the OS classifier and depreciation must be charged. Moreover, the useful life must be established within the depreciation group (clause 2 of article 257 of the Tax Code of the Russian Federation). For example, if the useful life of a depreciated building is 8 years (5th group), then after reconstruction the useful life must be established by subtracting from the maximum life (10 years) the term of the object's actual operation (8 years), i.e. 10 - 8 \u003d 2 years.materials - 230,000 rubles. (capitalized and paid in 2004), VAT - 41,400 rubles;
depreciation - 45,000 rubles;
salary - 50,000 rubles;
Unified social tax - 25,000 rubles.
The act of completion of the reconstruction in the form No. OS-3 was drawn up in February 2005. In the same month, documents were submitted for state registration of the changes made.
The following entries are made in accounting.
For January 2005:
Debit 08, Credit 10 - 230,000 rubles. - materials written off for reconstruction,
Debit 08, Credit 70 - 50,000 rubles. - accrued wages,
Debit 08, Credit 69 - 25,000 rubles. - unified social tax accrued,
Debit 08, Credit 02 - 45,000 rubles. - depreciation has been charged.
For February 2005:
Debit 01, Credit 08 - 350,000 rubles. - reconstruction is attributed to an increase in the cost of the premises.
For March 2005:
Debit 19, Credit 68 - 21 600 rubles. - VAT charged on the cost of work performed,
Debit 68, Credit 19 - 41 400 rubles. - accepted for offsetting VAT on materials.
For April 2005:
Debit 68, Credit 19 - 21 600 rubles. - accepted for offsetting VAT on work performed.
If the object has worked out its maximum life, then it is proposed to form a new fixed asset object and set its useful life in accordance with the Classification of fixed assets approved by the Government of the Russian Federation (letter of the Ministry of Finance of Russia dated 4.08.03, No. 04-02-05 / 3/65 ). This is due to the fact that in accordance with paragraph 1 of Art. 258 of the Tax Code of the Russian Federation, an organization is not entitled to increase the useful life in tax accounting.
As for the reconstruction of leased fixed assets, in accordance with Art. 623 of the Civil Code of the Russian Federation, the lessee can make improvements to the leased property during the lease term. They represent capital investments in the leased property that improve the quality characteristics of the leased property. It is customary to distinguish between separable and inseparable improvements in rented property. Improvements that are inseparable from an object without harming it are inseparable. They are inextricably linked with the leased asset, therefore, after the termination of the lease agreement, they are subject to transfer to the lessor along with the leased property. Reconstruction of the premises (redevelopment) also belongs to inseparable improvements.
The question of who should be attributed the costs associated with inseparable improvements is decided depending on whether they were carried out with the consent of the lessor or without it. Clause 3 of Art. 623 of the Civil Code of the Russian Federation, it is determined that the cost of inseparable improvements to the leased property made by the tenant without the consent of the lessor is not subject to reimbursement, unless otherwise provided by law. If the lessor has the consent, then after the termination of the lease, the lessee has the right to demand from the lessor reimbursement of the cost of these improvements.
According to clause 5 of PBU 6/01 and clause 3 of the Methodological Guidelines, capital investments in leased fixed assets, if in accordance with the concluded lease agreement, these capital investments are the property of the lessee, are accounted for as part of fixed assets. Only separable improvements of the leased property are the property of the lessee (clause 1 of article 623 of the Civil Code of the Russian Federation).
Until recently, capital investments in leased fixed assets were not recognized as depreciable property for profit tax purposes, i.e. if the lessee made such improvements, then he had no right to amortize them. After amending art. 256 of the Tax Code of the Russian Federation Federal Law of 06.06.05, No. 58-FZ, inseparable improvements to the leased property will be recognized as depreciable property from January 1, 2006 (provided that the improvements were made with the consent of the lessor). Moreover, capital investments, the cost of which is reimbursed to the lessee by the lessor, are amortized by the lessor in the manner prescribed by Chapter 25 of the Tax Code of the Russian Federation. And capital investments made by the lessee with the consent of the lessor, the value of which is not reimbursed by the lessor, are amortized by the lessee during the lease term based on the depreciation amounts calculated taking into account the useful life determined for leased fixed assets in accordance with the Classification of fixed assets approved by the Government Russian Federation.
The restoration of fixed assets, as you know, can be carried out through repair, modernization and reconstruction. Often in relation to objects, work is carried out on completion, retrofitting and partial liquidation. If the costs of repairing objects do not increase their initial value, then the costs of reconstruction and modernization may increase the initial value of fixed assets.
In this article we will tell you how the costs of reconstruction, modernization, partial liquidation, completion and retrofitting.
It should be noted that the accounting legislation, unfortunately, does not disclose the concepts of reconstruction and modernization of fixed assets. But we can find the decoding of these concepts in other branches of Russian legislation.
In a relationship capital construction facilities reconstruction in accordance with Art. 1 of the Urban Planning Code of the Russian Federation of December 29, 2004 N 190-FZ represents a change in the parameters of objects, their parts (height, number of floors, area, indicators of production capacity, volume) and the quality of engineering and technical support.
Article 257 of the Tax Code of the Russian Federation refers to the reconstruction of the reconstruction of existing objects of fixed assets associated with the improvement of production and an increase in its technical and economic indicators and carried out under the project for the reconstruction of fixed assets in order to increase production capacity, improve the quality and change the product range. In particular, the reconstruction of a building is a complex of construction work and organizational and technical measures associated with a change in the main technical and economic indicators of the building, the number and area of \u200b\u200bapartments, and so on or the purpose of the building. During the reconstruction of buildings, full or partial vacations of premises, resettlement of residents, withdrawal of organizations are envisaged.
When defining the term "reconstruction", the Ministry of Finance of Russia in its Letter dated November 23, 2006 N 03-03-04 / 1/794 recommends, in particular, to be guided by:
- Departmental building codes (VSN) N 58-88 (r) "Regulations on the organization and implementation of reconstruction, repair and maintenance of residential buildings, communal and socio-cultural facilities", approved by the Order of the State Committee for Architecture under the USSR State Construction Committee of November 23, 1988 No. N 312;
- Letter of the USSR Ministry of Finance dated May 29, 1984 No. 80 "On the definition of the concepts of new construction, expansion, reconstruction and technical re-equipment of operating enterprises."
The Tax Code includes works caused by changes in the technological or service purpose of equipment, buildings, structures or other object of depreciable fixed assets, increased loads and (or) other qualities to work on completion, retrofitting, modernization (hereinafter referred to as modernization). In other words, modernization is an improvement, improvement, renewal of an object of fixed assets, bringing it in line with new requirements and norms, technical conditions, and quality indicators. Mainly machines, equipment, technological processes are being modernized.
How are the costs of reconstruction and modernization of fixed assets reflected in the organization's accounting? To answer this question, let us refer to 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 (hereinafter - PBU 6/01).
As we said at the beginning of the article, according to clause 26 of PBU 6/01, the restoration of an object of fixed assets can be carried out, in particular, through reconstruction and modernization.
Practice shows that accountants often have questions about how to reflect in the accounting transactions for the reconstruction and modernization of fixed assets.
In general the cost of fixed assets, in which they are accepted for accounting, is not subject to change, which is established by clause 14 PBU 6/01. Meanwhile, there is an exception to this rule, and it concerns cases of completion, additional equipment, reconstruction, modernization, partial liquidation of fixed assets.
According to clause 27 of PBU 6/01, the costs of reconstruction and modernization of an object of fixed assets after their completion increase the initial cost of such an object, if, as a result of modernization and reconstruction, the originally adopted standard performance indicators (useful life, capacity, quality of use, etc.) the like) of an item of fixed assets.
The chart of accounts for accounting of financial and economic activities of organizations and the Instructions for its application, approved by Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n, provides that a change in the initial cost of fixed assets during their completion, retrofitting and reconstruction is reflected in the debit of account 01 "Basic funds "in correspondence with account 08" Investments in non-current assets ". For account 08 "Investments in non-current assets", you can open, for example, subaccount 08-9, which will reflect the costs of reconstruction and modernization that increase the initial cost of fixed assets.
Example
... The organization made a decision to modernize production equipment, as a result of which the accuracy of parts processing will increase. The initial cost of the equipment is 348,000 rubles. When the object was accepted for accounting, the organization established a useful life of 8 years, depreciation was charged on a straight-line basis. At the time of the modernization, the equipment had been in operation for 6 years, the amount of accrued depreciation was 261,000 rubles.
To carry out modernization work, a work contract was concluded with a third-party organization, the cost of work according to the terms of the contract is 59,000 rubles. (including VAT - RUB 9,000). Equipment upgrades are carried out at the expense of the contractor.
These transactions in the accounting of the organization are reflected as follows using accounts:
01 "Fixed assets";
08 "Investments in non-current assets";
19 "Value added tax on acquired material assets";
51 "Settlement accounts";
60 "Settlements with suppliers and contractors".
Debit 08 "Investments in non-current assets" Credit 60 "Settlements with suppliers and contractors"
- 50,000 rubles. - reflects the costs of upgrading equipment;
Debit 19 "Value added tax on acquired material assets" Credit 60 "Settlements with suppliers and contractors"
- 9000 rubles. - the amount of VAT presented by the contractor is reflected;
Debit 68 "Calculations of taxes and fees" Credit 19 "Value added tax on acquired material assets"
- 9000 rubles. - VAT amount accepted for deduction;
Debit 01 "Fixed assets" Credit 08 "Investments in non-current assets"
- 50,000 rubles. - the initial cost of the equipment was increased by the amount of the cost of modernization;
Debit 60 "Settlements with suppliers and contractors" Credit 51 "Settlement accounts"
- 59,000 rubles. - payment for modernization works was made.
As a result of the modernization of the equipment, its initial cost increased by 50,000 rubles. and amounted to 398,000 rubles.
In the article, we have already said that as a result of reconstruction and modernization, not only the initial cost of an object of fixed assets may change, but also its useful life. Taking an item of fixed assets for accounting, the organization, guided by clause 20 of PBU 6/01, determines the period of its useful life. Determination of useful lifeis made on the basis of:
- the expected life of the item in accordance with the expected performance or capacity;
- the expected physical wear and tear, depending on the operating mode (number of shifts), natural conditions and the influence of an aggressive environment, the repair system;
- regulatory and other restrictions on the use of this object (for example, the lease period).
In cases of improvement (increase) of the originally adopted normative indicators of the functioning of an item of fixed assets as a result of reconstruction or modernization, the organization revises the useful life of this item.
It is quite obvious that a change in the initial cost of an item of fixed assets, regardless of whether the useful life of this item is revised, leads to a change in the depreciation rate for this item of fixed assets. PBU 6/01 does not contain provisions on how to calculate depreciation for reconstructed and modernized fixed assets. But explanations on this matter can be found in clause 60 of the Methodological Guidelines for accounting for fixed assets, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 N 91n (hereinafter - Guidelines N 91n), which provides an example of calculating depreciation deductions. It follows from the example that the accrual of depreciation after reconstruction or modernization should be made based on the residual value of the object and the remaining useful life (taking into account their increase).
Example... Using the terms of the previous example, suppose that the entity did not extend the useful life of the upgraded equipment, because the upgrade only resulted in more precise machining of the parts, but did not increase the useful life of the facility.
After the completion of the modernization, the residual value of the equipment, on the basis of which depreciation will be charged in the remaining 2 years of its useful life, will amount to RUB 137,000. (348,000 - (348,000 / 8 years x 6 years) + 50,000). Thus, the monthly depreciation amount will be 5708.33 rubles.
A few words should be said about the reconstruction and modernization of fully depreciated fixed assets. The accounting legislation also does not explain how to reflect in the accounting the costs of restoring such objects, no special rules have been established for such objects. Therefore, it is necessary to apply general rules and calculate the amount of depreciation after reconstruction and modernization of such objects based on the residual value and the remaining useful life.
The residual value of a fully depreciated fixed asset is zero, and the actual useful life has also expired, but as a result of reconstruction and modernization work, the initial value will increase by the amount of expenses incurred. The useful life should also be reviewed in order to take into account the costs of reconstruction and modernization through the amortization mechanism during this period.
Reconstruction and modernization works should be documented, since the basis for accounting are the primary accounting documents, with the help of which the business transactions carried out by the organization are drawn up, as established by the Federal Law of November 21, 1996 N 129-FZ "On Accounting".
Unified primary documents on fixed assets accounting approved by the Resolution of the State Statistics Committee of Russia dated January 21, 2003 N 7 (hereinafter - Resolution N 7) can be used as primary accounting documents. The unified forms are intended for use by legal entities of all forms of ownership operating on the territory of the Russian Federation, as established by clause 2 of Resolution No. 7. An exception was made for credit institutions and budgetary institutions.
For registration and accounting of acceptance and transfer of fixed assets from repair, reconstruction, modernization, Resolution No. 7 approved the Act on the acceptance and delivery of repaired, reconstructed, modernized fixed assets (form No. OS-3).
Reconstruction and modernization works can be performed both by the organization itself and with the involvement of third-party organizations. When performing the reconstruction by the forces of the organization, the Act of Form N OS-3 is drawn up in one copy, signed by members of the acceptance committee or by a person authorized to accept objects of fixed assets, as well as by a representative of the structural unit that carried out the reconstruction or modernization.
If work on reconstruction and modernization is carried out by a third-party organization, then two copies of the act of form N OS-3 are drawn up. The first copy remains in the organization, and the second is transferred to the organization - the executor of the work.
After the approval of the act by the head of the organization or a person authorized by him, the act is submitted to the accounting department, where the data of reconstruction, modernization are entered into the inventory card of the fixed asset object (form N OS-6).
Inventory card (form N OS-6) contains section. 5 "Changes in the initial cost of an item of property, plant and equipment" and sect. 6 "Costs of repairs". In sect. 5 reflects the type of operation (reconstruction, completion, additional equipment, partial liquidation, modernization), a document confirming the operation with an indication of its name, number and date, as well as the amount of costs in rubles.
Clause 40 of Methodical Instructions N 91n determines that if, based on the results of completion, additional equipment, reconstruction and modernization of a fixed asset object, a decision is made to increase the initial cost of the object, the data in the inventory card of the object are adjusted. If the reflection of adjustments in the existing card causes difficulties, then a new card is opened instead of the existing card, which reflects new indicators characterizing the completed, re-equipped, reconstructed or modernized object. The new card retains the inventory number assigned to the object earlier.
And, concluding the article, we will briefly consider the partial liquidation of fixed assets, since it may be the result of reconstruction work, which follows from clause 76 of Methodological Instructions N 91n. According to clauses 77, 78 and 79 of the named Methodical Instructions for the disposal of fixed assets in the organization, by order of the head, a commission is created, which includes the relevant officials, including the chief accountant (accountant) and persons who are responsible for the safety of objects fixed assets. The commission in the act on partial liquidation must indicate the reasons for such liquidation (reconstruction, modernization or other reason).
The Commission also determines the share of the object to be liquidated, calculated as a percentage of its original cost (for example, 25% of the object is subject to liquidation). Taking into account the established share, the initial (residual) value and the accrued depreciation attributable to the liquidated property are calculated.
The decision taken by the commission to write off the object of fixed assets is drawn up in an act for writing off the object of fixed assets with the indication of the data characterizing the object. The write-off act is approved by the head of the organization.