Options for errors requiring a refund and their consequences
In relations between counterparties, errors in the transfer of funds are possible, associated with:
- with the wrong choice of counterparty when generating a payment order;
- indicating an incorrect payment amount;
- reflection in the purpose of payment of the details of a document that does not exist in the relationship.
Such errors can be identified by any of the parties, but will require a mandatory written expression of the initiative of the payer of funds to take actions carried out in connection with their correction.
In a number of situations, the error can be corrected by adjusting the purpose of the payment if, for example, there is a supplier-buyer relationship between the counterparties, against which an erroneously transferred amount (or a payment with an incorrectly specified purpose) may be taken into account. Correction via payment adjustment cannot be applied if there are no current engagement agreements with the payee.
Regardless of the reason for which the payment was considered to have been made without reason, it is recorded by both the payer and the recipient using the same algorithms, taking into account the fact that for these two parties the transactions when returning the erroneously transferred funds will be mirror images.
Since erroneous transfers subject to refund have no connection with the calculations performed between suppliers and buyers, VAT on them is not allocated either for payment or as deductions. However, if calculations are carried out in foreign currency, then exchange differences attributable to income/expenses may arise. The recipient of the funds, when returning them, in the purpose of payment in the payment document should reflect information that this payment is used to return the funds erroneously transferred to him, and provide a link to the details of the document in which the payer expressed a request to return the money to him.
If the error is corrected by taking into account the transferred amount as payment under another supply agreement, then it will be taken into account in the usual manner for the supplier-buyer relationship with the implementation of the necessary VAT transactions.
Letter requesting refund of overpaid amount to supplier
Incorrectly received funds in accounting do not belong to the income of the organization. This is due to the fact that in accounting income is recognized as an increase in the economic benefits of the organization (clause 2 of PBU 9/99). However, when erroneously transferred money arrives in the current account, its purpose is not determined. They do not relate to income from ordinary activities or other income (clause 4 of PBU 9/99). The organization is obliged to return them, therefore such amounts cannot be recognized as income in accounting. In addition, in relation to these funds, the conditions for recognizing income given in section IV of PBU 9/99 are not met. An exception to this rule is funds received, which the organization has the right not to return. Reflect them in accounting depending on the purpose of the funds received (advance payment, accounts receivable with an expired statute of limitations, etc.).
If you have a letter from the payer stating that this is an error, and if you returned this payment immediately, that is a sufficient reason not to consider this payment an advance. And accordingly, do not charge VAT. I’m not sure that subaccount 76.02 Claims settlements is appropriate here. Actually, there are no complaints. Possible 76.05. But this is basically not important.
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Incorrectly addressed money arrived in the current account: postings
For the recipient of funds to whose current account money was mistakenly received, a posting reflecting the receipt of unidentifiable funds will be made at the time the payment document is linked to the accounting accounts.
A similar amount is debited to account 76, and this is done by posting Dt 76 Kt 51 (52).
Accordingly, if the erroneous payment is returned to the counterparty's current account, the posting will be reversed: Dt 51 (52) Kt 76. The exchange rate difference when returning currency will be reflected by the posting Dt 91 Kt 76 or Dt 76 Kt 91.
If, in relation to a payment reflected as an error, a decision arises to take it into account as payment for a future or already completed sale of goods (performance of work, provision of services), then on the basis of written information received from the payer, an entry will be made Dt 62 Kt 76 with the ensuing hence the VAT implications.
Refund of overpaid amounts
(11) grfsd, “Wiring D 201.34 K 302.11 is completely correct, it’s just that for some reason 1C didn’t add it to the directory of correct postings. “Perhaps the fact is that the organization generally does not have the right to return the excessively paid salary to the employee (due to the fault of the accountant, etc.). Unless at the request of the employee himself. But you have the right to recover the damages incurred from the accountant who made the mistake (or another guilty person). Only this will already be account 209, and not a refund of expenses, but the income of the institution. Why then should the employee’s voluntary return to the cash desk, in fact his own money, be a return of expenses for the institution and not income? This is my opinion, I may be wrong
