Accounting for contributions for major repairs

(published in the magazine “Chairman of the HOA” No. 1 (75) 2014)

Owners of premises in apartment buildings managed by HOAs and housing cooperatives can use one of two methods to form a capital repair fund:

— transfer of contributions for major repairs to a special account. In this case, the owners of the special account, as a rule, become the HOAs and housing cooperatives themselves;

— transfer of contributions for major repairs to the account of the regional operator.

In houses managed by management organizations, only the second method is used.

In table 1 shows accounting transactions that can be performed using a special account.

In table 2 shows accounting transactions when using a regional operator account.

Using a special account

Business transaction

Debit

Credit

Norm of the Housing Code of the Russian Federation

1. Monthly contributions to the capital repair fund have been accrued to the owners

2. Interest (penalties) were accrued to the owners in connection with improper fulfillment of the obligation to pay contributions

3. Part of the owners’ debt is covered by retained earnings

4. Part of the profit is transferred to a special account in accordance with clause 3

5. Owner contributions were transferred to a special account

6. The special account received the interest (penalties) accrued in clause 2

7. The capital repair fund received bank interest for using funds from a special account

8. Funds were received from the budget as a measure of state support for capital repairs

9. A loan (loan) was received due to a lack of funds in the capital repair fund

10. Due to future contributions from the owners, the capital repair fund has been increased to cover the loan (loan)

11. A reserve has been created to finance capital repairs in accordance with the repair estimate

12. Accrued to the contractor for the execution of major repairs

13. Transferred to the contractor for the execution of major repairs

14. The special account received contributions from the owners sufficient to cover the debt under clause 9

15. The loan debt has been paid from a special account.

16. Funds were transferred to the account of the regional operator when changing the method of forming the capital repair fund

17. Funds received from the regional operator are credited to a special account when the method of forming the capital repair fund changes

18. Commission remuneration was written off in accordance with the terms of the special account agreement

19. Funds were transferred from a special account in the cases provided for in Part 2 of Art. 174 Housing Code of the Russian Federation

In accordance with paragraph 2 of Art. 251 of the Tax Code of the Russian Federation, funds received by a homeowners’ association or housing cooperative for the formation of a reserve for major repairs of common property represent targeted revenues. Therefore, in Table. 1, these funds are reflected in the credit of account 86 “Targeted financing” by type of income.

The movement of funds in a special account is reflected using account 55 “Special accounts in banks”.

Account 76-2 (operation 10) is used to increase the capital repair fund, reflected in the credit of account 86-3, at the expense of accounts receivable - future contributions from the owners in the event of receiving a credit (loan) necessary for capital repairs.

The amount of funds intended to finance specific capital repairs according to the estimate under the contract is accumulated under the credit of account 96 “Reserves for future expenses” by debiting each of the subaccounts of account 86 “Targeted financing” in proportion to the balances on these subaccounts.

In accordance with the norm of Part 2 of Art. 177 receipts reflected in paragraphs. Tables 6 and 7 1, do not form an object of taxation.

If the HOA has been created in several apartment buildings, then, according to Part 4 of Art. 175 of the Housing Code of the Russian Federation, for each house a separate special account must be opened in the bank, and in accounting for account 55 “Special accounts in banks” - a separate sub-account.

Transactions in the accounting of homeowners' associations (housing cooperatives) and management organizations when using a regional operator account

Business transaction

Debit

Credit

Norm of the Housing Code of the Russian Federation

1. Monthly contributions to the capital repair fund have been accrued to the owners

2. Part of the owners’ debt is covered by the retained profits of the HOA (housing cooperative)

Read more: What should a person do if he enters the entrance

3. The transfer of contributions by the owners to the regional operator is reflected

4. Part of the profit for the case of clause 2 is transferred to the regional operator

When using a regional operator's account, monthly contributions for major repairs are received from the owners of premises in an apartment building directly to the account of the regional operator (bypassing the accounts of the HOA, housing cooperative, and management organization). For this reason, in Table. 2 there are no operations similar to operation 5 in table. 1. But HOAs, housing cooperatives, and management organizations must control the processes of calculation and payment of contributions by owners of premises in houses under their management. For this purpose, the accounting departments of HOAs, housing cooperatives and management organizations must receive information about the accrual and actual payment of contributions (operations 1 and 3 of Table 2). The credit balance in account 76-2 reflects the debt of the owners to pay contributions. Operations 2 and 4 appear if the HOA, housing cooperative or management organization has the opportunity to cover part of the owners’ debt using existing income from renting out common property in an apartment building or other income.

The subaccount numbers in the tables are conditional. The accountant has the right to set subaccount numbers in accordance with the working chart of accounts adopted in the accounting policy of the organization.

Postings in HOAs - basic examples

All decisions made regarding common property are approved at a general meeting of homeowners by a majority vote. To determine the number of votes that the owner of a residential premises has, it is necessary to take into account his share in the ownership of the common property.

Modern practice shows that one of the most effective ways to manage an apartment building is an HOA. The organization of an established system for accounting for HOA operations is a prerequisite necessary to ensure the full functioning of the partnership and the fulfillment of its main tasks. In the article we will analyze specific aspects of accounting for HOAs and consider typical accounting entries in HOA enterprises using examples.

Account of wiring for major repairs in a homeowners' association

Cash receipts that are subject to and non-taxable must be accounted for separately. It is also important to ensure separate accounting of expenditures of funds received as targeted revenues. Therefore, the priority areas of work for an HOA accountant include drawing up cost estimates and distribution of costs, organizing analytical accounting of the organization’s costs.

Receipt of invoice 86 credit of invoice 70 “Settlements with personnel for wages” - salaries to employees.
Receipt of account 50 “Cash” debt of account 51 – receipt of money from the bank.
Receipt of nominal account 10 “Materials” credit of account 50 – purchase of household supplies for cash.

Account of wiring for major repairs in a homeowners' association

The HOA keeps records of targeted funds in account 86 “Targeted Financing”. For account 86, it is necessary to open sub-accounts based on the sources of funds received. Let's consider the accounting of HOA fees, except for payments for housing and communal services, the accounting of which will be discussed below.

It is important to note that the partnership is obliged to ensure the maintenance of the common property of the apartment building as a whole, regardless of whether the share of such property belongs to a member of the HOA (TSN) or not. Consequently, in order to ensure the fulfillment of such an obligation in relation to the owners of premises who are not members of the HOA (TSN), the partnership must separately enter into an agreement with each of them for the maintenance and repair of common property in an apartment building.

Charging fees for major repairs

Resolution of the Government of the Russian Federation dated December 29, 2014 No. 924/pr approved methodological recommendations for filling out a sample form of a payment document. In accordance with clause 55 of the document, in the section “Information for making a contribution for major repairs” you must indicate:

name of the owner of the special account,
special account number,
bank details of a special account.

Many homeowners' associations find it convenient to collect owner contributions for major repairs in the HOA's current account, and then transfer them in the total monthly amount to a special account.

But this is the wrong approach, since the RF PP dated December 29, 2014 No. 924/pr advises to indicate in the payment document exactly the bank details of a special capital repair account, and not the details of any other account of a management company, homeowners' association, residential complex, housing cooperative.

We decided to clarify this point and found out from the Ministry of Construction of the Russian Federation whether administrative responsibility is provided for the transfer of capital repair funds to the account of the management organization or HOA.

In its response, the Ministry of Construction of the Russian Federation indicated that if capital repair funds are placed on the account of a management organization, HOA, residential complex, housing cooperative, such an organization will be held administratively liable under Part 1 of Art. 14.8 of the Code of Administrative Offenses of the Russian Federation - they will issue a warning or issue a fine. For an official, the amount of the fine will be from 500 to 1,000 rubles, for a legal entity - from 5,000 to 10,000 rubles.

Account of wiring for repairs from capital repairs in the homeowners association

Debit 60 Credit 51 (55) – payment was transferred to a third-party contractor performing repairs; Debit 20 Credit 60 – expenses for repairs performed by third-party contractors are reflected; Debit 19 Credit 60 – input VAT presented by contractors is taken into account; Debit 20 Credit 19 – the amount of VAT claimed by contractors is attributed to the costs of repairs carried out by contract; Debit 20 Credit 70 (69, 10...) – reflects the costs of repairs carried out by the homeowners association (TSN) on their own; Debit 86 Credit 20 – reflects the expenditure of targeted financing; Debit 86 Credit 68 subaccount “Calculations for VAT” – VAT is charged for repair work carried out by the HOA (TSN) on its own.

Entry, membership, share fees, donations, and funds in reserve for repairs are not subject to taxation. Tax accounting of amounts received as income in HOAs is no different from accounting in other organizations engaged in commercial activities.

Accounting for capital repairs in HOAs

The costs of major repairs cannot be recognized for the purposes of calculating the tax paid when applying the simplification, since they were incurred at the expense of targeted financing. At the same time, the organization is obliged to keep separate records of such income and expenses (clause 14, clause 1, article 251, clause 2, article 346.16, clause 1, article 252 of the Tax Code of the Russian Federation).

account 86-2 “Targeted revenues for current repairs of common property”;
account 86-3 “Targeted revenues for major repairs of common property”;
account 86-3-1 “Targeted revenues for major repairs of common property from owners”;
account 86-3-1 “Targeted revenues for major repairs of common property from the budget.”

Read more: Liquidation of an organization with debts to the tax authorities

Accrual of payments from owners to the fund (account 76).

According to paragraph 9 of Information No. PZ-1/2015, dedicated to the indicator reflected in the group of items “Receivables” of the balance sheet, based on the assumption of temporary certainty of the facts of economic life, for this group of items a non-profit organization that forms a capital fund in accordance with the Housing Code of the Russian Federation repair of common property in the apartment building, the debt on payment by the owners of the premises in the apartment building of contributions for the capital repairs of the common property and penalties in connection with improper fulfillment by the owners of the obligation to pay contributions for the capital repair is also reflected.

The above is true both for the regional operator, who forms a repair fund in the “boiler”, and for the owner of a special account (regional operator, HOA, residential complex).

Please note that the Ministry of Finance recommends accruing accounts receivable for the amount of not only contributions for major repairs, but also penalties. However, this can be done only after there is confidence in receiving economic benefits, in particular, when the debtor has admitted the debt or a court decision to collect penalties from the debtor has entered into force (or the penalties have been deposited into a special account). It is premature to recognize penalties at the end of each month simultaneously with the accrual of the next contribution for major repairs[2].

Taxation of HOAs under the simplified tax system in 2019

mandatory payments, entrance and other fees of HOA members;
payments from homeowners who are not members of the HOA;
income from the entrepreneurial activities of the HOA, aimed at fulfilling the goals, objectives and responsibilities of the HOA (Article 152 of the Housing Code of the Russian Federation);
subsidies for the operation of common property, carrying out current and major repairs, providing certain types of utilities and other subsidies;
other supply.

What is a capital improvement special account?

This is a special bank deposit intended for storing and managing funds, the intended purpose of which is to carry out major repairs of houses.

IMPORTANT! Spending money from a special account is possible only in accordance with the estimate of repair work, approval of the list of which is the exclusive right of the housing association that opened this deposit (clause 1 of Article 137 of the Housing Code of the Russian Federation).

The following operations can be performed on this account:

the receipt of money from residents’ contributions, penalties for late payments and subsidies from the budget (you can read about payments to the TSH, payments for mandatory or not services, including contributions for major and current repairs, in another article).
Payment for major repairs according to the estimate based on payment documents submitted to the bank by the responsible person.
Repayment of loans whose intended purpose was major repairs.
Transfer of deposited funds to another special account, as decided by the meeting of members of the partnership.

The amount of the deposit may increase when the bank accrues interest for placing funds.

The account owner can be the following structures:

Housing association.
Managing organization.
Housing cooperative.

When the owner of the account is a housing association, the management of the allocated funds is carried out by the board (clause 4 of Article 151 of the Housing Code of the Russian Federation).

Book of Postings for Overhaul in Homeowners' Association

Who are the officials' recommendations addressed to?

Let's pay attention to an important point. Certain provisions of Information No. PZ-1/2015 are addressed to:

a non-profit organization that forms, in accordance with the Housing Code of the Russian Federation, a fund for capital repairs of common property in an apartment building (clauses 9, 22);
a non-profit organization accumulating funds in a special account intended for collecting and transferring funds for major repairs of common property in an apartment building in accordance with the Housing Code of the Russian Federation (clause 11);
a non-profit organization obliged, in order to control the formation of a capital repair fund, to submit information to the state housing supervision authority in the manner and within the time limits established by the Housing Code of the Russian Federation... (clause 39).

Among the non-profit organizations that may meet these requirements, there is both a regional operator (an non-profit organization created by a constituent entity of the Russian Federation in the organizational and legal form of a fund to perform the functions specified in Article 180 of the RF Housing Code, including to perform the functions of the owner of a special account), and managers of apartment buildings, homeowners' associations, residential complexes, acting as the owner of a special account (clause 1, 2, part 2, article 175 of the Housing Code of the Russian Federation). Strictly speaking, the Housing Code states that the capital repair fund is formed by the owners of premises in apartment buildings (see, for example, Part 2 of Article 172 of the Housing Code of the Russian Federation), and not by any non-profit organizations. The wording chosen in paragraphs 9, 22 of Information No. PZ-1/2015 is of a philistine nature, but it is perhaps impossible to interpret it in two ways: here we mean the organization on whose account or special account a capital repair fund is being formed. A regional operator and a homeowners' association (HC) can also accumulate funds in a special account.

The same persons are required to submit information to the State Housing Inspectorate bodies in order to control the formation of the fund (Parts 2, 3, Article 172 of the RF Housing Code).

Let's go in order, remembering that all the recommendations given below are addressed, in particular, to homeowners' associations (housing complexes) managing apartment buildings and selected as the owner of a special account for the formation of a capital repair fund.

Accounting and tax accounting in HOAs (TSN): postings, documents, benefits

It is necessary to pay attention to the procedure for accounting for utility payments received from the owners of premises when applying the simplified tax system in the partnership. The organization's charter may stipulate its obligation to provide such services to its members and enter into contracts with suppliers on their behalf.

Money received as membership or other fees does not form the partnership’s income and is used to pay for utilities and maintain housing in proper condition. When carrying out activities and concluding contracts, the HOA must act only in the interests of home owners.

Report forms on the results of repairs

Based on the results of the repairs carried out, regardless of whether we are talking about major or current repairs, the homeowners’ association represented by its managers, together with a contractor (if it is involved in the work) or independently, if the work was carried out on its own, is obliged to report on the work carried out events.

The main types of report on the work done should be considered:

providing residents of the house with the opportunity to participate in the acceptance of work performed during one or another stage of repair, regardless of whether we are talking about a major repair or a routine one;
based on the results of the completion of all repair work, each owner of the premises has the legal right to sign or refuse (if he is not satisfied with something regarding the characteristics) of the acceptance certificate for the work performed;
Based on the results of complete acceptance and mutual settlements with contractors, the HOA, represented by its leaders, holds an extraordinary meeting of the owners of the premises in the house in order to provide a full report, including financial, on the results of the repairs carried out.

The report presented at such a meeting by the head of the HOA must contain the following information:

calendar dates indicating the range during which repair work was carried out;
list of works initially defined as mandatory;
a list of work actually performed , including an indication of when and on what basis deviations from the initially established list of activities and objects in respect of which repairs should be carried out were made;
the estimated cost of the work performed , which was established at the time of the start of such work;
the final cost of the work performed (if it differs from those initially established, then an explanation is required as to the reasons for such a deviation, as well as on the basis of which the decision was made about the possibility of changing the cost. The latter justification is required only if the actual cost of the work for unit was increased);
total amount of money that was spent during the repair (for example, if we are talking about additional purchase of building materials);
the status of the house’s special account for major repairs after all settlements with contractors have been completed.

If, when making a decision to carry out repairs at a meeting of owners, a decision was made on the need for intermediate reporting forms, then the head of the HOA is obliged to carry out such a report throughout the entire repair with the frequency established at the meeting.

The main difference between such a report and the final one should be the indication that we are talking about the work actually completed at the time of preparation of such a report, as well as how much work remains to be done.

Accounting for contributions for major repairs

The Capital Repair Fund is created through contributions from real estate owners. Its purpose is to reserve funds for expensive repairs in the future. Contributions are transferred by the owners of premises located in apartment buildings on a monthly basis (Part 1 of Article 169 of the Housing Code of the Russian Federation).

D76 – K96 – monthly accrual of contributions to the capital repair fund to the owners;
D55 – K76 – monthly receipts of contributions for major repairs from the owners;
D96 – K60 – 55 million rubles, the cost of repairs that will be carried out by the contracting structure;
D60 – K51 (55) – payment for the contractor’s services was made (RUB 55 million);
the balance of funds in the fund (account 96) amounted to 500.6 million rubles. (555.6 – 55).

Contributions for major repairs of the common property of the house: we pay and take into account

The article from the magazine “MAIN BOOK” is relevant as of April 17, 2015.
Contents of the magazine No. 9 for 2015 M.G. Moshkovich, lawyer

If your organization owns premises in an apartment building (MKD) - an office, a store, a cafe or just an apartment, then it also owns a share in the common property of the entire building. Since 2013, major repairs of common property are organized according to new rules: regional authorities adopt special programs, and owners of premises pay a special contribution for these purposes, allocated from the monthly fee for maintenance and servicing. 168, part 1 art. 169 Housing Code of the Russian Federation. True, not all - there are exceptions to every rule.

Thus, the overhaul program does not include houses in disrepair and those that will be demolished due to the seizure of land for government needs. 2 tbsp. 169 Housing Code of the Russian Federation. In addition, regions have the right to exclude houses that have fewer than three apartments or are more than 70% worn out. 1 tsp. 2 tbsp. 168 Housing Code of the Russian Federation. The new procedure does not apply to residential buildings, all premises in which belong to one owner - after all, they do not have common property. Letter from the Ministry of Construction dated 07/07/2014 No. 12315-АЧ/04 (question 1). Consequently, owners of premises in the listed cases do not have to pay contributions to the capital repair fund.

Let us now consider the rules for paying contributions for major repairs of common property and the procedure for reflecting them in accounting.

Features of accounting in HOAs

The “Income” object is very simple, but you just need to correctly take into account all profits and record insurance premiums and sick leave in order to reduce taxes to 50%.
“Income – expenses” is already more difficult for tax accounting, but it is more profitable if the partnership has more expenses than profits. Then the HOA will pay only 1% of the profit.

Receipt of account 76 “Settlements with various creditors and debtors” subsection “Settlements with residents” credit of account 86 “Targeted financing” - payment by residents of membership fees (aka rent).
Receipt of nominal account 76 sub-account “Settlements with tenants” credit of account 76 sub-account “Settlements for utility bills” – calculation of payment for utility bills.

Basic rules for accounting in HOAs (nuances)

In accordance with the plan and provisions of PBU 9/99 (approved by order of the Ministry of Finance dated 05/06/1999 No. 32n) and PBU 10/99 (approved by order of the Ministry of Finance dated 05/06/1999 No. 33n), accounting for contributions from partners for the implementation of activities is kept in account 86 , and receipts from income-generating activities are in account 90.

Read more: Rights are expiring, what to do 2018

One of the main tasks is the generation of a financial report (usually for the year), which provides partners with complete and reliable information about the activities of the HOA. In addition, the HOA accounting department prepares an estimate of the HOA's income and expenses for the next year. The estimate is approved at the general meeting of the partners and in the future is the main planning and accounting document for maintaining the accounting of the HOA.

The Accounting Methodological Center (AMC) has prepared recommendations for accounting for the costs of major repairs of fixed assets.

Timely repairs are one of the conditions for the normal functioning of a fixed asset facility. With a one-time write-off of the costs of major repairs to the cost of production, the enterprise is faced with the problem of a sharp increase in the costs of the current period. However, the fact of repairs, other things being equal, cannot be considered as an objective reason for the increase in the cost of products produced during the period of these activities, since these costs determine the receipt of economic benefits over a certain period in the future.

PBU 6/01 “Accounting for Fixed Assets” does not regulate the procedure for accounting for expenses for capital repairs of equipment: in accordance with paragraph 27 of PBU 6/01, costs for the restoration of fixed assets are reflected in the accounting records of the reporting period to which they relate. However, this document does not regulate approaches to the classification of these expenses - capital or current.

In domestic accounting practice, these expenses will be included in the cost of finished products during the period of their implementation. This approach is traditional. In addition, in accordance with the Guidelines for accounting of fixed assets, approved by Order of the Ministry of Finance of the Russian Federation dated October 13, 2003 No. 91n, expenses for repairs, technical inspections and maintenance of fixed assets in working condition are subject to reflection as part of production costs.

In accordance with paragraph 2 of PBU 21/2008 “Change in estimated values,” a change in the estimated value is recognized as an adjustment to the value of an asset (liability) or a value reflecting the repayment of the value of an asset, due to the emergence of new information, which is made based on an assessment of the current state of affairs in the organization, expected future benefits and liabilities and is not a correction of an error in the financial statements.

Thus, if the period for writing off expenses for major repairs as expenses was determined incorrectly, it is subject to clarification, and the remaining amount of expenses or the amount of expenses to be written off as expenses is subject to adjustment.

Cash in a special account (account 55).

Paragraph 11 of Information No. PZ-1/2015 provides recommendations on the reflection of indicators for the group of items “Cash and cash equivalents” of the balance sheet. In particular, a non-profit organization accumulating funds in a special account (account 55) intended for collecting and transferring funds for major repairs of common property in apartment buildings in accordance with the Housing Code of the Russian Federation, the balance of these funds is reflected in a separate article of the group of articles “Cash and cash equivalents."

It seems that this recommendation fully applies to all owners of special accounts, which may be a regional operator, HOA, or residential complex. Due to the fact that the information materials are addressed specifically to NPOs, management companies are not named here, but in terms of legal status in this case they are no different from the HOA and the regional operator.

Please note that Information No. PZ-1/2015 does not contain any recommendations for accounting for funds received into the account of the regional operator (when the capital repair fund is formed by the “boiler” method). This is quite fair, since payments by premises owners in this situation are the property of the regional operator (Clause 2, Part 1, Article 179 of the Housing Code of the Russian Federation), so there is no doubt about the need to account for funds on the balance sheet of the regional operator.

But with regard to funds in a special account, the rights to which belong to the owners of premises in apartment buildings, the recommendations of the Ministry of Finance are clear: they should be taken into account on the balance sheet of the organization that owns the special account, and in the reporting they are reflected separately from other funds.