Sample order for amendments to accounting policies

What is accounting policy

Accounting policy is a document establishing methods and methods for conducting tax and accounting of a company.
Deviation from the approved version is possible only if changes are made in a timely manner. All accounting entities formulate the policy independently. That is, all legal entities write accounting policies for taxes and accounting. For individual entrepreneurs, the task is simpler: if they don’t do accounting, then they don’t need an accounting policy, but they still have to create a tax policy.

How to register innovations

A change in accounting policy must be introduced by order of the head of the budget organization.

In the document, indicate the reasons and points that you are changing.

Here is a sample of changes to accounting policies made in connection with changes in legislation - for example, a new order of the Ministry of Finance came into force.

When can you make changes?

According to the approved policy, the company operates from year to year. The legislator does not allow changes to be made at will. It is allowed to edit the document in clause 10 of PBU 1/2008 only in the following cases.

Changes in legislation . Everything is simple here - the UE cannot contradict the law. Therefore, if changes have occurred in the field of accounting, for example, a new act has come into force, then change the company’s policy in a timely manner.
The company has developed a new way of accounting . An important point is that changes made to the policy should improve the quality of information about the company’s activities.
Working conditions have changed . This could be a change in the main activity, merger, acquisition, division of the company, and so on.

Amendments to the policy occur on the basis of an order signed by the head of the organization. The order is written in free form.

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Reasons for changing the UE

In accordance with PBU 1/2008 (clause 10), amendments to the accounting and/or tax accounting policies of a company are allowed in three cases:

the organization has developed a new method of accounting, for example, depreciation, the use of which improves the quality of information reflection;
the business conditions of the enterprise have changed significantly due to reorganization, a new profile of activity, a change of owner, etc.;
accounting or taxation legislation was supplemented with amendments, and a new normative act appeared.

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Changes to accounting policies for other reasons are unacceptable. At the same time, there are no restrictions on adding to the UE, since changes and additions are fundamentally different things. When changes are made, it is necessary to make a retrospective recalculation in order to display the data of previous years and incoming accounting balances in the statutory financial statements. Additions are made when a new type of activity appears and do not require recalculation, since they are used to correctly reflect current accounting information. For example, a trading enterprise, in addition to retail sales, decides to trade wholesale - the UP needs to be supplemented with ways in which it is planned to reflect wholesale transactions.

From what period do the changes take effect?

The changes are effective from the beginning of the reporting year. If the editing is caused by a change in accounting legislation, the changes take effect from the date of entry into force of the relevant law.

If the changes had a significant impact on the company's finances, account for them retrospectively. We will have to evaluate what the result would have been if the company had applied the new accounting policies from the beginning of its operations. In practice, retrospective accounting is an adjustment of retained earnings and other balance sheet items to the earliest date in the financial statements if this can be done reliably. If reliability cannot be ensured, apply the new accounting policies from the date the amendments are introduced.

When innovations come into force

If accounting methods change at the initiative of a budgetary organization, the innovations come into force from the beginning of the next year (Part 7, Article 8 of Law No. 402-FZ of December 6, 2011).

If amendments are made to the law, the amendments come into force when the new legal act comes into force.

In the financial statements, disclose and explain all new provisions of the UP if these amendments significantly affected the financial result of the organization (clause 16 of PBU 1/2008).

Explanations must include:

why the content of the document changed in the reporting year. For example, a change in the method of writing off inventory items (as this led to an increase in the reliability of information), the number of the law, the entry into force of which resulted in amendments or a change in the company’s activities;
what kind of adjustments have been made;
how the consequences of the adjustments made are reflected in the reporting;
the amount of adjustments associated with innovations. If the company is not a small business entity, then it is also necessary to make a retrospective calculation.

Assess the possibility of such a recalculation and the period. If recalculation cannot be done reliably, then apply the new accounting method prospectively.

How to reflect changes in accounting policies in accounting statements

Reflect all significant changes in the financial statements. To do this, write an explanatory note. Clause 21 PBU 1/2008 contains a list of information that needs to be reflected:

reason for change;
nature of changes;
how changes are reflected in the reporting;
the amount of adjustments as a result of changes in the CP.

If the policy has been revised due to legal requirements, then the consequences must be disclosed as specified in the relevant law.

Is it possible to change accounting policies mid-year?

In order to change a company’s accounting policy during a financial year, compelling reasons are needed - for example, fundamental changes in the company’s work. Can a change of chief accountant be considered such?

As a general rule, a change in accounting policy must be introduced on January 1 of the year following the year of its approval. According to the law, changes to the CP can be carried out in three cases. Firstly, this is an update of legislation affecting accounting. At the same time, it will be possible to adjust the policy no earlier than from the moment the legal innovations come into force. Secondly, when the company develops new accounting methods. But in order for updating the management program in this case to be rational and justified, the new methodology must more reliably represent the facts of economic activity in the accounting and reporting of the organization, or be significantly less labor-intensive compared to the previous policy, but, again, without reducing the reliability of the information. And finally, as the third reason for changing the accounting policy of an enterprise, the law indicates a significant change in the operating conditions of the company. Such changes within the company may be associated, for example, with the reorganization of the enterprise or a change in its owners, a change in types of activities, restructuring of production, a significant expansion or reduction in the volume of activities, etc.

Please note that accounting policies are changed from the beginning of the reporting year, unless otherwise determined by the reason for such a change (clause 12 of PBU 1/2008). “The last clause is very important,” emphasizes Moscow auditor Yuri Slavin

, – After all, situations may arise in the activities of an enterprise when it is impossible to wait for the new financial year to make changes. For example, in cases where a company decides to engage in new types of activities, accountants will be required to record a change in business tasks in the accounting policy (according to the rules set out in Article 313 of the Tax Code of the Russian Federation). Or if a law or by-law on accounting comes out, the document itself will indicate that it will come into force in the middle of the year.”

A New Look

All the reasons necessary for changing the accounting policy are clearly indicated in paragraphs 5, 10 and 11 of the Accounting Regulations, as well as paragraph 6 of Article 8 of the Federal Law “On Accounting” dated December 1, 2011 No. 402-FZ.

The list of reasons for changing accounting policies in the middle of the year is “closed” and formulated quite clearly. However, no, no, a dispute “involved” in the desire of firms to add to or edit in their own way the above list of reasons will reach the arbitration court.

Keep in mind that the list of reasons is “closed” and formulated quite clearly. However, no, no, a dispute “involved” in the desire of firms to supplement or edit the above list of reasons in their own way will reach the arbitration court (see, for example, the resolution of the Federal Antimonopoly Service of the Volga District dated August 2, 2012 in case No. A65-28030/ 2011). Not long ago, one trading company changed its chief accountant. Having taken office, the newly appointed financial director prepared and updated a number of documents, including several orders to change the accounting policy of the enterprise, which changed the procedure for determining the proportions of VAT amounts on purchased goods used to carry out transactions subject to this tax and exempt from taxation. Based on this “innovation”, the accounting department recalculated the amount of VAT subject to recovery and additionally declared new amounts for reimbursement. Moreover, the changes were made, as they say, “retroactively”: the new chief accountant decided to “edit” the method of accounting for value added tax in those periods for which the company had long ago reported. And they decided to “correct” the matter by submitting updated declarations to the inspectorate.

This is what ultimately attracted the attention of the auditors. After checking the papers, the inspectors decided that they had unreasonably submitted more than two million rubles for reimbursement from the budget. However, the company, despite everything, believed that it had a legal right to reimbursement of the claimed amount. Therefore, the merchants applied to the arbitration court with a request to return from the budget the overpaid tax and, in addition, interest on the use of funds calculated on the day the decision was made.

Judicial unanimity

In the courtroom, the tax authorities once again explained that the company initially kept VAT records in proportion to the total revenue, respectively, for the types of activities subject to and not subject to this type of tax. At the same time, the tax on purchased goods (work, services) was reflected in the declarations as part of deductions. For the same tax periods, the amount of VAT was reflected in the declarations as tax amounts subject to restoration, and had already previously been legally accepted for deduction.

In accordance with the new edition of the “old” accounting policy, VAT amounts on goods (works or services) related to one specific type of activity are accepted for deduction in full. As for the tax on purchased goods, works or services related to several types of activities at the same time, they are distributed on the basis of proportion. The proportion for attributing VAT on goods used in activities subject to and non-taxable by this fee is calculated on the basis of revenue for the current period. To calculate the proportion, revenue excluding VAT is taken into account.

Having changed the accounting policy “retroactively”, the company filed updated returns, which reduced the amount of VAT subject to restoration. Having reduced the size, the company announced additional amounts to be reimbursed. At the same time, as documents confirming the legality of this “old-new” return, the company submitted to the inspectors orders to make changes to the accounting policies for the audited, past years.

The company does not have the right, at its discretion, to change its accounting policies and, moreover, to extend the new business practices to relations that arose in the period preceding the changes, the arbitrators recalled.

In turn, a company representative explained that changes to the accounting policy were made in connection with the arrival of a new accountant. Having heard such an argument, the arbitrators reminded the plaintiff that the law does not allow changing the accounting policy due to the appointment of a new chief accountant, because this event cannot be recognized either as a change in the law, or as a fundamental change in the company’s activities, or as a new method of accounting. And even more so, it is impossible to extend the effects of unauthorized changes to relations that arose in earlier periods, when the taxpayer enterprise had already determined a different procedure for accounting for VAT in its accounting policy.

Moreover, the applicant was reminded that based on paragraphs 5, 10 and 11 of PBU 1/2008, as well as paragraphs 5 and 7 of Article 8 of the Accounting Law, the accounting policies adopted by the organization are applied consistently from year to year. And it can only change from the beginning of the reporting year, unless, of course, otherwise is determined by the reason for such a change. Thus, since the company violated the procedure for making changes to the accounting policy, the company had no grounds for reducing the amount of VAT subject to restoration for the period audited by the auditors. The arbitrators of the first and appellate instances refused to satisfy the company's claim (decision of the Arbitration Court of the Smolensk Region dated May 17, 2012 and resolution of the Twentieth Arbitration Court of Appeal dated August 1, 2012 in case No. A62-7945/2011).

Then representatives of the organization, bypassing cassation, filed an application with the Supreme Arbitration Court. However, the panel of judges did not find any grounds for reviewing the contested judicial acts. The servants of Themis again explained that the company did not have the right to change the accounting policy at its own discretion and, moreover, to give it “retroactive force” (determination of the Supreme Arbitration Court of the Russian Federation dated February 28, 2013 No. VAS-1483/13).

Date of publication: September 18, 2014, 09:53

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What is the difference between addition and change?

When you make changes, you change the order in which you take into account those facts of life that already existed before. This entails changes in financial results, income, expenses and, therefore, the need for recalculation in retrospect.

Additions arise only for those transactions that you have not performed before. For example, the emergence of a new type of activity in addition to the old one. In this case, simply write down new provisions. There is no need to recalculate balance sheet items and determine the impact of adjustments on past dates.

When maintaining accounting and tax records, adhere to the developed accounting policies. This will help you defend your position in a dispute with the Federal Tax Service. In order not to deviate from your policy, use the cloud service Kontur.Accounting. The program can work with different methods of accounting and tax accounting. We give all newcomers a free trial period for 14 days.

Do I need to approve accounting policies every year?

Thus, the regulatory documents listed in the previous section containing the requirements for accounting policies do not contain any mention of the mandatory annual approval of the management program. There is also no direct prohibition on this.

What should I do? The decision remains with the company itself. Only she has the right to establish and consolidate the procedure for annual (or other frequency) approval of the UP.

However, when making such a decision, you need to consider the following:

If the accounting policy does not change from period to period, it is reasonable to apply the principle of rationality - instead of the annual approval of the accounting policy, during its initial registration, indicate the date from which the specified document is subject to application (instead of indicating the next year).
Make all changes and additions to the UP without re-affirming the entire current UP, i.e. adding them when changing the accounting method - from the beginning of the year, with amendments to the legislation - from the moment they enter into force.

In some cases, the need for frequent approval of the UP may arise, for example, if:

Constantly at different points of the CP, multiple insignificant nuances are adjusted, which are formalized in separate additions to the CP - in such conditions it is difficult to fully understand the impact of these adjustments as a whole on the content of the accounting policy, and therefore there is a need to approve a new edition of the CP;
the accounting methods used have radically influenced the type and composition of the current UP - here the approved accounting policy is replaced by adjustments and loses its purpose, therefore it is advisable to approve a new edition of the UP taking into account all the amendments in a single text.

The materials posted on our website will help with the registration of the UE:

“How to draw up an organization’s accounting policy?”;
“Tax accounting registers for VAT: we fix them in accounting policies”.

How to choose an accounting policy?

To answer this question, you need to determine whether there is any IAS/IFRS standard or IFRIC/SIC clarification that applies to your specific transaction or situation.

If there is some standard or clarification, you simply apply it. For example, when you account for your new machinery, you would obviously apply IAS 16 Property, Plant and Equipment.

If there is NO specific standard or explanation relevant to the transaction in question, the accountant must use judgment or develop his own policy , but with caution, since the policy must provide the most reliable and relevant information possible.

An example is the accounting of works of art: such accounting is not covered by specific standards, and in many cases the accountant will need to develop his own accounting policies.

How to develop your own accounting policy?

First , you need to look at IFRSs and IFRIC/SIC interpretations that address similar or related issues.

For example, if you are choosing your accounting policy for works of art, then perhaps IAS 16 Property, Plant and Equipment or IAS 40 Investment Property would be standards covering similar issues.

Second , you need to apply the concepts from the Conceptual Framework for Financial Reporting.

[cm. also full text KO 2018]

In addition, you may want to consult other standard-setting bodies (such as the FASB) to review their rules or standards and use them as a guide in developing your accounting policies. Many companies do this regularly.

For example, software companies' IFRS accounts often relied on US GAAP standards to recognize revenue from software projects because IAS 18 Revenue did not provide detailed guidance. Although, after IFRS 15 “Revenue from contracts with customers” came into force, the situation has changed, since in terms of revenue recognition, the IFRS 15 standard is in many ways similar to US GAAP.

It should also be added that you must apply each accounting policy consistently to all transactions of the same category or type. In some cases, IFRS allows you to classify your transactions, in which case you may have different accounting policies for different categories.