How to calculate the amount of an estimated liability
There is no reserve algorithm in PBU 8/2010. Therefore, the procedure for its calculation should be approved in the accounting policy.
The following options are possible for determining the specific amount of contributions to the valuation reserve for vacation pay:
- based on the actual size of the monthly wage fund;
- for each employee separately;
- by department or employee category.
For the calculation, you will need data on the number of days of unused vacation for each employee as of the end of the reporting period and the vacation schedule for the coming year.
The amount of vacation pay liability at the end of the reporting period can be calculated as follows: the number of days of unused vacation for each employee is multiplied by his average daily earnings for the 12 months preceding the reporting period.
Average daily earnings are calculated based on all accruals taken into account when calculating vacation pay in accordance with Decree of the Government of the Russian Federation dated December 24, 2007 No. 922.
In this case, the time and amounts accrued during this time are not taken into account in cases where the employee:
- received benefits for temporary disability or maternity benefits;
- did not work due to downtime due to the fault of the employer or for reasons beyond the control of the employer and employee;
- did not participate in the strike, but was not able to do his job;
- used additional paid days off to care for disabled children;
- was on a business trip or vacation or in other cases was released from work with full or partial retention of wages (or without pay).
Social payments and other payments not related to wages are also not taken into account.
The amount of the liability for insurance premiums is determined by multiplying the amount of the liability for vacation pay by the rate of insurance premiums and “injury” premiums.
When calculating insurance premiums, the amount of payments in favor of each individual must not exceed the established limit, beyond which firms paying contributions at the general rate must accrue additional contributions to compulsory pension insurance. Based on the vacation schedule for the current year, it is necessary to assess how, by the time vacation pay is paid to the employee, insurance premiums will be calculated from his income.
You can accrue the estimated liability for vacation pay at a frequency determined at your discretion - for example, quarterly. Then the amount of the reserve must be compared with the amount formed at the end of the previous quarter and increased by actually paid vacation and insurance contributions. Increase the estimated vacation liability by the resulting difference.
You can make similar calculations not for each employee, but, for example, by department, by salary level, etc. In this case, you will have to take into account the average daily earnings for the department (group), calculated from the general wage fund and the average number of employees in 12 months.
The amount of the estimated liability must also include additional vacations.
The emergence of estimated liabilities
Estimated liabilities may arise due to the following factors:
- Court decisions or agreements with relevant conditions. For example, a company enters into an agreement with its clients, according to which, if services are provided with insufficient quality, the money will be returned. Customers usually have complaints, so it makes sense to create a reserve. These will be estimated liabilities, since there is a high probability of their occurrence, but the exact amount is unknown.
- Actions that are not recorded in legal documents, but oblige the company to certain obligations. For example, a store posted an announcement that it would return money to customers if the purchased products turned out to be of poor quality. Despite the fact that this obligation is not formalized in any way, the store bears its consequences in connection with a public statement.
- A reserve has been formed for restructuring. It can be created only if the following conditions are met: there is a restructuring plan, interested parties are notified about the procedure.
- A deliberately unfavorable agreement was concluded. The company's managers are confident that they will suffer losses in connection with it. The LLC must be reflected in accounting in the same month in which the agreement is executed.
What are the features of inventory of estimated liabilities ?
Estimated liabilities are indicated in accounting only if the following conditions are met:
- Financial obligations cannot be avoided. For example, a company rents premises that, according to the lease agreement, need to be renovated. While repair work has not yet been carried out, it cannot be avoided.
- The probability of incurring expenses exceeds 50%.
- There is information that allows you to estimate the costs of fulfilling the obligation.
To form a reserve, all of the above conditions must be present. If one of them is not met, a contingent liability is recognized. This indicator does not need to be recorded. It is stated in the notes to the report.
Reflection in accounting
When creating a reserve, vacation expenses can only be written off against this reserve.
The formed reserve is reflected in account 96 “Reserves for future expenses”. The reserve amounts are accrued by debiting expense accounts that record employee salaries:
DEBIT 20 (23, 25, 26, 29, 44...) CREDIT 96
— an estimated reserve for vacation pay has been accrued.
As employees go on vacation, the accountant accrues vacation pay, insurance contributions for health insurance, social insurance, compulsory medical insurance and contributions for “injuries” from the reserve.
Postings are reflected in the debit of account 96 in correspondence with accounts 70 and 69:
DEBIT 96 CREDIT 70
— vacation pay is accrued from the reserve;
DEBIT 96 CREDIT 69
— insurance premiums for OSS, compulsory health insurance, compulsory medical insurance and contributions for “injuries” are calculated at the expense of the reserve.
In tax accounting, a company may or may not create a reserve for vacation pay (Article 324.1 of the Tax Code of the Russian Federation). If a holiday reserve is not created in tax accounting, then differences and associated deferred tax assets will arise. The wiring is completed:
DEBIT 09 CREDIT 68
— a deferred tax asset has been formed (in the amount of the estimated liability × 20%).
When vacation pay is actually accrued, this asset is extinguished:
DEBIT 68 CREDIT 09
— the deferred tax asset is repaid (by the amount of accrued vacation and insurance contributions × 20%).
EXAMPLE 1. ACCRUAL AND USE OF RESERVE FOR PAYMENT OF HOLIDAYS IN ACCOUNTING
In tax accounting, Vesna LLC does not create a reserve for upcoming expenses for payment of vacations.
Let’s assume that as of March 31, the company’s accounting records recognized an estimated liability for the payment of vacation pay in the amount of 50,000 rubles. The following entries were made in the accounting: DEBIT 20 CREDIT 96
- 50,000 rubles.
– the amount of the estimated liability is reflected; DEBIT 09 CREDIT 68
- 10,000 rub.
(50,000 rubles × 20%) – a deferred tax asset is reflected. In the second quarter, employees were accrued vacation pay (together with insurance contributions) in the amount of 50,000 rubles. and additionally, estimated liabilities for vacation pay were recognized in the amount of 100,000 rubles. The following entries were made in accounting: DEBIT 96 CREDIT 70 (69)
- 50,000 rubles.
– vacation and insurance contributions accrued; DEBIT 68 CREDIT 09
- 10,000 rub.
(RUB 50,000 × 20%) – the deferred tax asset is written off; DEBIT 20 CREDIT 96
- 100,000 rub.
– the amount of the estimated liability is reflected; DEBIT 09 CREDIT 68
- 20,000 rub. (RUB 100,000 × 20%) – a deferred tax asset is reflected.
Provisions, contingent liabilities and contingent assets. New PBU 8/2010 instead of PBU 8/01
(Order of the Ministry of Finance of the Russian Federation dated December 13, 2010 No. 167n “On approval of the Accounting Regulations “Estimated Liabilities, Contingent Liabilities and Contingent Assets” (PBU 8/2010)", registered with the Ministry of Justice of the Russian Federation on February 3, 2011 No. 19691)
The Ministry of Finance continues to bring PBU into compliance with international financial reporting standards.
From financial statements 2011
PBU 8/2010 “Estimated liabilities, contingent liabilities and contingent assets”
comes into force .
PBU 8/2010 complies with IFRS IAS-37.
Also, as of 2011 reporting, PBU 8/01 “Conditional facts of economic activity”
.
Application
PBU 8/2010 is applied by organizations ( except
credit institutions) that are legal entities under the legislation of the Russian Federation.
Just as in the case of PBU 8/01, small businesses, with the exception of
small businesses - issuers of publicly offered securities
have the right not to apply PBU 8/2010
.
PBU 8/2010 does not apply to:
A)
contracts under which,
as of the reporting date, at least one party to the contract has not
fully fulfilled its obligations.
The exception is contracts
, the inevitable costs of execution of which exceed the revenues expected from their execution (hereinafter referred to as
obviously unprofitable contracts
).
The contract is not obviously unprofitable
, the execution of which can be terminated by the organization unilaterally without significant sanctions;
b)
reserve capital
, reserves formed from the organization’s retained earnings;
c)
estimated reserves
;
G)
taken into account in accordance with
PBU 18/02 “Accounting for calculations of corporate income tax”
that affect the amount of corporate income tax payable in the following reporting or subsequent reporting periods.
Recall that reserve capital
formed by joint stock companies and LLCs.
Account 82 “Reserve capital” is intended to summarize information about the state and movement of reserve capital.
.
Deductions to reserve capital from profits are reflected in the credit of account 82 “Reserve capital” in correspondence with account 84 “Retained earnings (uncovered loss)”.
The use of reserve capital funds is accounted for as a debit to account 82 “Reserve capital” in correspondence with accounts: 84 “Retained earnings (uncovered loss)” - in terms of the amounts of the reserve fund allocated to cover the organization’s loss for the reporting year; 66 “Settlements on short-term loans and borrowings” or 67 “Settlements on long-term loans and borrowings” - in terms of amounts used to repay the bonds of the joint-stock company.
Valuation reserves include:
– reserves for reduction in the value of material assets ( account 14
);
– reserves for depreciation of financial investments ( account 59
);
– reserves for doubtful debts ( account 63)
.
In accordance with PBU 18/02 “Accounting for calculations of corporate income tax”, income and expenses that form accounting profit (loss) in one reporting period, and the tax base for income tax in another or other reporting periods, form temporary differences
.
Temporary differences in the formation of taxable profit lead to the formation of deferred income tax.
That part of the deferred income tax that should lead to a decrease (increase) in income tax payable to the budget in the following or subsequent reporting periods is recognized as a deferred tax asset (DTA) (deferred tax liability (DTL))
.
SHE
is reflected in account 09,
IT
is reflected in account 77.
Estimated liability
Estimated liability
is
an obligation
of an organization
with an uncertain amount and (or) deadline
.
A provision may arise
:
a)
from the norms
of legislative and other regulatory legal acts, court decisions, contracts;
b)
as a result of actions
by the organization that, because of established past practice or statements by the organization, indicate to others that
the organization accepts certain responsibilities
and, as a result, such persons have a reasonable expectation that the organization will fulfill such responsibilities.
A provision is recognized in accounting if the following three conditions are simultaneously met:
:
a)
the organization has an obligation resulting from past events
in its economic life, the fulfillment of which the organization cannot avoid. In the event that an organization has doubts about the existence of such an obligation, the organization recognizes a provision if, as a result of an analysis of all circumstances and conditions, including the opinions of experts, it is more likely than not that the obligation exists;
b)
a decrease in the economic benefits of the organization
necessary to fulfill the estimated liability is likely;
c)
the amount of the estimated liability can be reasonably
estimated.
Provisions for future expenses are recognized only when all three conditions are met
.
Let's take a closer look at all the conditions.
Obligation resulting from past events
The conditions for recognizing an estimated liability in relation to a past event in the economic life of the organization that were not met at one reporting date may be fulfilled as of subsequent reporting dates if
due to changes in legislative and other regulatory legal acts and (or) actions of the organization and (or) other persons,
the organization does not have the opportunity to avoid settlements associated with such an event
.
Example 1.
The management of the organization
approved a detailed plan for the upcoming restructuring of the organization's activities
, providing, in particular:
– the activities of the organization affected by the upcoming restructuring and the places where they are carried out;
– structural divisions, functions and approximate number of employees of the organization who will be paid compensation in connection with the severance of labor relations with them;
– expenses necessary for the upcoming restructuring of the organization’s activities;
– timing of the upcoming restructuring of the organization’s activities.
The management of the organization announced the existing plan to employees
and coordinates the plan with the workers' union.
Commitments regarding the upcoming restructuring of operations exist
, since the organization has obligations arising from past events of its activities, the fulfillment of which it cannot avoid.
A decrease in economic benefits as a result of the upcoming restructuring of the organization is quite likely. Estimated liabilities for the upcoming restructuring of the organization's activities are recognized
, if the amount of obligations can be reasonably estimated.
Example 2.
When repeating the conditions of Example 1,
the organization's management did not announce the existing plan to employees
.
An obligation in relation to the upcoming restructuring of the organization's activities does not arise because the organization does not have an obligation arising as a result of past events of its activities, the fulfillment of which it cannot avoid. Estimated liability
for the upcoming restructuring of the organization's activities
is not recognized
.
Reducing the economic benefits of the organization
A decrease in the economic benefits of an entity necessary to satisfy an obligation is considered probable if it is more likely than not that such a decrease will occur.
.
The likelihood of a decrease in economic benefits is assessed for each obligation separately, with the exception of
cases when, as of the reporting date, there are several obligations, homogeneous in nature and the uncertainty generated by them, which the organization evaluates together.
Moreover, despite the fact that a decrease in the economic benefits of the organization for each individual obligation may be unlikely, a decrease in economic benefits as a result of the fulfillment of the entire set of obligations may be quite probable.
If the organization has a joint obligation with other persons
, an estimated liability is recognized to the extent that there is a likelihood of a decrease in the economic benefits of the organization, subject to the conditions for recognition of an estimated liability in accounting.
Example 3.
The organization entered into an agreement for the supply of products it produces.
In accordance with the terms of the agreement, the expected revenue
is 1,500 thousand rubles.
(without VAT). The organization estimates that due to rising prices for raw materials, the cost of producing
the products provided for in the contract will amount to 2,000 thousand rubles. (without VAT). The contract has not yet begun to be executed. The penalty for failure to fulfill the contract will be 600 thousand rubles.
The contract is obviously unprofitable
, since the inevitable costs of its implementation (2000 thousand rubles) exceed the expected revenues from it (1500 thousand rubles), and to exit the contract the organization will have to pay a significant amount (600 thousand rubles) exceeding the possible net loss during the execution of the contract.
Provision is not recognized
Example 4.
The organization entered into an agreement for the supply of products it produces.
In accordance with the terms of the agreement, the expected revenue is 1000 thousand rubles. (without VAT). The organization estimates that due to rising prices for raw materials, the cost of producing the products provided for in the contract will amount to 1,200 thousand rubles. (without VAT). The contract has not yet begun to be executed. There are no sanctions for its termination
.
The contract is not obviously unprofitable
, since the organization can terminate it without paying sanctions. The corresponding provision is not recognized under the contract.
Example 5.
The organization has an approved program for the repair of fixed assets, which provides, in particular, for the frequency of repairs and planned costs for them.
The legislation does not provide for the obligatory nature of such repairs
. Information about this organization’s program has been published and is available to a wide range of people.
There is no obligation for future repairs of fixed assets
, since the organization does not have an obligation arising from past events of its activities, the fulfillment of which it cannot avoid.
An estimated liability
for future expenses for the repair of fixed assets of the organization
is not recognized
.
Example 6.
During the reporting period, the legislation on taxes and fees underwent significant changes.
The management of the organization considers it necessary to retrain the personnel
responsible for calculating taxes. The organization has an approved retraining program, which provides, in particular, planned expenses for it.
There is no obligation for future retraining of personnel
, since the organization does not have an obligation arising from past events of its activities, the fulfillment of which it cannot avoid.
The estimated liability for the upcoming retraining of personnel is not recognized in accounting
.
Estimated liabilities in relation to expected losses from the activities of the organization as a whole, or from certain types
or regions
of its activities
, divisions, types of products (works, services) and other factors
are not recognized in accounting
.
Example 7.
In accordance with the financial plan, in the upcoming reporting year the organization
is expected to make a loss in one of its areas of activity
. The management of the organization believes that the occurrence of this loss is quite likely.
A liability in respect of an expected loss does not arise because the entity does not have an obligation arising from past events of its activities that it cannot avoid. Estimated liability for expected loss is not recognized
.
Reserve for vacation pay in tax accounting
If a reserve for upcoming expenses for vacations is not created in tax accounting (Article 324.1 of the Tax Code of the Russian Federation), this may lead to a sharp increase in the company’s expenses in the month of mass vacations. This may result in an income tax loss. Therefore, in order to allocate expenses evenly in tax accounting, it makes sense to create this reserve.
note
If a company forms a reserve for vacation pay in tax accounting, then actually accrued vacation pay and related insurance premiums do not participate in the calculation of the tax base during the entire tax period. That is, expected costs are taken into account, not actual costs.
If a company decides to create this reserve, then in its accounting policy for tax purposes it must approve:
- maximum contribution amount;
- reservation method;
- monthly percentage of deductions.
Write-off of vacation reserve
The vacation reserve is closed when vacation pay is calculated. For example, in November 2021, employees Gold and Simutina went on vacation. Simutina has a rolling vacation for the month of December.
Fig.9 Created holidays
After calculating and reflecting wages in regulated accounting, a new tab will appear in the document “Reflection of wages in regulated accounting” - “Payment of vacations at the expense of estimated obligations”, in which these vacations will be reflected.
Fig. 10 Accounting for vacations created through estimated liabilities
Simutina's vacation is divided into 2 parts, corresponding to two months.
We will modify 1C: ZUP to suit your needs for accounting for vacation reserves
Reports on vacation reserves
Reports on estimated liabilities can be easily found in the “Salaries” section by typing the word “Reserve” in the search bar.
Fig. 11 Reports on estimated liabilities and vacation reserves
The report “Balances and turnover of vacation reserves” shows “collapsed” data on estimated liabilities.
Fig. 12 Report “Balances and turnover of vacation reserves”
The “Employee Leave Reserves” report shows the reserves in detail.
Fig. 13 Report “Leave reserves for employees”
The following report, “Calculation reference “Vacation reserves,” illustrates in detail the calculation for one month.
Fig. 14 Report “Calculation reference “Vacation reserves”
The report displays the same data that is calculated in the “Vacation Reserves” document on the “Calculation of Vacation Obligations and Reserves” tab. The only difference is that, depending on the report settings, we see data from either BU or NU.
Implementation of 1C:ZUP
An integrated approach to the calculation and accrual of vacation reserves, the formation of estimated liabilities
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Integration with 1C:ZUP
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Limit amount of deductions
The maximum amount of contributions to the reserve is the amount of the reserve that the organization plans to form in the reporting year. It includes:
- the amount of vacation pay calculated in accordance with Decree of the Government of the Russian Federation dated December 24, 2007 No. 922;
- insurance contributions, including contributions for compulsory social insurance in case of temporary disability and in connection with maternity, accrued on vacation pay;
- contributions for compulsory insurance against accidents at work and occupational diseases accrued on vacation pay.
Monthly percentage of deductions
The percentage of contributions to the reserve is calculated using the formula.
Formula for calculating the percentage of contributions to the reserve
The estimated annual amount of labor costs is determined based on all payments provided for by the wage system, participating in the calculation of average earnings, made in favor of workers under employment contracts, and the amount of contributions for all types of compulsory social insurance (excluding vacation pay for the year).
The amount of monthly deductions depends on the amount of actual labor costs incurred during the month. It is calculated using the formula.
Formula for calculating the amount of monthly contributions to the reserve
EXAMPLE 2. RESERVE FOR PAYMENT OF HOLIDAYS IN TAX ACCOUNTING
Blues LLC calculates the reserve for payment of vacations based on planned indicators: - estimated annual amount of expenses for vacations - 100,000 rubles; 30,000 rub. (100,000 rubles × 30%); - the amount of insurance contributions for compulsory social insurance against accidents at work and occupational diseases - 200 rubles. (100,000 rubles × 0.2%); - estimated amount of labor costs - 1,000,000 rubles. Every month, the accountant will create a reserve for vacation pay in tax accounting in the amount of 13.02% of the amount of actual expenses accrued for the month wages ((100,000 rub. + 30,000 rub. + 200 rub.) : 1,000,000 rub. × 100%).
