Security deposit in accounting

What is a security deposit?

In a broad sense, a security payment is an amount of money that the obligated party to the contract transfers to the authorized party in order to ensure the fulfillment of its obligations under the relevant contract or to compensate for possible losses of the authorized party.
In this context, a security payment can be placed on a par with a pledge, a deposit and other security mechanisms (clause 1 of Article 329 of the Civil Code of the Russian Federation, letter of the Ministry of Finance dated March 24, 2017 No. 03-03-07/17197). In the narrow sense, in accordance with the provisions of paragraph 1 of Art. 381.1 of the Civil Code of the Russian Federation, a security payment should be understood as a sum of money that is transferred by the obligated party to the contract to the authorized party in order to secure a monetary obligation.

Moreover, such an obligation may arise in the future, and its fulfillment (in whole or in part) through the security payment is carried out when the circumstances established by the contract arise. If such circumstances do not occur (or if the obligated party fulfills the terms of the agreement), then the amount of the security payment is returned to the obligated party, unless otherwise provided by the agreement (Clause 2 of Article 381.1 of the Civil Code of the Russian Federation).

Separate agreements between the parties may regulate the replenishment or, conversely, partial return of the security deposit amounts under certain circumstances.

Let us study how accounting is carried out for transactions reflecting the transfer of amounts of money on account of a security deposit from the obligated party to the contract to the authorized party. Records will be kept by both parties to the legal relationship.

At the same time, accounting for the simplified tax system and the operating tax system will differ.

Examples of using a security deposit

Example 1 - using a security deposit to improve payment discipline

A lease agreement was concluded in relation to the warehouse, according to which, for late transfer of rent payment, interest is charged on the amount of the payment at a rate of 30% per annum. It turns out that the tenant is simultaneously subject to two monetary obligations - a fee for the use of the rented premises and interest for late deposit of funds into the landlord's account (fine). That is, at the expense of the security deposit, the warehouse owner has the right to repay interest (with notification) without affecting the main debt. This clause of the lease agreement increases the payment discipline of the warehouse tenant.

Example 2 - using a security deposit for “lending” at the expense of the tenant

A vehicle lease agreement was concluded between the parties, the provisions of which provided for the transfer of a security deposit in the amount of 50% of the market value of the vehicle. The purpose of making a payment by the tenant is to insure the landlord against possible losses if the tenant gets into an accident and damages the car. The essence of this payment is interest-free lending to the owner of the vehicle, since the security payment is not income and, accordingly, is not subject to personal income tax (NDFL).

How to calculate a security payment under the simplified tax system: entries in the accounting of the authorized party

First, let's look at how the authorized party (for example, the seller of goods) reflects information about the security payment regarding the receipt of monetary compensation in accounting entries.

Example 1

Trading-Consulting LLC, as a supplier of vegetables, entered into an agreement with Leasing-Banking LLC. According to the agreement, the buyer of vegetables made a security payment. Trading-Consulting LLC successfully supplied vegetables, and Leasing-Banking LLC paid for the delivery on time. The vegetable supplier returned the security deposit to the buyer because the latter fulfilled the obligations established by the contract.

In the specified legal relationship with the use of a security payment, the accounting entries under the simplified tax system will be as follows:

• Dt 51 Kt 62/OP (now and in all cases further, unless otherwise indicated, subaccount for the counterparty, in this case Trading-Consulting LLC) - receipt of payment;
• Dt 62 Kt 51 - return of payment to the counterparty.

Example 2

Trading-Consulting LLC, as a supplier of vegetables, entered into an agreement with Vending-Lending LLC. The buyer made a security deposit. Trading-Consulting LLC supplied vegetables, but Vending-Lending LLC did not pay for the supplies due to financial difficulties. The security payment was not returned to the buyer and offset against its obligations to the supplier.

In this scenario, the following postings will be applied:

• Dt 51 Kt 62/OP - receipt of payment;
• Dt 62/OP Kt 62 - the security payment is counted as payment for supplies;
• Dt 62 Kt 90.1 - credited OP is included in revenue (“on payment” for the simplified tax system).

Now - about the postings used by the obligated party.

Accounting for a security payment by the obligated party under the simplified tax system: entries

Leasing-Banking LLC, within the framework of the agreement on the application of a security deposit, will select the following entries in the accounting registers:

• Dt 60/OP (subaccount again for the counterparty) Kt 51 - payment transferred to the counterparty;
• Dt 51 Kt 60/OP - the counterparty returned the payment.

Vending-Lending LLC will record the following entries in its registers:

• Dt 60/OP Kt 51 - payment transferred to the counterparty;
• Dt 41 Kt 60 - goods supplied by the counterparty are accepted onto the balance sheet;
• Dt 60 Kt 60/OP - payment is credited as payment for supplies.

IMPORTANT! As an alternative to accounts 60 (when accounting for transactions with a supplier) and 62 (when accounting for transactions with a buyer), account 76 can be used for OP. In this case, it also makes sense to open a subaccount for the counterparty.

Postings are used according to a different scheme if the parties work on OSN. This is mainly due to the fact that they become VAT payers.

Security payment for a posting in accounting (using an example)

Important! When a security payment is transferred, the entries must be reflected in a separate sub-account in which settlements are made for the main obligation provided for in the agreement.

A lease agreement has been signed for the workshop. For late transfer of rent to the owner, the tenant will be charged a penalty interest at the rate of 30% per annum. The lessor who has received the security deposit has the right to use it to pay off interest on late rent payments. VAT is not paid on the amount of the security deposit. The workshop owner's accountant will make the following entries:

OSN: postings of the authorized party for a security payment including VAT

Trading-Consulting LLC, if it is agreed that it works on the OSN, can apply postings with the allocation of VAT. This must be done if the payment is applied in practice, that is, counted as payment for supplies (letter from the Department of Tax and Customs Tariff Policy of the Ministry of Finance of Russia dated November 3, 2015).

When interacting with Leasing-Banking LLC, there will be no reason to calculate VAT. But in the course of cooperation with Vending-Lending LLC, the tax will be allocated. In this case, the vegetable seller will use the following entries:

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• Dt 51 Kt 62 (76)/OP - payment accepted;
• Dt 62(76)/OP Kt 62 - payment is credited as payment for the goods;
• Dt 62 Kt 90.1 - revenue for the goods is reflected (in the amount of the offset security payment);
• Dt 90.3 Kt 68 - VAT is charged on the amount of revenue.

In turn, the buyer of goods on the OCH will also apply separate postings.

Obligated party in case of OSN: postings on security deposit

In this case, it does not fundamentally matter whether the security deposit was used to pay for supplies or not. The obligated party - both Leasing-Banking LLC, which returned its security payment, and Vending-Lending LLC, which was forced to pay for vegetables through a security payment - will only deal with input VAT on the goods.

For these purposes, both companies will use the following postings:

• Dt 60 (76)/OP Kt 51 - security payment issued to the counterparty;
• Dt 41 Kt 60 - goods are placed on the balance sheet (amount excluding VAT);
• Dt 19 Kt 60 - VAT presented by the counterparty is taken into account (at the established rate on the cost of goods);
• Dt 60 Kt 60(76)/OP - the security payment is counted as payment for the goods;
• Dt 68 Kt 19 - previously recorded input VAT from the counterparty is accepted for deduction.

It is noteworthy that the transactions considered when applying a security payment by counterparties are very similar to those that characterize the use of another security payment instrument - a deposit.

Earnest money is a sum of money transferred by the buyer to the seller to guarantee the transaction. If the deal fails due to the fault of the buyer, then the seller keeps the deposit, and if he is to blame, he returns to the buyer an amount twice the deposit (clause 2 of Article 381 of the Tax Code of the Russian Federation). If this legal structure is not applied in the contract, then the deposit is considered an ordinary advance, that is, part of the prepayment for the supply (clause 3 of Article 380 of the Tax Code of the Russian Federation).

Let's study what transactions are used when making a deposit and how they differ from those discussed above.

Postings for a security deposit and a deposit: comparison

The main practical differences between a deposit and a security deposit:

1. The possibility of withholding the amount of the deposit by the supplier who did not deliver anything in fact.

If such withholding occurs, the supplier reflects this fact with postings (let’s agree that the supplier pays VAT):

• Dt 51 Kt 62/Z - deposit received;
• Dt 62/Z Kt 91 - the deposit is included in other income;
• Dt 91 Kt 68 - VAT is charged on the amount of the deposit.

Thus, the postings do not contain the subject of payment (goods) and the fact that VAT has been charged on it: the amount of the deposit is included in other income, and not in revenue (as with a security deposit). Otherwise, the postings are used with the same synthetic accounts as when reflecting the application of the security deposit in accounting.

1. Possibility for the buyer to receive double the amount of the deposit.

In such a situation, the buyer will use the following entries:

• Dt 60(76) Kt 51 - the deposit is transferred to the supplier;
• Dt 51 Kt 60(76) - the deposit was received back with a “penalty” amount;
• Dt 60(76) Kt 91.1 - “penalty” excess over the initial deposit is included in other income.

Here again we are talking about the appearance of the amount included in other income, separated from the one that corresponds to the original amount of the deposit that is returned. It is noteworthy that, as in the case of an unused security deposit, VAT is not reflected in the transactions, since the additional income of the buyer in this case is represented by a penalty that is not related to payment for goods (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 05.02.2008 No. 11144/07 on case No. A55-3867/2006-22).

Another noteworthy nuance is the use of supporting documents as part of the accounting of the payment in question.

Accounting for security payments

Author: Olga Nuyanzina Expert on accounting and taxation
Since June 1, 2015, the concept of a security payment as a way to ensure the fulfillment of obligations has been introduced into the Civil Code of the Russian Federation. Although the concept itself was officially introduced only from this date, in practice it was used earlier. Let us consider in more detail the procedure for reflecting security payments in the accounting records of each party to the agreement.

Security payment is a sum of money that one party to the contract pays in favor of the other as security for the fulfillment of monetary obligations, including the obligation to compensate for losses or pay a penalty in case of violation of the contract, as well as other obligations provided for in paragraph 1 of Art. 381.1 Civil Code of the Russian Federation.

If circumstances stipulated by the agreement occur, the amount of the security payment is counted towards the fulfillment of the corresponding obligation, and in the event of failure to occur within the period stipulated by the agreement of the corresponding circumstances or termination of the secured obligation, the security payment is subject to return, unless otherwise provided by agreement of the parties1.

The basis for recording the transactions in question is an agreement containing a condition for the payment of a security deposit and the grounds for its return or offset. The accountant will also need an extract from the organization’s current account to confirm the receipt or debit of the security payment.

Other transactions related to these calculations are confirmed by an accounting certificate. The mandatory form of this document is not established by law. Therefore, it must be developed independently and approved by order of the head of the organization as an annex to the accounting policy2. An accounting certificate is issued when reflecting and writing off the amounts of the security payment in an off-balance sheet account, as well as when offsetting the security payment against the repayment of the obligation. Let's take a closer look at accounting options using examples.

Example 1.

Let's consider a situation where the contract establishes an obligation to pay a security deposit that guarantees the fulfillment of obligations. It is stipulated that if during the term of the contract the procedure for payment of rental payments is not violated, the security deposit will be returned.

Accounting for security deposit received

Under the specified conditions, the amount of the security payment received by the organization until it is offset against the fulfillment of the obligation represents a payable to the counterparty, since it is subject to return provided that the latter properly fulfills its obligations under the contract. Thus, on the date of receipt of the security payment, its amount is not included in income, since there is no increase in the economic benefits of the organization, that is, the receipt in question does not correspond to the concept of income given in clause 2 of the Accounting Regulations “Income of the Organization” PBU 9/993 .

To reflect in the accounting of settlements for security payments, an organization can open a separate sub-account to account 76, which must be enshrined in the accounting policy4. In our example, this will be subaccount 76-5 “Calculations for security deposit”.

Receipt of the security payment is reflected in accounting on the basis of the agreement and the bank statement on the current account with the following entries:

• Debit 51 “Current accounts”

• Loan 76-5 “Calculations for security payment”.

At the same time, the amount of the payment received until it is returned on the basis of an accounting certificate is reflected in the security received in the debit of off-balance sheet account 008 “Security for obligations and payments received.”

On the date of return of the security payment in connection with the fulfillment by the counterparty of its obligations, there is no reduction in the economic benefits of the organization, that is, no expense arises in relation to clause 2 of the Accounting Regulations “Expenses of the Organization” PBU 10/995. The organization's accounting records the repayment of accounts payable to the counterparty.

The return of the security deposit on the basis of the agreement and the bank statement on the organization’s current account is reflected in accounting as follows:

• Debit 76-5 “Settlements for security deposit”

• Credit 51 “Current accounts”.

At the same time, the amount of collateral for the credit of account 008 “Collateral for obligations and payments received” is written off from the off-balance sheet account based on the accounting certificate.

Accounting for issued security payments

The issued security payment also does not lead to a decrease in the economic benefits of the organization and, accordingly, is not recognized as an expense, but is reflected in accounting as a receivable6.

The amount of the security deposit paid can be reflected in the accounting records using the following entry:

• Debit 76-5 “Settlements for security deposit”

• Credit 51 “Current accounts”.

At the same time, this amount of the security payment is reflected in the debit of off-balance sheet account 009 “Securities for obligations and payments issued.”

When the security deposit is returned in the event of proper fulfillment of obligations under the contract in accounting

the following entries are made:

• Debit 51 “Current accounts”

• Loan 76-5 “Calculations for security payment”.

Example 2.

Let’s say that in the situation under consideration, during the term of the contract, the customer (tenant, buyer) commits a violation of the procedure or terms of payment, which leads to the obligation to pay a fine in the amount stipulated by the contract. Under the terms of the agreement, the executor (lessor, seller) has the right to withhold the amount of the fine from the amount of the security payment, and is obliged to return the rest of the security payment.

Accounting with the performer

In this situation, a claim is filed against the customer, and in the account of the contractor, settlement operations for the claim are reflected only on the date the debtor acknowledged the claim7.

Accordingly, the primary document for this operation will be a document confirming such consent. For example, this could be a letter or notice from the tenant, signed by his manager.

Then, on the date of receipt of the relevant document, the organization reflects other income 8:

• Debit 76-2 “Calculations for claims”

• Credit 91-1 “Other income”.

The deduction of the amount of the recognized fine at the expense of the amount of the security payment on the basis of the agreement and the accounting certificate-calculation is reflected in the accounting by the following entries:

• Debit 76-5 “Settlements for security deposit”

• Credit 76-2 “Calculations for claims.”

It should be taken into account that the amount taken into account as collateral is also subject to a commensurate reduction.

Loan 008 “Securities for obligations and payments received” - the amount of the security payment aimed at repaying the debt under the claim is written off from the off-balance sheet account.

Upon termination of the contract, the security payment is returned to the tenant minus the withheld fine, which is reflected by the posting:

• Debit 76-5 “Settlements for security deposit”

• Credit 51 “Current accounts”.

The corresponding amount is also written off to account 008 “Securities for obligations and payments received.”

Accounting with the customer

On the date of recognition of the claim received from the contractor, the customer records other expenses in the accounting records:

• Debit 91-2 “Other expenses”

• Credit 76-2 “Calculations for claims.”

And then reduces the amount of receivables for the security payment by the amount of withheld penalties:

• Debit 76-2 “Calculations for claims”

• Loan 76-5 “Calculations for security payment”.

At the same time, the offset amount of the security payment is written off against the credit of account 009 “Securities for obligations and payments issued.”

Please note that not the entire amount of security is subject to write-off, but only that part that is aimed at paying off penalties.

Example 3.

It is possible that the amount of the security deposit under the terms of the agreement is not refundable, but is counted towards the repayment of obligations under the agreement, for example, towards the last rent payment under the lease agreement.

In such a situation, the security payment performs not only a security, but also a payment function. Therefore, the payment of a security deposit in such a situation can also be considered as an advance payment under the contract. However, prepayment in accounting is also not recognized as either income or expense of the organization9.

When the security payment is offset against the repayment of obligations under the contract, an internal entry is made in the analytical accounts of account 76 “Settlements with various debtors and creditors.”

Offsetting the security payment against the repayment of obligations under the contract is also the basis for writing off the security amount from the off-balance sheet account, for the customer - under the credit of account 009 “Securities for obligations and payments issued”, for the contractor - under the credit of account 008 “Securities for obligations and payments received”.

The article discusses the features of accounting for security payments, which depend on the terms of the contract and the procedure for their use.

The amendments made to the provisions of the Civil Code of the Russian Federation did not make significant changes to accounting, but clearly established the functions of the security payment.

Now security can be recognized as an advance payment only if there are appropriate conditions in the contract.

________________________________________________________________________________________________________________

1 Clause 1, 2 Art. 381.1 Civil Code of the Russian Federation. 2 Parts 4 tbsp. 9 of Law No. 402-FZ. 3 Order of the Ministry of Finance of Russia dated May 6, 1999 No. 32n. 4 Clauses 9, 10 Regulations on accounting and financial reporting, approved. By Order of the Ministry of Finance of the Russian Federation dated July 29, 1998 No. 34n. 5 Order of the Ministry of Finance of Russia dated May 6, 1999 No. 32n. 6 Clause 3, 16 PBU 10/99. 7 P. 16 PBU 9/99. 8 Clause 7, 10.2 PBU 9/99.

9 P. p. 3, 16 PBU 10/99, p., p. 3, 12 PBU 9/99.

Category: Banks

Security payment in accounting: we use supporting documents

When reflecting the offset as payment for the goods of the security payment in accounting, a special supporting document is used - an act of agreement of the parties to make the appropriate offset. The act can reflect:

• information about the agreement under which the security payment is applied;
• information about the reasons for applying the security payment (for example, about the occurrence of financial difficulties with the obligated party when making regular payment);
• the fact that the document is drawn up on the basis of the provisions of Art. 381.1 Civil Code of the Russian Federation;
• the fact that the document is used as an instrument guaranteeing payment (and therefore does not imply the calculation of VAT on the security deposit by default, but only when it is subsequently offset against payment for goods).

The procedure for drawing up the act in question may be provided for by the provisions of the agreement itself.

Otherwise, regarding the use of supporting documents, everything is quite standard: in necessary cases, the contract itself, accounting statements, bills, invoices are used as such (you must remember that VAT payers do not issue them to counterparties who do not themselves pay this tax) .

It will also be useful to familiarize yourself with the nuances of tax accounting for the payment in question.

Security deposit in the tenant's account

Tax accounting.

The issue of tax accounting for a security deposit is relevant for a tenant who applies the tax object “income reduced by the amount of expenses.”

The situation is almost the same as discussed above. If there is a condition for the return of the security payment at the end of the contract, it cannot be taken into account by the tenant when calculating the base for the “simplified” tax due to the fact that it is not named in the list of expenses given in the Tax Code (clause 1 of Article 346.16 of the Tax Code of the Russian Federation).

At the same time, we note that the tenant should not take this amount into account as income at the time of return (letter of the Ministry of Finance of Russia dated December 12, 2008 No. 03-11-04/2/195).

If, according to the terms of the agreement between the tenant and the lessor, the security payment is subsequently taken into account as part of the rent for any period, then it will be reflected in the ledger of expenses and income as an expense associated with the rent for this period (subparagraph 4 Clause 1 of Article 346.16 of the Tax Code of the Russian Federation; letters of the Ministry of Finance of Russia dated 04/03/2015 No. 03-11-11/18801, dated 06/28/2011 No. 03-11-06/2/99).

We will also consider accounting for the tenant's security deposit further using an example.

Example

According to the lease agreements, the company transfers security payments to lessor 1 in the amount of 10,000 rubles using the simplified tax system, and to lessor 2 in the amount of 15,000 rubles. At the same time, the agreement with lessor 1 states that at the end of its validity period the security payment will be returned to the company. And according to the agreement with landlord 2, the security deposit will be offset against the rent.

Settlements with the lessor 1:

DEBIT 76 subaccount “Security payment” CREDIT 51 - 10,000 rubles. — a security payment has been made to secure obligations under the lease agreement;

DEBIT 51 CREDIT 76 subaccount “Security payment” - 10,000 rubles. — the security deposit is returned at the end of the lease agreement.

Settlements with the lessor 2:

DEBIT 76 subaccount “Security payment” CREDIT 51 - 15,000 rubles. — a security payment has been made to secure obligations under the lease agreement;

DEBIT 76 subaccount “Rent” CREDIT 76 subaccount “Security payment” - 15,000 rubles. - in accordance with the act of offset of the previously listed security payment, it was offset against the rent as of the date of drawing up the act;

DEBIT 44 CREDIT 76 “Rent” - 15,000 rubles. — accounting for the security payment as part of the rent as an expense on the date of drawing up the act of offset of the previously listed security payment.

Tax accounting of a security payment: nuances

When maintaining tax records of a security payment, you need to keep in mind that:

1. The payment received by the supplier is included in his income (and the buyer’s expenses) only upon offset as payment for the goods (letter of the Ministry of Finance of Russia dated March 24, 2017 No. 03-03-07/17197).

The supporting document here is the act that we mentioned above.

1. The contract may provide that the security deposit is not returned to the buyer until the end of the entire contract. For example, if several deliveries are planned over several periods. Payment made before the first delivery performs a guarantee function for subsequent deliveries. At the same time, it remains a security payment until it is used in calculations (it does not fall into the tax base for VAT and income).

In practice, this function can be performed:

• according to the situation - when the buyer, due to circumstances, may not have the funds to pay for all deliveries on time;
• when circumstances stipulated by the contract arise (for example, when the contract stipulates that deliveries in an amount exceeding the established amount must be accompanied by a mandatory offset of the security deposit).

Accordingly, the payment is included in the income (expenses) of the party in the reporting period in which the act of offsetting the payment was drawn up (depending on the situation or in a contractual manner).

Accounting for security deposit from the lessor

Tax accounting.

If the agreement stipulates the condition for the return of the security payment after the expiration of the lease term, then the lessor does not have income taken into account when calculating the “simplified” tax base.
This conclusion can be drawn from the provisions of the Tax Code (subclause 2, clause 1, article 251, clause 1.1, article 346.15 of the Tax Code of the Russian Federation). If the agreement contains a condition on the offset of the security payment against the rent, then the tenant and the lessor will have to draw up an act on its offset. In this case, the lessor should reflect the amount of the security deposit as income in the book of income and expenses on the date of drawing up the act (letter of the Ministry of Finance of Russia dated December 17, 2015 No. 03-11-06/2/73977, dated June 22, 2015 No. 03-11-06 /2/36071, dated October 28, 2013 No. 03-11-06/2/45451, dated April 8, 2013 No. 03-11-06/2/11372, Federal Tax Service of Russia dated December 30, 2014 No. GD-4-3/ [email protected] , Federal Tax Service of Russia for Moscow dated 02.09.2010 No. 20-14/2/ [email protected] ).

Accounting.

Let's look at the landlord's accounting procedure for a security deposit using an example.

Example

The company, using the simplified tax system, entered into lease agreements with tenant 1 and tenant 2. From the first it received a security payment in the amount of 10,000 rubles, from the second - 15,000 rubles. At the same time, the agreement with tenant 1 stipulates that at the end of its validity period the security deposit will be returned, and according to the agreement with tenant 2 the security payment will later be offset against the rent.

Settlements with tenant 1:

DEBIT 51 CREDIT 76 subaccount “Security payment” - 10,000 rubles. — a security payment was received from tenant 1 to secure obligations under the lease agreement;

DEBIT 76 subaccount “Security payment” CREDIT 51 - 10,000 rubles. — the security deposit is returned at the end of the lease agreement.

Settlements with the tenant 2:

DEBIT 51 CREDIT 76 subaccount “Security payment” - 15,000 rubles. — a security payment was received from tenant 2 to secure obligations under the lease agreement;

DEBIT 76 subaccount “Security payment” CREDIT 76 subaccount “Rent” - 15,000 rubles. - in accordance with the act of offset of the previously listed security payment, the security payment was offset against the rent on the date of drawing up the act;

DEBIT 76 subaccount “Rent” CREDIT 91 subaccount “Other income” - 15,000 rubles. — the security payment received is reflected in the rent as income in accordance with the act as of the date of its preparation.

***

How to accrue a security payment using accounting entries and how to keep tax records of transactions for the payment in question depends on the status of the party to the agreement (it can be entitled or obligated), the tax regime, and the results of the transaction. If a security deposit is applied in practice to pay for supplies, then the recipient of the payment, who is a VAT payer, must accrue and pay VAT and reflect it in accounting.

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