An organization may engage third parties to process materials. This operation is called transfer of raw materials for processing. In this case, the organization that owns the materials will be the customer, and the processing organization will be the performer of the work. Relations between the customer and the contractor are regulated by Chapter 37 of the Civil Code of the Russian Federation.
After processing, the performing organization is obliged to transfer the result to the customer (Clause 1, Article 703 of the Civil Code of the Russian Federation). At the same time, the remaining unused materials are transferred (Clause 1, Article 713 of the Civil Code of the Russian Federation).
Documenting
When transferring materials for processing to the contractor, issue an invoice in form No. M-15. In the documents, indicate that the materials were transferred for processing on a toll basis.
After processing the materials, the performing organization must submit the following documents:
- invoice in form No. M-15;
- report on the consumption of materials (clause 1 of article 713 of the Civil Code of the Russian Federation). This document must contain information about materials received and not used for production, the quantity and range of materials (products) received. It also indicates how much waste was received, including returnable waste. The surplus must be returned to the seller, unless otherwise provided by the contract;
- act of acceptance and transfer of work for the cost of processing work (Article 720 of the Civil Code of the Russian Federation).
When receiving materials from processing, the customer must issue a receipt order (Form No. M-4). If finished products are obtained as a result of processing materials, issue an invoice for the transfer of finished products to storage locations (Form No. MX-18).
Materials processing 1c
Materials recycling 1c is an operation that occurs when your organization sends materials for recycling and then receives them back.
To reflect these operations in 1C Accounting 8 edition 2, two documents are used: “Transfer for processing” and “Receipt from processing”. Both documents are generated from the “Production” tab, “Transfer for processing” tab.
Let's take a closer look at how the processing of 1c materials is reflected in a specific example.
We will generate the first document “Transfer for processing” for the transfer of material “components”. We select the document we need. A journal opens called “Transfer of Goods.” In this journal, click on the “add” button. Next, the program prompts you to select the type of document operation. Since we will be transferring materials, we select the first item on the list, “Transfer of raw materials for processing.” In the new document, we select and add the counterparty, contract, warehouse and materials that are transferred for processing. In our example, these are “components”. Please note that materials to be transferred must already be capitalized and entered into the “Materials” folder.
Next, we indicate the amount of materials sent for recycling. On the “Advanced” tab, select the consignor and consignee. Then we carry out the document. The printed form here will be the “Invoice for the release of materials to the third party”, form M-15. A posting is generated according to the document: Debit 10.07 Credit 10.01.
The next document that reflects the processing of 1c materials is “Receipt from processing”. Using the “add” button we will create a new document. We select the counterparty to whom the material was given for processing, an agreement and a warehouse where the material will be returned. The processing of 1c materials in this document is reflected only on two tabs. The third tab is the cost account and the fourth is materials. The remaining bookmarks for this operation are not filled in. On the “Cost Account” tab, select the account where the materials will be written off. In our example, 20.01. Here we indicate the cost division and item group. Next, go to the “Materials” tab. We select the material that is returned from recycling and indicate its quantity. The invoice and cost item are filled in automatically.
If the processing of 1C materials is not common at your enterprise, and other operations with materials, such as receipt and write-off for production, occur constantly, I offer my video course “Professional 1C Accountant”, in which you will find answers to all these questions. And about the processing of materials in the 1C Accounting program 8th ed. 3.0 see here.
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Accounting: transfer and processing results
When materials are transferred for processing on a toll basis, sales do not occur, since ownership remains with the organization that ordered the work (Clause 1, Article 220 of the Civil Code of the Russian Federation). Therefore, do not write off the cost of materials from the balance sheet of the customer organization, but take them into account in a separate subaccount 10-7 “Materials transferred for external processing” (clause 157 of the Methodological Instructions approved by Order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n):
Debit 10-7 Credit 10
– materials were transferred for processing.
Further accounting of materials sent for processing depends on the result of processing. Accounting rules vary depending on the following cases:
- the result of processing is a finished product;
- recycling only prepares the material for use;
- recycled materials are used in the manufacture (creation) of fixed assets.
If, as a result of processing, a finished product is obtained, then the processing costs form the cost of the finished product (clause 5 of PBU 10/99). Reflect this operation like this:
Debit 20 (23...) Credit 10-7
– materials from processing are returned and they are taken into account in the cost of finished products;
Debit 20 (23…) Credit 60
– the cost of processing work is taken into account in the cost of finished products.
If materials are prepared for use, processing costs increase the cost of these materials (clauses 68, 71 of the Methodological Instructions approved by Order of the Ministry of Finance of Russia dated December 28, 2001 No. 119n). Reflect this operation like this:
Debit 10 Credit 10-7
– materials from processing were returned;
Debit 10 Credit 60
– the cost of processing work is taken into account in the cost of materials.
If materials obtained from processing are used in the creation (manufacturing) of fixed assets, processing costs form the initial cost of these fixed assets (clause 8 of PBU 6/01). Reflect this operation like this:
Debit 08 Credit 10-7
– materials from processing are returned and they are taken into account in the initial cost of fixed assets;
Debit 08 Credit 60
– the cost of processing work is taken into account in the initial cost of fixed assets.
Regulatory regulation
Toll processing is the performance of work on the production of products from the customer’s material under a contract (Article 702, Article 713 of the Civil Code of the Russian Federation).
BOO. When transferred for processing, a transfer of ownership does not occur: the materials continue to be accounted for on the customer’s balance sheet and are reflected in account 10.07 “Materials transferred for processing to third parties” (clause 157 of the Methodological guidelines for accounting for inventories, approved by Order of the Ministry of Finance of the Russian Federation dated December 28 .2001 N 119n, chart of accounts 1C).
Processing services are taken into account as part of expenses for ordinary activities (clause 8 of PBU 10/99).
The cost of materials and services of the processor is included in the cost of manufactured products (clause 6 of PBU 5/01).
WELL. Processor services are taken into account as part of material costs (clause 6 of Article 254 of the Tax Code of the Russian Federation).
VAT. The transfer of raw materials to a processor is not a sale and is not subject to VAT (Article 38, Article 146 of the Tax Code of the Russian Federation).
VAT on processor services is deductible if the requirements are met (Article 171, Article 172 and Article 169 of the Tax Code of the Russian Federation):
- organization - VAT payer;
- goods (work, services) are intended for activities subject to VAT, including for resale;
- goods (work, services) are accepted for accounting;
- A properly executed invoice is available.
Let's consider accounting for customer-supplied raw materials in 1C 8.3.
BASIC: income tax
The procedure for accounting for the costs of processing materials on a toll basis for taxation depends on whether they form the initial cost of fixed assets or not.
If the cost of processing costs forms the initial cost of fixed assets, write off expenses (in the form of the cost of processing work and in the form of the cost of the materials themselves) through depreciation. For more information, see How to calculate depreciation in tax accounting.
If processing costs do not participate in the formation of the initial cost of fixed assets, apply the following rules. When calculating profit tax, an organization can take into account in material expenses the costs of processing materials (performing part of the production processes) by another organization (subclause 6, clause 1, article 254 of the Tax Code of the Russian Federation). The date of recognition of expenses in the form of the cost of processing work will be:
- with the accrual method, the date of signing the acceptance certificate for the work performed (paragraph 2, paragraph 2, article 272 of the Tax Code of the Russian Federation);
- with the cash method, the date of repayment of the debt to the executing organization (subclause 1, clause 3, article 273 of the Tax Code of the Russian Federation).
The date of recognition of expenses in the form of the cost of materials transferred for processing also depends on which method of calculating income tax the organization uses:
- accrual method;
- cash method.
Recognition of expenses using the accrual method
When calculating income taxes using the accrual method, apply the following rules. The cost of materials transferred for processing on a toll basis can be taken into account in expenses at the time they are written off for production in the part used in it at the end of the month (clause 2 of Article 272, clause 5 of Article 254 of the Tax Code of the Russian Federation). In this case, the moment of transfer for processing is equivalent to the transfer of materials into production, since processing is one of the stages of production.
If processing costs are classified as direct, then they can be taken into account only after the work is completed (accepted by the customer). Such rules are established by paragraph 2 of Article 318 of the Tax Code of the Russian Federation.
Situation: should materials transferred for processing be taken into account as part of work in progress when calculating income tax?
Answer: yes, it is necessary.
This is due to the fact that the obligation to distribute direct expenses on a monthly basis is established for all production organizations (paragraph 3, paragraph 1, article 319 of the Tax Code of the Russian Federation). And no exceptions are provided for organizations that transfer materials for recycling.
Documentation of the amount of processed materials and unprocessed residue can be done with a report from the recycler. Such reports must contain data in quantitative terms on the consumption of raw materials and materials, on the availability of products that are partially ready.
This point of view is also shared by the tax department (see, for example, letter of the Department of Tax Administration of Russia for Moscow dated August 17, 2004 No. 26-12/54019).
Advice: include in the agreement on the transfer of raw materials to be supplied a condition on the submission by the processing organization of monthly reports on the balances of work in progress. Such reports must contain data on the consumption of raw materials and materials, on the availability of products that are partially ready. The submission of reports by the processor will allow the seller to confirm the validity of writing off direct expenses during a tax audit.
Transfer of raw materials for processing to a third-party manufacturer
Task: to arrange the transfer of raw materials - lumber and receipt of finished products - a wooden pallet from the Manufacturer
We have 10 m3 of lumber which makes 200 pallets
Let's create 2 product items - Pallet and Lumber from which it will be made.
In the Pallet card, for the convenience of subsequent operations, we can create a specification indicating the material consumption.
1. fill in the Name to distinguish the specifications - if we ourselves produce there will be a more complete specification with processing operations, etc., in this case the specification is simplified.
2. fill out the Composition tab - in it we indicate material reserves (Materials, Assembly, Unit) and intangible services of third-party organizations (Consumed).
3. select the type of stock
– material, material stock used in the production process
- assembly, part of a finished product produced at this enterprise as part of another production process
- a set of nomenclature items, reflected in accounting as different items, but used in this process as one block - node. For example: a “flooring” unit may include 9 boards of 1200 mm each and 3 boards of 1000 mm each.
In this example, we only use lumber and we may not know the production process of the Manufacturer - so we only supply lumber with a consumption of 1 m3 per 20 pallets.
Click the “Save and close” button
We create an “Order to the supplier”:
1 – Select the operation “Order for processing”
2 – We choose a company that will produce pallets from our raw materials. In this case – Manufacturer
3 – Select the date when we will receive the pallets
In the “Products” tab fill in:
4 – Select a product item for finished products
5 – Required quantity
6 – Planned price
In the “Materials for recycling” tab
If we have entered “Specification” in the Nomenclature of Finished Products, then simply click the “Fill in according to specification” button and the tab will be filled in with the material and quantity.
If there is no specification, then fill in fields 7 – Nomenclature and Quantity field 8
In both cases, we fill in the planned date of shipment of raw materials.
Click the spend button.
Based on the supplier’s order, by clicking the “Create based on” button, we create a document “Invoice”
We check that 1 is “Transfer for processing” and fill in the price of the material - everything else is filled in automatically.
By clicking on the printer icon, we print the document required for shipment, in this case M15
After the Manufacturer returns the finished product and remaining material to you, you need to, based on the “Supplier Order”, by clicking on the “Create based on” button, create a “Processor Report” document, which is filled in automatically only partially
In the “Materials” tab, fill in the real cost of materials at the internal accounting price.
In the “Waste” tab we enter the returned balances
In the "Services" tab
We choose and set the price according to the documents from the Manufacturer.
We post the document, but do not close it
At the very bottom of the document card, in the line “Invoice (received)”, click the “create” link. The card for creating an incoming invoice opens
And fill in the number and date of the incoming C-invoice and click “Post and close”
Also in the “Processor’s Report”, click “Post and close” - all movements in warehouses were carried out on the basis of the “Report”
Let’s check by creating the “Movement of Goods” report
A brief view of the report shows the income/expenses of lumber warehouses and the income of annual products. You can expand the report more fully by clicking “+” above the table header.
In the “Supplier Order” document
Change state 1 to “Completed”
Check the 3rd box “Successfully”
Process completed
BASIS: VAT
When transferring materials for processing on a toll basis, ownership of them does not pass, therefore this operation is not considered a sale (Article 39 of the Tax Code of the Russian Federation, paragraph 1 of Article 220 of the Civil Code of the Russian Federation). This means that it is not subject to VAT (Article 146 of the Tax Code of the Russian Federation). At the same time, VAT paid for the processing of materials can be deducted if the conditions for its reimbursement are met.
The transfer of inventory items (work, services) to pay for the processing of materials is subject to VAT (subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation).
simplified tax system
If an organization applies a simplification and pays a single tax on the difference between income and expenses, take into account the costs of processing raw materials on a toll basis as part of material expenses (subclause 5, clause 1, clause 2, article 346.16, subclause 6, clause 1, art. 254 of the Tax Code of the Russian Federation).
Work on processing materials must be taken into account if two conditions are met: they are paid for and accepted from the contractor. Please include the cost of recyclable materials in your expenses at the time of payment. Such rules are established by subparagraph 1 of paragraph 2 of Article 346.17, paragraph 2 of Article 346.16 and paragraph 5 of Article 254 of the Tax Code of the Russian Federation.
If processing costs form the initial cost of fixed assets, the organization can also take them into account when taxing. For more information about this, see How to use the simplified tax system to take into account the receipt of fixed assets and intangible assets.
Organizations that use simplification for the object do not take into account income and expenses for processing materials (Article 346.14 of the Tax Code of the Russian Federation).
Receipt from processing
After the contractor produces the goods and reports information about the consumption of raw materials, we can enter the “Production Report” document. With this document in 1C we reflect the receipt of goods from processing.
To capitalize products from processing, in the “Production” section, create a “Production Report” document.
Since this is not our own production, at the top of the document in the “Type” field we must indicate “Receipt from production”. In this case, the Partner, Counterparty and Contract fields will be available - in them we fill in information about the processor to whom we previously transferred customer-supplied raw materials for processing.
We fill out the tabular part with the finished products and indicate the quantity produced. The program will automatically fill in the raw materials based on the specification. But we can adjust the amount of raw material consumption.
If you need to reflect the cost of the processor’s services and include them in the cost of finished products, then go to the “Additional costs” tab.
On the “Additional expenses” tab, we reflect in 1C information on the cost of expenses for processing raw materials for manufacturing products, broken down by expense items. The specified cost will be reflected in the cost of finished products of the 1C: Trade Management + Production program.
After posting the “Production Report” document, the 1C program will do the following:
- Receipt of finished products
- Removing from reserves and warehouse balances the amount of raw materials specified in the document
- Reducing the balance of raw materials transferred to the processor
Based on this, the report “Remains and availability of goods” will show the following picture
Those. balances and reserves in 1C have become smaller because we actually used our own raw materials.
For the same reason, we will see that in the report “Designated raw materials transferred”, the availability of raw materials from the processor has become less
