How to account for advertising expenses

What is advertising

Advertising is information that is addressed to an indefinite circle of people and is aimed at attracting attention to the object of advertising, maintaining interest in it and promoting it on the market (Clause 1, Article 3 of the Law of March 13, 2006 No. 38-FZ).
Situation: what does “an indefinite circle of persons” mean in the definition of advertising?

An indefinite circle of people are those recipients of advertising who are unknown in advance.

As a general requirement, advertising information is addressed to an indefinite number of persons (Clause 1, Article 3 of Law No. 38-FZ of March 13, 2006). This means that advertising:

cannot be created for specific consumers of a particular product;
should not mention specific citizens or organizations whose perception it is aimed at.

This interpretation of the concept of “an indefinite circle of persons” is set out in the letter of the Federal Antimonopoly Service of Russia dated April 5, 2007 No. ATs/4624 (brought to the attention of the tax inspectorates by the letter of the Federal Tax Service of Russia dated April 25, 2007 No. ШТ-6-03/348).

The object of advertising can be:

product;
a means of individualizing an organization or product;
manufacturer or seller of goods;
results of intellectual activity;
event.

Such a list is established by paragraph 2 of Article 3 of the Law of March 13, 2006 No. 38-FZ.

At the same time, the results of intellectual activity and means of individualization of the organization include:

trademarks;
service marks;
brand names;
industrial designs;
inventions;
computer programs, databases.

This conclusion follows from Article 1225 of the Civil Code of the Russian Federation.

The method, form and means of advertising distribution can be any (Clause 1, Article 3 of the Law of March 13, 2006 No. 38-FZ).

Examples of advertising include:

commercial on television or radio;
advertising events for film and video services;
information about the company posted on someone else’s website (banner);
advertisements in the media;
information on billboards, vehicles, and stop points;
advertising on stands, billboards in the metro (letter of the Ministry of Finance of Russia dated October 16, 2008 No. 03-03-06/1/588);
goods or finished products that are displayed in display cases, in sample rooms and showrooms, at exhibitions, expositions, fairs;
addressless mailing of catalogs of goods by mail (letter of the Ministry of Finance of Russia dated November 3, 2010 No. 03-03-06/1/688);
incentive lotteries not based on risk (letter of the Ministry of Economic Development of Russia dated April 7, 2014 No. D09i-451. Brought to the attention of tax inspectorates by letter of the Federal Tax Service of Russia dated April 21, 2014 No. ED-4-2/7598).

Situation: will the information on the sign be advertising?

Answer: no, it won't. Provided that the information on the sign is not related to a specific product.

The provisions of the law on advertising do not apply to information that must be communicated to the consumer by law (subparagraph 2, 5, paragraph 2, article 2 of the Law of March 13, 2006 No. 38-FZ).

For example, the seller of goods is required to indicate the following information on the sign:

name of company;
its location;
operating mode.

This is stated in paragraph 1 of Article 9 of the Law of February 7, 1992 No. 2300-1.

In this case, the sign is not advertising, but informational in nature.

A similar point of view is reflected in the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 25, 1998 No. 37, letter of the FAS Russia dated March 16, 2006 No. AK/3512.

If the information on a sign is related to a specific product or causes buyers to associate it with it, then such a sign will be advertising (see, for example, paragraph 2 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 8, 2012 No. 58, resolution of the Federal Antimonopoly Service of the North-Western District dated April 23, 2013 No. A56-46534/2012).

Situation: will the information on the product packaging be advertising?

Answer: no, it won't.

Legislation obliges the seller (performer) to provide the consumer with reliable information that is necessary for the correct selection of goods, work, or services. Such information includes information about the product, its manufacturer, consumer properties, rules and conditions for the effective and safe use of the items sold. This information may be indicated on the label, marking or packaging of the product (Article 10 of the Law of February 7, 1992 No. 2300-1). Therefore, the mandatory information on the packaging will not constitute advertising.

Situation: can sending SMS messages with information about products be considered advertising? This service is provided by the telecom operator.

Answer: yes, you can. Sending SMS messages with information about products is nothing more than advertising.

After all, advertising is information that, in particular, is addressed to an indefinite number of people. Moreover, advertising can be distributed in any way, in any form and using any means. This is stated in paragraph 1 of Article 3 of the Law of March 13, 2006 No. 38-FZ.

In general, advertising can be distributed by telephone only with the prior consent of the subscriber. The advertiser, that is, the telecom operator, must obtain such consent. It turns out that he knows the specific addressee of the message.

But the advertising organization in this case cannot know in advance which of the potential clients the operator will send messages to. In addition, sending a message to a specific subscriber number does not mean that it is possible to recognize the person using this number. This means that the circle of people to whom the operator will send SMS will not be determined for the advertiser.

In this case, the sending of SMS messages through a telecom operator has the right to be recognized as advertising by the advertising organization.

Similar conclusions follow from Article 18 of the Law of March 13, 2006 No. 38-FZ and indirectly confirmed in the letter of the Ministry of Finance of Russia dated October 28, 2013 No. 03-03-06/1/45479.

Main categories of advertising activities

Carrying out advertising activities is any form of communicating information about your goods, services, works and other products to the public through the media (print, television, radio) or illustrative means (boards, tickers, signboards, posters, posters and etc.).

An advertiser is a legal or natural person who bears the costs of advertising activities and on whose behalf they are carried out.

Advertising producer (distributor) - a person or organization that has produced (and/or placed) advertising information on the order or instructions of the advertiser.

Advertising medium – the place and method of advertising.

The following information translated into public form does not apply to advertising:

signs informing about the opening hours of the establishment;
any registration of data on the rules of customer service;
notifications and changes in location, operating hours, contacts or details of the organization;
government notices;
warning or prohibition notices;
other information messages.

Accounting

Advertising expenses are included in expenses for ordinary activities. This follows from paragraphs 5 and 7 of PBU 10/99. Such expenses must be documented (Part 1, Article 9 of the Law of December 6, 2011 No. 402-FZ). Since advertising is recognized as disseminated information, documentary confirmation requires not only the ordering of the advertisement itself, but also its actual distribution (Clause 1, Article 3 of Law No. 38-FZ of March 13, 2006).

Confirmation of advertising distribution, in particular, may be:

reports from advertising distributors on the work done, for example, on the number of leaflets distributed;
on-air certificates from television and radio stations;
metro certificates regarding the provision of advertising services.

Similar conclusions are contained in letters of the Ministry of Finance of Russia dated September 6, 2012 No. 03-03-06/1/467, dated June 22, 2012 No. 03-03-06/2/71.

Advertising costs should be reflected in account 44 “Sales expenses” (Instructions for the chart of accounts). It is advisable to open a corresponding “Advertising Expenses” subaccount for this account.

Advertising placed by a third party

When placing advertisements through third-party organizations, reflect the cost of their services on account 44. To do this, make the following entry:

Debit 44 subaccount “Advertising expenses” Credit 60

– the cost of advertising services is reflected based on the report of the advertising distributor.

If the advertising placement is advanced several months in advance, then consider the prepayment as an advance payment:

Debit 60 subaccount “Settlements for advances issued” Credit 51 (50)

– paid for advertising placement.

Based on the advertising distributor's report, recognize advertising expenses as current expenses, and offset the advance:

Debit 44 subaccount “Advertising expenses” Credit 60

– the cost of advertising placement by a third party is reflected;

Debit 60 Credit 60 subaccount “Settlements for advances issued”

– the advance payment issued to pay for advertising placement services is credited.

Objects

Finances spent on the purchase of an advertising service . These can be various advertisements in the press and on the Internet, publications in magazines, television shows and any other videos that allow you to attract attention to the customer or his business.
Finances invested in the production of work related to advertising , carried out independently by the taxpayer. These include participation in advertising exhibition centers.
When a decision is made to sponsor an entrepreneur or organization, this also applies to advertising costs.

Now let's figure out who pays the advertising tax.

This video will tell you what to do if an advertising tax is charged and other unusual transactions:

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The organization advertises independently

An organization can independently distribute advertising products. Purchased or manufactured promotional materials, for example, stationery with the organization’s logo, brochures, catalogs, should be reflected on account 10 at actual costs. Keep analytical records separately for each type of advertising product. To do this, open the “Advertising Materials” subaccount for account 10.

Reflect the receipt of promotional products as follows:

Debit 10 subaccount “Advertising materials” Credit 60;

– materials intended for distribution for advertising purposes have been taken into account.

After distributing the materials, charge their cost to account 44:

Debit 44 subaccount “Advertising expenses” Credit 10 subaccount “Advertising materials”

– the cost of advertising materials is written off based on the act of their expenditure.

When distributing (for example, at exhibitions, demonstrations) for advertising purposes goods that were originally intended to be sold, reflect their cost on account 41 subaccount “Goods handed over for advertising purposes.” And after distributing the samples, based on the report of the advertising distributor, write off the cost of the distributed goods as expenses - to the debit of account 44 of the “Advertising expenses” subaccount.

Similarly, reflect in accounting the finished products transferred for advertising purposes.

Money has not been credited. What to do?

When paying from a current account using a receipt or via online banking, the money is credited within three business days. In other cases, for example, when paying by credit card, the money is credited to the account within an hour. Deposit time depends on the bank. To check the crediting of money, on the My campaigns page, follow the Payments and documents link in the Accounts section. Learn more about searching for a payment.

The transferred money may end up in available funds. This happens if you paid one invoice twice or underpaid the invoice. Also, the difference is included in available funds if the payment amount is greater than the invoice amount. You can credit available funds to any order in this account. To do this, on the My campaigns page, follow the Payments and documents link to the Accounts section. Follow the link in the account number you need to a page with detailed information about the account. In the Free funds section, select the order to be credited and click Deposit.

If the money is not credited three business days after payment, you can submit a request to search for payment.
Interesting article: Yandex Direct operators

Accounting for advertising structures

The costs of creating or purchasing an advertising structure (for example, a stand, a billboard) form the initial cost of this structure. Depending on the period of use and the limit on the value of property recognized as an object of fixed assets established by the accounting policy, take into account the advertising design:

on account 10 “Materials” as materials;
on account 01 “Fixed assets” as an object of fixed assets (clause 5 of PBU 6/01).

Amounts recorded on account 10 can be written off at once at the time the advertising structure is put into operation:

Debit 44 subaccount “Advertising expenses” Credit 10 subaccount “Advertising materials”

– the costs of the advertising structure were written off.

Write off the cost of an advertising structure recognized as an object of fixed assets through depreciation:

Debit 44 subaccount “Advertising expenses” Credit 02

– depreciation has been accrued on the advertising structure.

Regardless of the type of advertising, write off the amounts accumulated per month on account 44 to the cost of sales as commercial expenses (clause 9 of PBU 10/99). To do this, make the following entry in accounting:

Debit 90-2 Credit 44 subaccount “Advertising expenses”

– advertising expenses are written off as cost of sales.

Advertising expenses in tax accounting

The procedure for recognizing advertising expenses in tax accounting is not the same as in accounting. “Tax” advertising expenses are divided into two categories – standardized and non-standardized.

The list of non-standardized advertising expenses is exhaustive, it includes (clause 4 of Article 264 of the Tax Code of the Russian Federation):

Advertising using media of all types (including information networks).
Outdoor advertising (light panels, stands, billboards, etc.).
“Exhibition” costs, including participation fees, window dressing, showrooms, etc.
Production of advertising printed materials (brochures, catalogs, etc.).

The types of advertising costs listed above are fully recognized as income tax expenses.

Given these costs, there are a number of things to keep in mind:

When placing advertisements in the media, you need to request a certificate of registration as a media outlet from the counterparty.
If the media does not specialize in advertising, then the advertisement placed in it must be accompanied by the mark “advertising” or “on the basis of advertising” (Article of the Law of March 13, 2006 No. 38-FZ “On Advertising”).
If an object used for advertising meets the criteria for classification as fixed assets for tax accounting, then its cost is included in expenses through the depreciation “mechanism”. This could be, for example, a stationary billboard costing over 100 thousand rubles, intended for long-term use for more than a year.

All other advertising is a standard expense and is accepted for tax accounting in the amount of 1% of revenue for the reporting (tax) period, excluding VAT and excise taxes.

In particular, among the regulated expenses, the Tax Code of the Russian Federation singles out the issuance of prizes to the winners of drawings held as part of advertising campaigns.

Revenue for standardization and costs are taken into account on an accrual basis (from the beginning of the year). Therefore, costs not recognized in the first reporting period can be taken into account in the future, when the total volume of revenue makes it possible to “fit” them into the standard. If the revenue for the tax period (year) is not enough to take into account all normalized costs, then their unused balance cannot be transferred to the next year.

Example
Alpha LLC placed advertisements in print media in the 1st quarter of 2021. The cost of accommodation services amounted to 110 thousand rubles. In addition, during the same period, an advertising campaign was held - a prize draw. Material costs for the production of prizes amounted to 120 thousand rubles. The revenue of Alpha LLC for the 1st quarter amounted to 9 million rubles, for the 2nd quarter – 11 million rubles. Let's look at how to account for advertising costs.
The accounting entries in the 1st quarter will be as follows:
DT 44 – KT 60 (110 thousand rubles) – advertising in the media
DT 44 – CT 10 (120 thousand rubles) – production of prizes
In tax accounting, the cost of advertisements in the media will be recognized in full in the 1st quarter, because they are not standardized. The costs of producing prizes will be recognized in the amount of 90 thousand rubles. (1% of revenue for the 1st quarter). The balance of expenses for prizes is 30 thousand rubles. will be recognized in the 2nd quarter, when total revenue is sufficient to meet the standard.