Account 25 in accounting - subaccounts, standard transactions

Accounting: overhead costs

During the reporting period, general production expenses are reflected in the debit of account 25 of the same name. At the same time, expenses are recorded on account 25 in the context of each production unit. In accounting, overhead costs are reflected by the following entries:

Debit 25 Credit 10 – the cost of materials, spare parts used for maintenance and repair of equipment is written off;

Debit 25 Credit 70 – salaries of general production personnel have been accrued;

Debit 25 Credit 69 – contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases are accrued from the salaries of general production personnel;

Debit 25 Credit 23 (60, 76) – expenses for maintaining premises are written off (repairs, rent for premises, equipment, payment for utilities, etc.);

Debit 25 Credit 02 (05) – depreciation has been accrued on fixed assets (intangible assets) used in the main (auxiliary) production.

This procedure follows from the provisions of paragraph 9 of PBU 10/99, Instructions for the chart of accounts, letter of the Ministry of Finance of Russia dated November 8, 2005 No. 07-05-06/294.

What is account 25 used for in accounting?

The chart of accounts determines that account 25 general production expenses is intended to account for expenses associated with servicing the organization’s production processes.

Such company expenses include the cost of maintaining production equipment (for example, electricity), the cost of maintaining and servicing production premises, the salary of service personnel with mandatory deductions for it, etc.

The rules establish that service costs are collected in a separate account 25. During a certain period they are accumulated in account 25, and at the end of the period they are subject to distribution according to the accepted methodology at the enterprise.

As a result of this, these costs are included in a certain proportion in the cost of each type of finished product of the company according to the selected distribution base.

The need for such a process for an organization arises for the purposes of budgeting and management accounting, when calculating marginal income.

Attention! Maintenance costs can be distributed not only between main production facilities, but also included in auxiliary costs.

It is advisable to use the account if a business entity produces finished products (provides services, performs work) in a large assortment.

If the company is a small business or has a small range of products, then according to the accounting policy of the organization, account 25 may not be applied. In this case, these costs are reflected as part of the costs of main production.

Attention! In small enterprises, it is quite difficult to distinguish between basic, general production and general business expenses. Those costs that can immediately be attributed to the finished product without distribution are the main costs.

The costs of maintaining a workshop in which a wide range of products are produced are general production costs. The costs of managing a company (office maintenance, salaries of the director, his deputies, financial employees, etc.) are general shop expenses.

General running costs

Costs associated with managing an organization, organizing its economic activities, and maintaining its common property are classified as general business expenses.

For example, expenses associated with running an organization (administrative expenses) include:

administrative and managerial;

for the maintenance of general business personnel not related to the production process;

depreciation charges and expenses for repairs of fixed assets for management and general economic purposes;

rent for general business premises;

expenses for payment of information, auditing, consulting, etc. services;

taxes paid by the organization as a whole (property tax, transport tax, land tax, etc.);

other expenses similar in purpose that arise in the process of managing an organization and are associated with its maintenance as a single financial and property complex.

Direct costing method

An alternative method to traditional calculation is to calculate production costs based on variable costs - this is the “Direct Costing” method. It lies in the fact that the calculation is carried out on the basis of only those costs that are directly related to the production of products, that is, an incomplete calculation of the cost. When using this method, the cost of the product does not include costs that are not directly related to production; they are taken into account as a separate item, and then written off to the financial result when distributing the company’s income and losses.

The Direct Costing method was officially introduced into Russian accounting regulations in 1996. It allows you to more accurately determine the price of products and reduce the distortion of the result due to variable consumption.

Accountants performing calculations are required to ensure the timeliness and reliability of accounting for indirect costs, ensure that they are reflected correctly in accounting registers, and monitor the rational use of production resources and other indirect costs. Only on the basis of accurate information can it be possible to analyze ODA and develop a strategy for reducing it in future periods.

Accounting: general business expenses

During the reporting period, general business expenses are reflected in the debit of the same name account 26:

Debit 26 Credit 10 (21) – materials (semi-finished products of own production) spent on general business needs are written off;

Debit 26 Credit 70 – salaries of administrative, managerial and general business personnel have been accrued;

Debit 26 Credit 69 – contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases are accrued from the salaries of administrative, managerial and general business personnel;

Debit 26 Credit 60, 76 – the cost of work (services) performed by third parties (for example, auditing, consulting services) is taken into account as part of general business expenses;

Debit 26 Credit 02 (05) – depreciation has been accrued on fixed assets (intangible assets) for general economic and administrative purposes.

Subscription to electronic publications

Situation: how to reflect in accounting the costs associated with subscriptions to electronic periodicals?

Accounting for expenses for periodical electronic publications depends on the type of contract.

Subscription to electronic periodicals can be issued:

an agreement for the provision of paid information services for the provision of a copy of a periodical in electronic form (clause 2 of Article 779 of the Civil Code of the Russian Federation);

a license agreement under which non-exclusive rights to use the electronic resources of the publishing house are transferred (Article 1367 of the Civil Code of the Russian Federation).

In the first case, pay for the subscription to the electronic publication in accounting as an advance payment (clause 3 of PBU 10/99). Reflect the advance payment using the following entries:

Debit 60 subaccount “Settlements for advances issued” Credit 51 – advance payment for subscription to an electronic magazine (newspaper) is transferred.

After receiving the issue of the magazine (newspaper) in electronic form, make the following entries:

Debit 26 (44) Credit 60 subaccount “Settlements with publishing houses” – the cost of the next issue of an electronic magazine (newspaper) is written off as expenses;

Debit 60 subaccount “Settlements with the publishing house” Credit 60 subaccount “Settlements for advances issued” - the amount of the advance is offset against repayment of accounts payable.

This procedure is based on the provisions of the Instructions for the chart of accounts (accounts 60, 44, 26), paragraphs 3, 18 and 19 of PBU 10/99.

In the second case, for accounting purposes, intangible assets received for use are accounted for on an off-balance sheet account in the valuation established by the agreement (clause 39 of PBU 14/2007). The chart of accounts does not provide for a separate off-balance sheet account for accounting for intangible assets received for use. Therefore, the organization needs to independently open an off-balance sheet account and consolidate this in its accounting policies for accounting purposes. For example, account 012 “Electronic subscription publications”.

The one-time payment for the granted right to use the electronic publication should be reflected in accounting in account 97 “Deferred expenses” and included monthly in expenses for ordinary activities during the validity period of the license agreement (paragraph 2, clause 39 of PBU 14/2007).

In accounting, reflect the prepayment by posting:

Debit 60 Credit 51 – the cost of the right to use the electronic publication has been paid.

After gaining access to the electronic publication, make notes:

Debit 012 “ Electronic subscription publications ” – the cost of the right to access an electronic publication is taken into account;

Debit 97 Credit 60 – the cost of the right to access the electronic publication is charged to deferred expenses.

Determine the mechanism for transferring future expenses to cost yourself. The following expenses can be written off:

evenly;

in proportion to the income received from sales;

in other ways.

Determine the period for writing off expenses by the period for which access to the electronic subscription publication was provided. The beginning of this period (the beginning of the period of use of the subscription publication) is determined by the format of the software provided. For example, for the Internet version - from the moment the code is activated.

The period of use of the subscription publication is specified in the contract.

The established procedure for writing off future expenses should be fixed in the accounting policy for accounting purposes (clause 4, 8 of PBU 1/2008, letter of the Ministry of Finance of Russia dated January 12, 2012 No. 07-02-06/5).

Monthly during the period of access to the electronic subscription publication, make the following entries:

Debit 26 (44) Credit 97 – part of the payment for using the electronic publication has been written off.

This procedure is based on the provisions of the Instructions for the chart of accounts (accounts 97, 60, 44, 26), paragraphs 18 and 19 of PBU 10/99.

Attention: many write off deferred expenses at a time. They want to understate large profits of the current period or simply out of ignorance. Officials will be fined for this. In some cases, the organization will also suffer. However, you can avoid trouble.

In accounting, reverse the entry that was written off by the RBP at a time. Remember, this can only be done within the year in which the mistake was made.

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For example, the Alpha organization received a certificate of conformity for its products valid for five years. The cost of the certificate was 50,000 rubles. According to the accounting policy at Alfa, RBP is written off evenly.

Error!

Debit 20 Credit 76 – 50,000 rub. – the fee for the certificate is taken into account as part of expenses for ordinary activities.

Correctly like this:

Debit 97 Credit 76 – 50,000 rub. – the fee for the certificate is included in deferred expenses.

Monthly:

Debit 20 Credit 97 – 833 rub. (RUB 50,000: (5 years × 12 months)) – deferred expenses are written off.

Here's how to fix the error in this situation:

Debit 20 Credit 76 – 50,000 rub. – the amount previously erroneously included as expenses for ordinary activities is reversed;

Debit 97 Credit 76 – 50,000 rub. – the fee for the certificate is included in deferred expenses.

At the same time, expense the amounts written off for the past months. For example, if three months have passed since costs were accepted for accounting:

Debit 20 Credit 97 – 2500 rub. (3 months × (50,000 rubles: (5 years × 12 months))) – deferred expenses are written off.

Cost Allocation

General production and general business expenses are associated with the production of different types of products (works, services), and also ensure the operation of the organization as a whole. Therefore, unlike direct (primary) costs, these costs are considered indirect (overhead).

At the end of the reporting period, accounts 25 and 26 are closed. The expenses accumulated on them are written off to the debit of accounts: 20 “Main production”, 23 “Auxiliary production”, 29 “Service production and facilities” or 90 “Sales” in proportion to the indicators that must be established in the accounting policy for accounting purposes (clause 7 PBU 1/2008).

The basis for the distribution of indirect costs between main, auxiliary and service production can be, for example, the following indicators:

wages of key production workers;

direct costs with a workshop structure of the organization;

the number of machine-hours worked for the equipment;

size of production area;

material costs;

volume of production in natural or cost terms.

For example, in industries with a significant share of labor costs, it is advisable to distribute indirect costs in proportion to the salaries of the main production workers. Distribute indirect costs in proportion to material costs (cost of raw materials, materials, spare parts, etc.) if they constitute a significant share of the cost of manufactured products.

An example of the distribution of indirect costs associated with fulfilling a production order. The organization uses the custom costing method

In April, Proizvodstvennaya LLC accepted and completed two production orders (No. 1 and No. 2) for the manufacture of special transport equipment. The accounting policy of “Master” stipulates that general production and general business expenses are distributed in proportion to the salaries of production workers involved in fulfilling each order.

In April, the actual amount of expenses was:

general production – 100,000 rubles;
general business – 125,000 rubles.

Direct costs for order No. 1 were:

cost of materials used – 82,300 rubles;
salary of production workers - 68,500 rubles;
the amount of contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases from the salaries of production workers is 20,687 rubles.

Total for order No. 1 – RUB 171,487.

Direct costs for order No. 2 were:

cost of materials used – 151,500 rubles;
the amount of accrued wages of production workers is 55,000 rubles;
the amount of contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases from the salaries of production workers is 16,610 rubles.

Total for order No. 2 – RUB 223,110.

The total salary of production workers for both orders was 123,500 rubles. (RUB 68,500 + RUB 55,000).

The share of wages of production workers in the total amount of their wages is equal to:

for order No. 1 – 55% (RUB 68,500: RUB 123,500);
for order No. 2 – 45% (RUB 55,000: RUB 123,500).

The cost of order No. 1 includes:

part of overhead costs in the amount of RUB 55,000. (RUB 100,000 × 55%);
part of general business expenses in the amount of 68,750 rubles. (RUB 125,000 × 55%).

The actual cost of order No. 1 was: RUB 171,487. + 55,000 rub. + 68,750 rub. = 295,237 rub.

The cost of order No. 2 includes:

part of overhead costs in the amount of 45,000 rubles. (RUB 100,000 – RUB 55,000);
part of general business expenses in the amount of RUB 56,250. (RUB 125,000 – RUB 68,750).

The actual cost of order No. 2 was: 223,110 rubles. + 45,000 rub. + 56,250 rub. = 324,360 rub.

What is included in the account

To understand what is reflected in account 25, you need to know what costs are included in general production costs.

These include:

Costs for maintenance and servicing of industrial premises - rent, depreciation, costs for heating, lighting, air conditioning, ventilation of industrial premises, etc.
Maintenance costs for production equipment - electricity, fuel, spare parts, etc.
The cost of paying general shop personnel is the salary of engineering and technical junior service personnel.
Deductions accrued on the salaries of general production personnel.
Insurance costs, both compulsory and voluntary.
Third-party services that are included in overhead costs.
Other expenses included by the company in overhead costs in accordance with the characteristics of the activities performed.

Attention! The enterprise, for the most part, independently decides which expenses can be classified as general production expenses. However, the company's management must remember that when taxing profits, it is quite problematic to take into account indirect expenses as expenses taken into account for tax accounting. Therefore, many business entities try to include the maximum list of expenses in direct costs.

Write-off of general business expenses

General business expenses can be written off in one of two ways:

to account 20 “Main production” (23 “Auxiliary production”, 29 “Service production and facilities”);

to account 90-2 “Cost of sales”.

Fix the chosen method of writing off general business expenses in the accounting policy for accounting purposes (clause 7 of PBU 1/2008, clause 20 of PBU 10/99).

In the first case, general business expenses form the “full” cost of finished products and are written off at the end of the month.

Record the write-off of general business expenses (after distribution) by posting:

Debit 20 (23, 29) Credit 26 – general business expenses associated with the activities of the main (auxiliary, servicing) production are written off.

In the second case, a “reduced” cost of finished products is formed, and general business expenses are completely written off for sales, regardless of how many products were sold in the reporting period.

At the moment of transfer of ownership of the shipped products (results of work or services) to the buyer, reflect the proceeds from its sale and write off the cost of the products (work, services) sold:

Debit 62 Credit 90-1 – revenue from the sale of products is reflected;

Debit 90-2 Credit 43 – the actual cost of shipped products (work performed, services rendered) is written off;

Debit 90-3 Credit 68 subaccount “Calculations for VAT” - VAT is charged on sales proceeds.

At the end of the month, write off the amount of general business expenses:

Debit 90-2 Credit 26 – general business expenses are included in the cost of sales.

Such rules are established by paragraphs 5 and 12 of PBU 9/99 and the Instructions for the chart of accounts (accounts 20, 26). For more information about this, see How to record sales of finished products in accounting.

An example of writing off indirect costs for the main and auxiliary production of an organization. The organization accounts for costs at actual cost

LLC "Proizvodstvennaya" manufactures jewelry. In accordance with the accounting policy, for accounting purposes, cost accounting is carried out at actual cost. General production and administrative expenses are distributed in proportion to the salaries of production workers.

"Master" has two workshops:

Workshop No. 1 – production of machine-made chains and bracelets. An auxiliary repair group has been created on the territory of the workshop, which is engaged in setting up the production equipment of workshop No. 1;

Workshop No. 2 – production of exclusive handmade products (pendants, earrings, rings).

In addition, the organization has created a design bureau that develops sketches and models of new products for both workshops.

To reflect actual costs by workshop, additional subaccounts have been opened to account 20:

20 subaccount “Workshop No. 1”;
20 sub-account “Workshop No. 2”.

In April, actual expenses were:

For workshop No. 1:

cost of consumed raw materials, materials - 1,200,000 rubles;

salary of production workers - 185,323 rubles;

contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases - 55,968 rubles;

depreciation of fixed assets used in production - 70,000 rubles.

For workshop No. 2:

cost of consumed raw materials, materials - 800,000 rubles;

salary of production workers - 96,368 rubles;

contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases - 29,103 rubles;

depreciation of fixed assets used in production - 20,000 rubles.

The costs associated with setting up production equipment in workshop No. 1 were:

cost of materials, parts, spare parts – 60,000 rubles;

salary of repair group employees (including contributions for compulsory pension (social, medical) insurance and contributions for insurance against accidents and occupational diseases) - 80,000 rubles.

The costs of maintaining the design bureau amounted to:

designers’ salary – 124,000 rubles;

the amount of contributions for compulsory pension (social, medical) insurance – 37,200 rubles;

the amount of contributions for insurance against accidents and occupational diseases - 248 rubles;

depreciation of office equipment of a design bureau - 43,000 rubles.

The amount of general business expenses for April is 248,000 rubles.

The share of wages of production workers in workshops is:

shop No. 1 – 66% (185,323 rubles: (185,323 rubles + 96,368 rubles) × 100%);
shop No. 2 – 34% (96,368 rubles: (185,323 rubles + 96,368 rubles) × 100%).

The amount of general production expenses (costs of maintaining a design bureau), which is distributed between workshops, is equal to: 124,000 rubles. + 37,200 rub. + 248 rub. + 43,000 rub. = 204,448 rub.

The amount of overhead costs, which is included in the cost of production, is equal to:

for workshop No. 1 – 134,936 rubles. (RUB 204,448 × 66%);
for workshop No. 2 – 69,512 rubles. (RUB 204,448 × 34%).

The “Master” accountant distributed the amount of general business expenses as follows:

for workshop No. 1 – 163,680 rubles. (RUB 248,000 × 66%);
for workshop No. 2 – 84,320 rubles. (RUB 248,000 × 34%).

The following entries were made in the “Master’s” accounting:

Debit 20 subaccount “Workshop No. 1” Credit 10 – 1,200,000 rub. – raw materials transferred to workshop No. 1 were written off;

Debit 20 subaccount “Workshop No. 1” Credit 70 (69) – 241,291 rub. (185,323 + 55,968) – wages accrued to the workers of workshop No. 1 (including insurance contributions);

Debit 20 subaccount “Workshop No. 1” Credit 02 – 70,000 rub. – depreciation was accrued on production fixed assets of workshop No. 1;

Debit 20 subaccount “Workshop No. 2” Credit 10 – 800,000 rub. – raw materials transferred to workshop No. 2 were written off;

Debit 20 subaccount “Workshop No. 2” Credit 70 (69) – 125,471 rubles. (96,368 + 29,103) – wages were accrued to the workers of workshop No. 2 (including insurance contributions);

Debit 20 subaccount “Workshop No. 2” Credit 02 – 20,000 rub. – depreciation was accrued for production fixed assets of workshop No. 2;

Debit 23 Credit 10 – 60,000 rub. – the cost of materials spent on repairing equipment in workshop No. 1 was written off;

Debit 23 Credit 70 (69) – 80,000 rub. – salaries of the repair group employees were accrued (including insurance premiums);

Debit 20 subaccount “Workshop No. 1” Credit 23 – 140,000 rubles. (60,000 rubles + 80,000 rubles) – the costs of auxiliary production of workshop No. 1 are taken into account;

Debit 25 Credit 70 (69) – 161,448 rubles. – salaries of designers were calculated (including insurance premiums);

Debit 25 Credit 02 – 43,000 rub. – depreciation has been calculated on fixed assets of the design bureau;

Debit 20 subaccount “Workshop No. 1” Credit 25 – 134,936 rubles. – general production expenses were written off as the cost of production of workshop No. 1;

Debit 20 subaccount “Workshop No. 2” Credit 25 – 69,512 rubles. – general production expenses were written off as the cost of production of workshop No. 2;

Debit 26 Credit 10 (02, 60, 69, 70) – 248,000 rub. – general business expenses are reflected;

Debit 20 subaccount “Workshop No. 1” Credit 26 – 163,680 rubles. – general business expenses were written off for the cost of production of workshop No. 1;

Debit 20 subaccount “Workshop No. 2” Credit 26 – 84,320 rub. – general business expenses were written off for the cost of production of workshop No. 2.

Distribution coefficient for other ODA

To account for OPR and include them in the cost of finished goods, the distribution method is used. The following balance sheet items are included in the calculation of the general production expenses base:

remuneration of workers directly involved in production;
costs of production of finished products;
volume of production;
time worked (shifts, hours).

To calculate the cost of a product, it is necessary to determine the distribution coefficient. The formula will be like this:

K = KZ/P * 100%, where

K – distribution coefficient;

KZ – indirect costs;

P – OPR indicator.

For example, with a total indirect cost of 20,000 rubles, the wages of workers are 10,000 rubles. The distribution coefficient in this case will be 200%. Thus, the cost of finished products must be calculated taking into account the wages of production workers at double the rate.

The formula for calculating OPR in the cost of goods will be as follows:

OPP = OPP * KR / 100%, where

GPP – the size of total production in the value of the goods;

OZP – basic wages for production workers;

KR – distribution coefficient.

When using the above calculation method, accounting data is used.

General business expenses in the absence of activity

Situation: how to reflect general business expenses in accounting if the organization does not receive income from its activities?

General business expenses (for example, salaries of management personnel, office rental costs and other expenses associated with the development and development of a business), like other expenses, must be taken into account regardless of whether they lead to income or not (clauses 16–18 of PBU 10/99). Therefore, even if the organization does not receive income from its activities, these expenses must still be fully reflected in the accounting accounts.

General business expenses, which are reflected in account 26 of the same name, should be taken into account in one of the following ways:

write them off to account 20 “Main production”;

take them into account in account 91 “Other income and expenses” in the subaccount “Other expenses”.

In the first case, general business expenses will be taken into account as part of the main production expenses (i.e., in the debit of account 20 (Instructions for the chart of accounts)), forming the full cost of finished products. When the organization begins to receive income, taking into account these costs, the financial result from sales will be formed (clauses 18 and 19 of PBU 10/99).

In the second case, expenses will directly form the financial result (loss) of the reporting period (i.e., taken into account as the debit of account 91-2) (Instructions for the chart of accounts).

Until January 1, 2011, general business expenses could be taken into account using account 97 “Deferred expenses”. Since January 1, 2011, organizations no longer have this opportunity. This conclusion follows from subparagraph 14 of paragraph 1 of the amendments approved by order of the Ministry of Finance of Russia dated December 24, 2010 No. 186n.

Determine the chosen procedure for distributing expenses in the accounting policy for accounting purposes (clause 4 of PBU 1/2008).

Subaccounts

The chart of accounts establishes that it is recommended to open two sub-accounts for this account:

25 subaccount 1 – “Maintenance and operation of equipment”, which summarizes the costs of operating the organization’s equipment;
25 subaccount 2 – “General shop expenses”, which is supposed to summarize the costs of managing and servicing the main production facilities.

However, since account 25 can accumulate expenses of various natures, to analyze them it will be more convenient to open a separate sub-account for each type:

Salaries of general production workers;
Contributions to social funds;
Raw materials and materials;
fuels and lubricants;
Depreciation of fixed assets;
Depreciation of intangible assets;
Public utilities;
Etc.

Attention! With this type of accounting, a “Closing” subaccount must be opened. Its essence is that during the closing procedure, first the costs of all subaccounts are written off to it, and then distribution from it to the accounts of other productions begins.

Account 25 in accounting “general production expenses” - what is it used for, posting subaccounts