Escrow accounts: how have the accounting statements of developers changed?

Accountants often have difficulty recording shared-equity construction transactions. Questions are raised by the nature of the relationship between the developer and the shareholder from the point of view of civil law. For tax accounting purposes, it is considered that the developer receives targeted financing from shareholders, while for accounting purposes the funds received are not targeted because they are of a compensatory nature (the shareholder transfers the money, the developer transfers the apartment). The article “Equity Construction Accounting” will talk about all the intricacies of recording transactions.

Shared construction accounting – main points

Under the concept of “shared construction”

is understood as a form of investment activity in the field of construction, during which the developer (represented by an investment or construction company) plans the construction of real estate objects (equity-shared construction projects) and for these purposes engages in attracting funds from organizations and individuals (shareholders, participants in shared construction). The completed construction project, according to the share participation agreement, after its commissioning becomes the property of the shareholders.

Before delving into the instructions regarding accounting, you should pay attention to the text of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 11, 2011 No. 54. It contains some conclusions that will help to understand the validity of the requirements regarding the reflection of records of business transactions with the developer. The Resolution states that any agreement (including agreements for participation in shared construction) related to investments in the construction sector, in which it is planned to transfer to the investor a financed share in real estate, cannot be considered as a separate type of agreements. It is necessary to build on the concepts provided for by the Civil Code of the Russian Federation.

Thus, an agreement for participation in shared construction is close in essence to the contracts for the sale and purchase of a future property mentioned in the Civil Code of the Russian Federation.
Based on this statement, the agreement we are considering will be considered as a special purchase and sale agreement with an individual procedure for registering ownership rights - directly to the buyer, without the participation of the seller-developer.

Regulation of investment and construction activities

The main laws regulating relations in the field of construction (reconstruction, major repairs) are the Town Planning Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), Federal Law dated February 25, 1999 No. 39-FZ “On investment activities in the Russian Federation, carried out in the form of capital investments” (hereinafter referred to as Law No. 39-FZ), Federal Law of December 30, 2004 No. 214-FZ “On participation in shared-equity construction of apartment buildings and other real estate and on amendments to certain legislative acts of the Russian Federation” (hereinafter referred to as the Law on Shared-Shared Construction ).

First, let's look at the definitions.

A developer is an individual or legal entity that provides construction, reconstruction, and major repairs of capital construction projects on a land plot it owns, as well as carrying out engineering surveys and preparing design documentation for their construction, reconstruction, and major repairs (Article 1 of the Civil Code of the Russian Federation).

The developer, in accordance with the Law on Shared Construction, is a legal entity, regardless of its organizational and legal form, which owns or leases, subleases, or as provided for in the Federal Law of July 24, 2008 No. 161-FZ “On Promoting the Development of Housing construction" cases on the right of free fixed-term use of a land plot and attracting funds from participants in shared construction in accordance with the said federal law for the construction (creation) of apartment buildings and (or) other real estate objects on this land plot, with the exception of industrial purposes, on the basis received construction permit.

In accordance with Art. 4 of Law No. 39-FZ:

— investors make capital investments using their own and (or) borrowed funds in accordance with the legislation of the Russian Federation. Investors can be individuals and legal entities created on the basis of a joint activity agreement, and associations of legal entities that do not have the status of a legal entity, state bodies, local governments, as well as foreign business entities;

— customers are individuals and legal entities authorized by investors who implement investment projects. At the same time, they do not interfere with the entrepreneurial and (or) other activities of other investment entities, unless otherwise provided by the agreement between them. Customers can be investors. The customer, who is not an investor, is granted the rights to own, use and dispose of capital investments for the period and within the powers established by the agreement and (or) government contract in accordance with the legislation of the Russian Federation.

Chapter 37 of the Civil Code of the Russian Federation (Article 706) defines a contractor. “If the law or the contract does not provide for the contractor’s obligation to perform the work provided for in the contract personally, the contractor has the right to involve other persons (subcontractors) in the performance of his obligations. In this case, the contractor acts as a general contractor. A contractor who has engaged a subcontractor to perform a work contract in violation of the provisions of the law or the work contract shall be liable to the customer for losses caused by the subcontractor’s participation in the execution of the contract. The general contractor is responsible to the customer for the consequences of non-fulfillment or improper fulfillment of obligations by the subcontractor, and to the subcontractor is responsible for the non-fulfillment or improper fulfillment of obligations by the customer under the contract. Unless otherwise provided by law or contract, the customer and the subcontractor do not have the right to make claims against each other related to the violation of contracts concluded by each of them with the general contractor. With the consent of the general contractor, the customer has the right to enter into contracts for the performance of certain works with other persons. In this case, these persons are responsible for non-performance or improper performance of the work directly to the customer.”

Shared construction accounting

The legislative framework and practice of reflecting transactions related to shared construction in accounting accounts have not been fully developed at the moment. Accountants of organizations that are customers in shared construction often experience difficulties in reflecting the relevant business transactions in accounting.

So, as has already become clear, an agreement for shared participation in the construction of an object is a type of purchase and sale agreement. Then it can be argued that the transfer of commissioned objects to the shareholder is an operation for the sale of finished residential premises (construction products). But here the fact of transfer of ownership from the seller to the buyer is not revealed, which means that the sale transaction cannot be opened in the developer’s sales accounts (clause 12 of PBU 9/99).

Then the accountants decided to reflect transactions for the sale of finished products (houses, apartments, parking spaces, non-residential premises), since it can be assumed that special conditions may be provided for by Law No. 214-FZ.

Important!

Based on the results of the posting, the savings of the shareholders’ funds are not determined, because the cost of the contract (not taking into account the developer’s remuneration) is reflected in full as proceeds from the sale of the completed construction project.

Construction site

The construction of the facility is carried out on a specially equipped construction site. Requirements for the selection of a site for the placement of new, expanded, reconstructed, as well as existing production facilities are presented in accordance with current land, water, forestry, urban planning and other legislation (clause 3.1 of the Decree of the Chief State Sanitary Doctor of the Russian Federation dated April 30, 2003 No. 88 “On implementation of the Sanitary and Epidemiological Rules SP 2.2.1.1312-03").

Sanitary rules and standards designed to create optimal working conditions when organizing and carrying out construction work, reducing the risk of health problems for workers, as well as the population living in the zone of influence of construction production, were approved by the Decree of the Chief State Sanitary Doctor of the Russian Federation dated June 11, 2003 No. 141 “On implementation of Sanitary Rules and Standards SanPiN 2.2.3.1384-03.”

Hygienic requirements for the organization of a construction site are contained in Chapter 2 of SanPiN 2.2.3.1384-03.

Production areas (sites of construction and industrial enterprises with construction projects, industrial and sanitary buildings and structures located on them), work areas and workplaces must be prepared to ensure safe work performance. Preparatory activities must be completed before the start of work (clause 6.1.1 SNiP 12-03-2001), and the completion of preparatory work at the construction site must be accepted according to the act on the implementation of occupational safety measures, drawn up in accordance with Appendix “I” to SNiP 12-03-2001.

When installing and operating electrical installations in accordance with clause 6.4.1 of SNiP 12-03-2001, construction organizations must be guided by:

- Order of the Ministry of Energy of Russia dated June 20, 2003 No. 242 “On approval of the chapters of the Rules for the Construction of Electrical Installations” (together with the Rules for the Construction of Electrical Installations);

— Interindustry rules on labor protection (Safety Rules) during the operation of electrical installations (POT R M-016-2001, RD 153-34.0-03.150-00), approved. by order of the Ministry of Energy of Russia dated December 27, 2000 No. 163, by resolution of the Ministry of Labor of Russia dated January 5, 2001 No. 3;

— Rules for the technical operation of consumer electrical installations, approved. by order of the Ministry of Energy of Russia dated January 13, 2003 No. 6.

All production areas must be provided with fire extinguishing means. Approved fire safety rules are mandatory for use by all participants in construction production; fire safety requirements for construction work are established (Fire Safety Rules in the Russian Federation, approved by Decree of the Government of the Russian Federation dated April 25, 2012 No. 390).

Maximum permissible concentrations of harmful substances in the air of the working area, as well as noise and vibration levels at workplaces should not exceed the levels established by the relevant state standards (clause 6.6.1 SNiP 12-03-2001).

The maximum permissible concentrations of harmful substances in the air of the working area are established by the Decree of the Chief State Sanitary Doctor of the Russian Federation dated April 30, 2003 No. 76 “On the implementation of GN 2.2.5.1313-03”.

Maximum permissible levels of noise and vibration at workplaces are established by Sanitary Standards SN 2.2.4/2.1.8.562-96 “2.2.4. Physical factors of the production environment. 2.1.8. Physical factors of the natural environment. Noise in workplaces, in residential and public buildings and in residential areas. Sanitary standards", approved. Resolution of the State Committee for Sanitary and Epidemiological Supervision of Russia dated October 31, 1996 No. 36.

The microclimate parameters in production premises must comply with the hygienic requirements of SanPiN 2.2.4.-548-96 “2.2.4. Physical factors of the production environment. Hygienic requirements for the microclimate of industrial premises. Sanitary rules and regulations”, approved. Resolution of the State Committee for Sanitary and Epidemiological Supervision of Russia dated 01.10.96 No. 21.

Tax accounting in shared construction

For the purposes of calculating income tax, money from shareholders collected in the developer’s accounts is considered targeted financing, and therefore does not form a tax base. As for VAT, the issue is controversial. In some cases, investor money is considered revenue and is taxed. However, pp. 22 clause 3 art. 149 of the Tax Code of the Russian Federation exempts from taxation transactions for the sale of residential premises and shares in them. But non-residential premises and parking spaces can also be built. Let us turn to the text of paragraphs. 1 clause 1 art. 146 of the Tax Code of the Russian Federation, according to the provisions of which taxes are imposed on transactions involving the sale (transfer of ownership rights) of goods, works and services. But in the case of a developer, there is no transfer of property, which means no tax has to be paid.

Shared construction accounting – construction is carried out independently

It happens that the developer collects funds from shareholders in order to later independently engage in the construction of the facility, not by contract. In this case, accounting is also carried out: expenses are accumulated in the DEBIT of account 20 in correspondence with the CREDIT of accounts 10, 70, 60, etc., after which the price of finished construction products is formed in the DEBIT of account 43. Turnovers on the sale of objects are reflected as usual . The money that will be paid to him as remuneration should be accounted for as advances on the CREDIT of account 62. Costs related to the provision of services are reflected on the DEBIT of account 20.

According to the provisions of Letter of the Ministry of Finance of the Russian Federation dated July 12, 2005 No. 03-04-01/82, if the developer carries out construction and installation work on his own, the investments of shareholders must be included in the tax base as advance payments for future construction work on the basis of paragraphs. 1 clause 1 art. 162 of the Tax Code of the Russian Federation. However, in 2011, the clarifications of IFRIC 15 came into force, paragraphs 10-12 of which provide:

• entry into the scope of application of IFRS 11 “Construction Contracts” of contracts for the construction of real estate in the event that shareholders have the right to significantly influence the design of the future construction project;
• classification of a shared construction agreement as an agreement for the sale of goods within the framework of the application of IAS 18 “Revenue”, if shareholders cannot choose the design or make adjustments to the main elements of the structure during construction.

And international standards can be used in conjunction with accounting regulations approved by the Ministry of Finance, if the regulations do not establish methods of accounting for a specific issue. And if we apply the clarifications in the field of construction contracts, the contract will be considered as a purchase and sale agreement in any case, and the sale of construction projects is not subject to VAT. Conclusion - funds of shareholders should not be subject to VAT.

Here is the house that was built... by a developer!

– 1C: Shared construction.

Features of the 1C program: Shared construction.

This software solution includes the capabilities of the 1C accounting and is supplemented with special functions necessary for accounting in shared construction.

The implementation of the 1C program allows you to control investments for each construction project; in addition, accounting can be carried out in any currency. This function allows construction company managers to always have the most complete and accurate information about the status of investments for any construction project and adjust the company’s plans in accordance with this.

The implementation of the 1C Shared Construction program opens up the opportunity to view a visual picture of the sale of apartments - a house plan with multi-colored symbols, which displays the already sold area, free apartments for registration, and real estate not intended for sale. A convenient plan provides information in the most accessible form, so the manager only needs a few moments to assess the condition of the object.

The cost of implementing 1C is fully justified by the high performance that software products allow you to obtain. The program implements a convenient mechanism for filling out and saving contracts, including complete information about the investor, the amount of the contract, the investment object, etc. Thus, the time spent on registering contracts with investors and searching for this information, if necessary, is reduced to a minimum.

This program also allows you to solve the problem with the receipt of investments. For each contract, the system determines a schedule for the receipt of funds, and with the help of the program, strict control is exercised over the receipt of cash flows from investors.

Automatic calculation of VAT amounts, profit and loss for each individual agreement allows you to significantly speed up the work of the accounting department, as well as the ability to generate accounting entries and reflect these transactions in regulated accounting.

Assistance to the VDGB company in implementing an industry solution.

Since the 1C:VDGB company is the developer of the 1C:Shared Construction software product, by purchasing this tool, construction company specialists can always count on the help and support of VDGB consultants.

The cost of implementing 1C pays off within the first six months, and a free contract for ITS, concluded immediately after purchasing and installing the program, allows you to significantly save on updates and consulting services from third-party companies.

The article was prepared by the licensed software store 1cmarket.ru.

Current page: Solving problems of accounting for shared construction using the 1C program.

"Financial newspaper. Regional issue", N 2, 2005

SHARE PARTICIPATION IN CONSTRUCTION:

ACCOUNTING AND TAX ACCOUNTING

Currently, the construction of most objects, both residential and industrial, general economic purposes, is carried out with the attraction of funds from investors. With this method of organizing construction, an investor - a person who has the required amount of free funds or attracts free funds of citizens or legal entities, including credit institutions, as sources of financing - finances the construction.

After completion of housing construction, investors receive a certain share in the living space of a residential building handed over to the state commission, which is why this form of construction is called shared construction.

There are several schemes for the participation of parties in construction. Any scheme is determined by the number and functions of construction participants. This is, as a rule, an investor, a customer-developer, a general contractor and co-investors. The shared construction scheme has a multi-level structure.

First level. The share participation scheme is usually based on an investment contract concluded between the municipal administration - the owner of the land plot and the general investor. In accordance with the investment contract, the administration provides the investor with an investment object - a land plot, on the territory of which the investor, using his own and borrowed funds, builds a residential building. Under the terms of the contract, the general investor has the right to attract co-investors to finance the construction of the facility, who ultimately receive ownership of the part of the residential building they have invested (apartment, block of apartments, etc.).

Second level. Agreements are concluded between the general investor and co-investors (legal entities and individuals) to attract investments. Co-investors - legal entities, in turn, attract other co-investors. There may be several such levels.

The standard form of contracts used at the second and subsequent levels is not approved by law, so in practice you can find several versions of them. Until recently, the most common was an investment agreement, the subject of which was financing by a co-investor of construction in exchange for receiving a share in the future in the form of an apartment (several apartments). Let's consider how such transactions are reflected in accounting and tax accounting.

1. Accounting for transactions with an investor performing the functions of a customer and attracting additional co-investors:

Debit 76, Credit 86 - reflects the debt of the shareholder in the amount established in the investment agreement concluded with him;

Debit 51, 50, 10, 43, 41, Credit 76 - funds received from the shareholder in payment for equity participation in the amount established in the investment agreement concluded with him.

Raised funds from other investors and co-investors are not subject to taxation in accordance with paragraph 14, paragraph 1, article 251 of the Tax Code of the Russian Federation.

Funds received by an organization performing the functions of an investor-customer from investors (individuals and legal entities) under agreements for shared investment in housing construction within the framework of an investment project constitute a source of targeted financing and are not subject to VAT in accordance with paragraph 4 of paragraph. 3, Article 39 and paragraph 1, paragraph 2, Article 146 of the Tax Code of the Russian Federation (Letters of the Department of the Ministry of Taxes of Russia for Moscow dated 06/21/2001 N 02-11/27695, dated 11/14/2001 N 02-14/52358, dated 06/04. 2002 N 24-11/25818).

In the process of capital construction, the cost of the object is formed in the accounting registers in the amount of actual costs:

Debit 10, Credit 60 - materials were purchased from the supplier;

Debit 19, Credit 60 - VAT is reflected on materials purchased from the supplier;

Debit 20, 23, 25, 26, 29, Credit 10, 02, 70, 69 - materials, depreciation, wages and deductions from wages are written off as current costs;

Debit 08, Credit 20, 23, 25, 26, 29 - costs of organizing construction are written off as costs for capital construction of the facility;

Debit 08, Credit 60 - invoices from contractors for completed construction and installation work were accepted for payment;

Debit 19, Credit 60 - reflects VAT on work performed by contractors.

Upon completion of capital construction of an object, the investor-customer presents it for acceptance into operation, which is drawn up in standard forms N KS-11 “Acceptance certificate of a completed construction facility” or N KS-14 “Acceptance certificate of a completed construction facility by the acceptance committee.”

When transferring a share owned by co-investors under a shared construction agreement, the following entries are made:

Debit 86, Credit 08 - reflects the generated value attributable to the co-investor in accordance with the shared construction agreement;

Debit 86, Credit 19 - reflects the amount of accumulated VAT belonging to the co-investors, in accordance with the participant’s share under the terms of the agreement.

When the investor-customer transfers to the co-investor a part of the object (apartments) put into operation by completed capital construction, there is no change in the owner of this part of the object (apartments), since by investing part of the object, the co-investor reserves the right to purchase the financed property, and, therefore, The investor-customer does not have the obligation to calculate and pay VAT.

The investor-customer also does not have the obligation to calculate and pay corporate income tax on the transferred property within the limits established in the equity participation agreement (Clause 17 of Article 270 of the Tax Code of the Russian Federation).

The transfer of part of the object (apartments, built-in premises) from the investor-customer to the co-investor is carried out at the actual cost, including VAT.

When transferring objects to a co-investor, the investor-customer issues an invoice in two copies indicating the actual cost of the transferred apartments and reflecting the amount of VAT included in the cost of the transferred apartments. One copy of the invoice is transferred to the taxpayer-investor, the second is filed in the journal of issued invoices without registration in the sales book of the investor-customer.

The investor-customer issues invoices to the co-investor after the execution of the act of implementation of the investment contract, i.e. within five days after the transfer of apartments in accordance with the established procedure in accordance with clause 3 of Article 168 of the Tax Code of the Russian Federation.

The amount of VAT reflected in the invoice when transferring apartments and built-in objects is determined in proportion to the share in the constructed object attributable to the co-investor, based on the tax amounts recorded on account 19.

In addition, the basis for the customer-investor to issue invoices to co-investors is a summary statement of construction costs and a certificate calculating the share attributable to each co-investor (Letter of the Department of the Ministry of Taxes and Taxes of Russia for Moscow dated 06/04/2002 N 24-11/25818).

According to clause 15 of section VI of the Accounting Regulations “Accounting for agreements (contracts) for capital construction” (PBU 2/94), approved by Order of the Ministry of Finance of Russia dated December 20, 1994 N 167, in the case of settlements between the developer and the investor for the commissioned object under the contract the cost of its construction, the financial result also includes the difference between this cost and the actual costs of constructing the facility, taking into account the costs of maintaining the developer. Thus, the main (general) investor, performing the functions of a customer, may experience savings (investment income) as a result of the use of raised funds, which, in accordance with the terms of investment (equity) agreements, remains at his disposal.

The amount of excess of the final contribution of the co-investor over the actual cost of the apartments, which arises at the time of execution of the act of implementation of the investment contract and remains at the disposal of the investor-customer, unless otherwise provided by the investment agreement, is subject to VAT for the investor-customer. For the specified amount of funds, the investor-customer draws up an invoice in one copy, which is registered in his sales book:

Debit 86, Credit 91, subaccount “Other income” - income is reflected in the amount of savings (including VAT);

Debit 91, subaccount “VAT”, Credit 68, subaccount “VAT” - VAT is charged on the amount of income received.

2. Accounting for transactions with a co-investor participating in shared construction.

Investors can transfer funds, construction materials, tools, etc. as a contribution in accordance with Federal Law dated February 25, 1999 N 39-FZ (as amended and supplemented as of August 22, 2004). When calculating corporate income tax, contributions under a shared construction agreement are not considered expenses (Clause 17, Article 270 of the Tax Code of the Russian Federation).

When determining the tax base for corporate income tax, expenses in the form of the value of property transferred as part of targeted financing in accordance with paragraph 14, paragraph 1, Article 251 of the Tax Code of the Russian Federation are not taken into account.

Settlements for the transfer of assets as investment contributions are carried out on account 76 “Settlements with various debtors and creditors”. In this case, a sub-account “Settlements with Investor” can be opened.

The transfer of money and other property as a contribution to shared construction in accounting is reflected by the entry:

Debit 76, subaccount “Settlements with investors”, Credit 51 - reflects the amount of transferred assets.

If the investor is engaged in construction investment professionally, i.e. for further transactions with real estate in order to generate income, then instead of account 76, account 60, subaccount “Settlements for advances issued” can be used.

Often an investor (co-investor) supplies raw materials and supplies as investment funds. Contributions under equity participation agreements in housing construction are investments (Article 1 of Law No. 39-FZ of February 25, 1999).

Property transferred as an investment is not a sale (clause 4, clause 3, Article 39 of the Tax Code of the Russian Federation), therefore, the transfer of materials, equipment, raw materials and other assets as shared contributions is not subject to VAT and is not taken into account when calculating the tax base for the tax. on the profits of organizations.

In accounting, transactions for the transfer of materials are reflected as follows:

Debit 76, Credit 10, 01, 41, 43 - the cost of transferred materials is written off;

Debit 76, Credit 91, subaccount “Other income” - the difference between the actual cost of materials and the price at which they were transferred to the investor-customer is taken into account;

Debit 91, subaccount “Other expenses”, Credit 68, subaccount “VAT” - VAT previously reimbursed from the budget on materials transferred as investments (if it was claimed for deduction) has been restored.

If the transfer of materials, equipment, etc. from the co-investor to the general investor occurs not in accordance with the equity participation agreement, but under a separate supply agreement, the procedure for recording transactions will be different:

Debit 62, Credit 91, subaccount “Other income” - income from the transfer of materials is reflected;

Debit 91, subaccount “Other expenses”, Credit 10 - the cost of transferred materials is written off;

Debit 91, subaccount “VAT”, Credit 68, subaccount “VAT” - VAT is charged on the amount of materials sold;

Debit 76, Credit 62 - the debt of the shareholder for payment for participation in construction was offset against the transferred materials.

As a rule, co-investors are individuals, and they purchase apartments for their own use.

Common mistakes

Error:

The developer reflected in the accounting the funds of the shareholders transferred to him under the shared construction agreement as revenue.

A comment:

Investor money is not revenue; funds are recognized as targeted financing.

Error:

The developer imposes VAT on the funds of shareholders under a shared construction agreement.

A comment:

Money transferred by shareholders is not subject to VAT, since shared construction projects are not taxed.

Answers to common questions about shared construction accounting

Question #1:

Can a developer carry out the construction of a shared construction project, thereby providing services to shareholders, if the contract does not provide for a division of the contract price into covering construction costs and remuneration for the developer?

Answer:

No, in this case there is no need to talk about the services provided by the developer.

Question #2:

Savings and cost overruns for the developer under a shared construction agreement are established for the construction project as a whole. Are savings calculated for tax purposes subject to VAT?

Answer:

This depends on the economic nature of the amount in question. If savings were created because funds to cover construction costs were not fully used, the savings are attributed to an increase in the developer's remuneration (revenue). If the contract price does not include a fee for the developer's services, the savings cannot be recognized as his revenue, and then it is not subject to VAT.