Repair of fixed assets: how to reflect in accounting

Accounting for the repair of fixed assets - accounting of the costs of restoring the operational characteristics of fixed assets (property). Fixed assets include: buildings, structures, machines, vehicles, tools, etc.

The organization's property can be partially restored through current (medium) repairs or completely through major repairs and reconstruction/modernization. Current repairs involve the replacement of functional parts of a fixed asset: parts, spare parts, mechanisms, etc. During a major overhaul, the technical indicators of the object in question change, which improves the production properties of the OS.

Cost accounting for each type is carried out differently. In order to avoid misunderstandings with the tax authorities regarding accounting for repairs of fixed assets, it is necessary to understand their differences. In the case of routine repairs, costs that are related in nature and are written off in the current period; in case of major repairs or reconstruction, expenses go towards increasing the value of the fixed asset (property).

The purpose of repairing fixed assets is to eliminate technical and functional faults, carry out planned preventive measures to prevent premature failure and maintain the performance of fixed assets.

To carry out repairs of a fixed asset, it is necessary to formulate a repair plan and calculate an estimate (costs by type of repair work). Completion of repair of a fixed asset - acceptance of a modernized or restored object for registration on the basis of an acceptance certificate for fixed assets.

How is repair different from reconstruction and modernization?

Since repairs, reconstruction and modernization are reflected differently in accounting and taxation, it is important to classify them correctly. The cost of restoration work does not matter to distinguish between such concepts. What matters here is the purpose for which such work is carried out (see table):

To determine whether a property restoration is a renovation, renovation, or upgrade, refer to the following documents:

• Regulations on carrying out planned preventative repairs of industrial buildings and structures MDS 13-14.2000, approved by Decree of the USSR State Construction Committee dated December 29, 1973 No. 279;

• Departmental Construction Standards (VSN) No. 58-88 (R), approved by order of the State Committee for Architecture under the USSR State Construction Committee dated November 23, 1988 No. 312;

• by letter of the USSR Ministry of Finance dated May 29, 1984 No. 80.

This is stated in the letters of the Ministry of Finance of Russia dated March 24, 2010 No. 03-11-06/2/41, dated February 25, 2009 No. 03-03-06/1/87 and dated November 23, 2006 No. 03 -03-04/1/794.

Situation: can the work be considered a repair if, as a result, the characteristics of the fixed asset have improved? Before restoration, the main asset was faulty.

The answer to this question depends on the nature of the improvements.

In general, repairs are necessary precisely to restore the working condition of the property, and not to change its properties. If the characteristics of the fixed asset have improved, then the work may be considered reconstruction or modernization. That is why it is necessary to clearly define what the improvements are related to.

Work is recognized as repair work only if, as a result, properties change that are not related to the workload and technical and economic indicators of the object. In addition, it is important that such restoration does not affect the quality and range of products (works, services). Otherwise, the cost of restoration work will not meet the criteria for repair costs.

This conclusion follows from paragraph 2 of Article 257 of the Tax Code of the Russian Federation. A similar point of view is reflected in letters of the Ministry of Finance of Russia dated April 22, 2010 No. 03-03-06/1/289, dated December 29, 2009 No. 03-03-06/1/830, dated October 9, 2006 No. 03-03-04/4/156 and dated May 27, 2005 No. 03-03-01-04/4/67.

The courts share this position. Thus, if the work led to changes in the technical and economic indicators of the object and its purpose, then they cannot be considered repairs (see, for example, the determination of the Supreme Arbitration Court of the Russian Federation dated March 3, 2011 No. VAS-173/11).

By the way, there is an interesting position of the courts on replacing faulty parts of an object with more advanced or powerful ones. According to the arbitrators, this is not modernization. The main thing is that as a result of such a replacement, the technological or production purpose of the facility does not change. Even if performance characteristics improve, the costs of replacing faulty components and assemblies are recognized as repair costs. This position, for example, is expressed in resolutions of the Federal Antimonopoly Service of the Central District of February 9, 2010 No. A14-14803/2008/500/24, of the North-Western District of August 21, 2007 No. A56-20587/2006, of the Moscow District of August 14 2006 No. KA-A40/7489-06, Ural District dated June 7, 2006 No. F09-4680/06-S7).

Do-it-yourself OS repair

LLC "Fortuna" carries out repairs of the OS facility in an economic way. The organization does not create a reserve for repairs, so all costs are accepted as expenses of the current period. The cost of the own materials spent is 3,600 rubles. Costs for remuneration of workers performing repairs - 10,000 rubles.

Postings for repairing the OS in an economic way will be as follows:

With the economic method, all amounts from cost accounts are ultimately collected on account 23 “Auxiliary production”, which is closed on account 20 “Main production”.

Let's assume that an organization creates a reserve for OS repairs. Then the costs will be written off against the reserve.

Transactions for writing off the costs of repairing the OS using an economic method at the expense of the reserve will be as follows:

* The calculation of the Social Insurance Fund is given as an example of the calculation of insurance premiums.

Types of repairs

Repairs are classified as follows. Depending on who is doing the work: it can be repaired on its own (self-employed) or with the involvement of a contractor. And depending on the frequency and complexity, repairs can be current or major.

The first division is clear. And let's look at the second one in more detail. Typically, routine maintenance is the maintenance of fixed assets to keep facilities in working order. Major repairs involve replacing basic elements, parts, structures, etc.

You can determine which specific repairs are considered current and which major ones. In this case, you need to focus on documents developed by internal technical services (letter of the Ministry of Finance of Russia dated January 14, 2004 No. 16-00-14/10).

Contract OS repair

GreenLight LLC entered into an agreement with the contractor to repair the escalator. The total amount of the OS repair contract was 330,400 rubles, including VAT of 50,400 rubles.

Contractual OS repairs will be as follows:

When repairing at the expense of the reserve:

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What documents need to be used to justify the need for repairs?

The need for repairs can be confirmed by a report on identified faults and defects of the fixed asset, or a defect sheet. For some industries, standardized forms of such documents are provided. For example, defects in the handling and transport equipment of sea trade ports can be documented using a defect sheet, which was approved by Decree of the Ministry of Transport of Russia dated January 9, 2004 No. 2. Defects in the main elements of pipelines of thermal power plants are reflected in the sheet of pipeline defects (approved by Decree of the State Mining and Technical Supervision of Russia dated June 18, 2003 No. 94).

If there is no unified form of a document confirming the detected defects, then you can develop a form yourself. For example, an act on identified faults (defects) of a fixed asset item. The main thing is that this form contains all the required details. The report indicates the faults of the fixed asset and proposals for their elimination.

How many copies of the report on identified faults, defects of fixed assets or statements should be prepared? It all depends on who owns the property and who will do the repairs:

• if you repair your own property using your own means, that is, on your own, then one copy “for yourself” will be enough;

• when the work will be performed by contractors, draw up a document according to the number of participants. Representatives of all parties involved must sign each copy.

If you are repairing new equipment, the defects of which were identified during installation, then you need to record them in a report on the detected equipment defects. For example, according to form No. OS-16. This should be done in relation to objects that have not yet been registered as fixed assets.

List of works

Everyone understands that the current repair and maintenance of housing includes a certain list of actions.

But meanwhile, there is a regulatory legal act that lists all types of work, which includes the maintenance and ongoing repairs of residential premises.

The list is introduced to us by Government Decree No. 491 of August 13, 2006. In accordance with this act, the management company or HOA, as part of the supervision of the maintenance and repair of housing, must perform a number of actions.

Let's see what work is included in maintenance and current repairs , and what we pay for:

1. Work on lighting of common property.
2. Cleaning common areas in accordance with sanitary standards.
3. Land works in areas near an apartment building (landscaping).
4. Collection of household waste , as well as its removal independently or with the help of appropriate companies.
5. fire safety measures .
6. Ensuring that the premises maintain the legal temperature and humidity levels.
7. Inspection of common premises in order to identify non-compliance with standards, as well as those that threaten the life, health and convenience of residents.
8. Timely implementation of routine and planned repairs.
9. Preparation for use of common property.

This is not a complete list of work that is included in the maintenance and current repairs of an apartment building, which should be carried out by your management company or HOA.

In the list you can find out in detail the nuances of carrying out maintenance and repair actions, as well as the conditions for completing the actions of the HOA or management company.

But sometimes the needs of residents of an apartment building exceed the limits established by law, and additional work is required. What to do in such situations?

Is it possible to request anything additional?

If residents have additional requests for work on the current maintenance and repair of the common property of the apartment building, for example, landscaping the entrance and subsequent care of flowers, frequent renewal of paint on the walls, and so on, the management company or HOA has the right to refuse citizens such a request.

The service organization is not obliged to carry out actions not included in the list of works on repair and maintenance of housing..

However, residents may hold a meeting where representatives of the service organization will be asked to take responsibility for any actions and carry them out as normal, for which residents will be charged a fee . Read more about who is involved in ongoing home repairs here.

If the majority of residents vote positively for this idea, then they can invite the HOA or management company to draw up an additional agreement , which will indicate additional terms of cooperation, as well as payment.

If, from the very beginning of moving into the house, the residents had additional requirements, which they found out at the general meeting, choosing the method of managing the house and voting for one or another organization, the conditions can be spelled out initially in the agreement between the owners and the company.

Find out how to force the management company to make repairs at the entrance. After reading the article, you will know whether the payment for major repairs is mandatory or voluntary.

Who is entitled to benefits on payment for major repairs? Read here who has the right to apply for compensation and subsidies.

How to register the transfer of a fixed asset for repairs

Document the transfer of the object for repair. This will not have to be done only when the main asset is being repaired on site. This procedure follows from the instructions approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7.

When you transfer a fixed asset for repair to a special division of the organization, draw up an invoice for internal movement, for example, according to form No. OS-2.

If the repairs are carried out by a third-party organization with which a contract has been concluded, then the transfer of the object for repair is formalized, for example, with an act of acceptance and transfer of the object for repair. It can be compiled in any form. If the contractor suddenly loses or damages a fixed asset, the signed act will allow him to demand compensation for losses. If there is no act, then it will be difficult to prove the transfer of fixed assets to the contractor, as well as to demand compensation. This follows from articles 15, 702 and 714 of the Civil Code of the Russian Federation.

How to get a tax deduction for apartment renovation?

The main difference between the repair of fixed assets and modernization and reconstruction is that repair costs increase the organization's current costs, while modernization and reconstruction costs are reflected as capital investments and increase the initial cost of objects.

Repair costs consist of the cost of materials, spare parts, assemblies and components used for repairs. Repair costs include the wages of workers carrying out repairs and the amount of contributions for social insurance and security, as well as the cost of services of third-party organizations when carrying out repairs by contract.

Very often, for various reasons, an organization is not able to carry out repairs on its own. In this case, third-party organizations or individuals are brought in to carry out repairs. To do this, a contract must be concluded between the customer and the contractor.

Fixed assets during operation fail for various reasons, and in order to ensure their performance throughout the entire service life established when the object was accepted for accounting, fixed assets must be repaired.

At the expense of funds allocated for major repairs, work caused by a change in the technological or service purpose of a building or structure, increased loads and other new qualities cannot be carried out.

What documents should I use to formalize the acceptance of a restored fixed asset?

Acceptance of the repaired object is formalized by a special act. For example, according to form No. OS-3. It is filled out regardless of whether the repairs were carried out internally or by contract. Only in the first case do they fill out the form in one copy, and in the second - in two (for themselves and for contractors).

The act is signed by:

• members of the selection committee created by the owner of the property;

• an employee responsible for the repair of fixed assets or a representative of the contractor;

• employee responsible for the safety of fixed assets after repairs.

After this, the act is approved by the head. Next, the document is handed over to the accountant.

After receiving the report, reflect the information about the repairs carried out in the inventory card for recording the fixed asset or in the inventory book (intended for small businesses). To do this, you can use standard forms No. OS-6, No. OS-6a or No. OS-6b. This is stated in the instructions approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7.

When accepting buildings, structures or premises after construction and installation work, additional paperwork must be completed. Namely, the acceptance certificate in form No. KS-2 and a certificate of the cost of work performed and expenses in form No. KS-3. These forms were approved by Decree of the State Statistics Committee of Russia dated November 11, 1999 No. 100.

By the way, if parts were changed during the repair process, then you will need to draw up an act for replacing spare parts of the fixed asset. There is no standard form for such a document, so it can be drawn up in any form (Part 1, Article 9 of Law No. 402-FZ of December 6, 2011).

Advice : to simplify document flow, acts on the replacement of spare parts in fixed assets can be drawn up at the end of the month for each performer of work.

Situation: is it necessary to draw up an act of acceptance and delivery of a fixed asset during self-repair, for example, according to form No. OS-3?

Answer: no, it is not necessary if the main asset was not transferred to other departments during repairs.

This is explained by the fact that it is necessary to draw up acceptance certificates only when moving fixed assets from the customer to the contractor and vice versa. For example, if the object was transferred for repair to a contractor or to the organization’s repair service.

If, during repairs, the location of the object does not change, when the repairs are carried out directly “on the spot,” then acceptance and transfer of the fixed asset does not occur.

Situation: is it necessary to indicate in the act in form No. OS-3 the cost of materials used by the contractor to repair the fixed asset? The organization handed over spare parts to the contractor for repairs.

Answer: no, it is not necessary.

Form No. OS-3 is used for the acceptance and delivery of fixed assets from repairs (instructions approved by Resolution of the State Statistics Committee of Russia dated January 21, 2003 No. 7). Section 2 indicates the contractual cost of repairs. And the contractor must indicate the composition and cost of spare parts for the repair of fixed assets in the report on the materials consumed (Article 713 of the Civil Code of the Russian Federation).

Reserve for OS repair

The essence of the repair reserve is to distribute costs evenly across periods of the year. That is, expenses for repairs carried out in the current period are written off not to current costs, but to account 96. A reserve for repairs cannot be created for individual fixed assets; to calculate the reserve, the total cost of all fixed assets of the organization is taken.

An accounting reserve for OS repairs can be created by companies created at least 3 years ago. The reserve amounts are calculated based on the amounts of repair costs of previous periods - the average amount of costs for the previous three years is calculated. The amount of the reserve should not exceed this figure.

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Accrual of reserve for repair of fixed assets - postings

In the Rakita organization, the amount of repair costs for 2013 amounted to 50,000 rubles, for 2014 - 70,000 rubles, for 2015 - 60,000 rubles. The average amount is 60,000 rubles. ((50,000 + 70,000 + 60,000)/3). The reserve is created monthly, the amount reflected: 60,000/12 = 5,000 rubles.

In January 2021, the accountant creates a reserve for the repair of fixed assets:

Accounting

• contract method;
• in an economic way.

In the first case, repair work is carried out with the help of third-party contractors, with whom a contract is concluded; after completion of the work, the contractor draws up estimates for the work performed.

In the second case, repair work is carried out on its own.

The costs of repairing fixed assets are charged to production cost accounts, that is, they are included in the cost of production using the following entries: D20 (23, 25, 26, 44) K10 (60, 70, 69).

If the costs amount to a significant amount, then the organization can carry out repair work at the expense of a pre-formed reserve. This reserve is formed by gradually including certain amounts in the cost of production over a long period of time, while postings D 20 (23, 25, 26) K96 are made, where account 96 is called “Reserve for future expenses”, on which a reserve is formed for the loan. The amount of monthly deductions for the formation of the reserve is determined as 1/12 of the annual cost of repairs according to the estimate. During the repair process, all costs are written off to the account of this reserve using the following entries: D96 K10 (70, 60, 69..).

If at the end of the year there are funds left on the credit of account 96 (that is, the amount required for repairs was less than the formed reserve), then the remaining funds are written off to account 91 by posting D96 K91/1, thus account 96 is closed.

If the amount of the reserve is not enough to carry out repair work, then the missing funds are either received using an additional entry to increase the reserve fund D20 K96, or this amount is written off as expenses by posting D20 K10, 60, 70.

Postings for accounting for expenses for repairs of fixed assets: