Deferred income - what is it? Application of the deferred income account

Deferred income is funds received or received in the coming month, quarter, year. Logically, it is possible to consider such a profit and the amount that the debtors will return. However, this is not quite true. Next, we will understand how deferred income accounting.

General information

When products are shipped, they are sold. As a rule, in the process of this operation, revenues are reflected. The ownership of the goods passes at the time of transfer to the acquirer. There are no products in the warehouse; accordingly, it becomes possible to demand payment from the counterparty. In this case, there is no upcoming income. The prospects for a possible profit are also irrelevant. In practice, accounting records only completed operations and proceeds from the principle of compliance. It comes down to the following. Revenues must be consistent with the costs at which they are received.

Example

The above principle is easy enough to understand, but very difficult to implement. Suppose the company received the rent for 3 years in advance. The question of which account to use to reflect funds does not arise. The problem is exactly what amount should be shown as profit. At first it was decided to reflect all received funds as income. However, subsequently, when the principle of compliance began to be applied, annual reports began to be drawn up. It is logical that income should include profit for the year. As for the remaining amount, they are not shown in the report.

Another question arose - where to relate them. The simplest solution was to reflect it as payables. This is explained by the fact that the lessor, having received the required amount, recognizes its obligations to the lessee. Accordingly, in each next year the debt will decrease, and the profit will increase. However, this approach is of little practical use. The fact is that accounts payable is an obligation that requires repayment. And in the considered example, it is absent, because the owner has already received the money, and the object has provided.

Account Introduction

Usually deferred income is assets that are already received. In most cases, they are presented in cash. Given the principle of comparability, these revenues must be compared with the costs at the expense of which they arose. This is where the question arises of the correct sharing of profits. It’s not known for certain how a way was found to show revenue of the future periods. Line 1530, which summarized information about such revenues, exists now. Subsequently, it was fixed that each article should correspond to the balance of the account for the General Ledger. As a result, the question was resolved, where reflect deferred income. The account of the same name 98 was introduced. The amount on page 1530 is equal to the aggregate credit balance in the account. 98 and 86 (in terms of targeted financing from the budget, grants, technical assistance, etc.).

Account Description

Introduction c. 98 was related to rental reflection problems. When they were resolved, accountants realized that with the help of the approach found, it is possible to regulate financial income. As a result, a large number of sub-accounts arose, which include revenue of the future periods. it:

1. Profit earned in the coming years.
2. Gratuitous income.
3. Upcoming shortfall arrears discovered in previous years.
4. The difference between the amount of recovery from the perpetrators and the book price of shortfalls.

Let's consider them separately.

Gratuitous income

Previously, they were called gifts, which involved the conclusion of a gift agreement. Currently, such income is usually called sponsorship. Until a certain period, they were attributed to the income of the period in which they were received. Meanwhile, there were specialists who pointed out that real money should be shown in documents. Gratuitous income was estimated at 1 rub.

With the improvement of the accounting system, a new approach has been developed. Received free of charge objects were capitalized on the account. 08 sec CD 98.2. Accordingly, gifts were recognized as revenue of the future periods. it means that in the documents this profit was shown as "stretched" for several years.

Depreciation

Deferred income in the balance sheet is funds with conditional market value. If it is overestimated, which in some cases also takes place in good faith, profit can be increased by reducing it through depreciation. If the estimate is underestimated, then the receipts will be adjusted accordingly. When it comes to fixed assets, on the one hand, depreciation should be accrued in future periods. On the other hand, income from upcoming time periods is written off to current expenses. They level each other.

As a result, it turns out that the use of equipment becomes free. The fact is that depreciation absorbs revenues, but it does not fall on the cost of products. Meanwhile, it is theoretically more correct to admit that for OS received free of charge, depreciation is not calculated. Recording is made solely by assigning a portion of the proceeds of the future period to the current costs. This is confirmed by the fact that depreciation is considered to be the transfer of previously committed expenses, and not by the OS renovation (renewal) fund. Other gratuitous income, earmarked funds acting as deferred income reflect the same way.

Debt arrears

The case of rent entailed certain consequences for accounting for future periods. At first, specialists did not see any problems, but then they began to include everything that was possible in this category. At first it was gratuitous values, then past losses. There were reasons for such actions. Consider the reason for the attribution of debt on shortfalls to deferred income.

Postings are made based on the identification of the relevant fact. The accountant relates the detected shortage in dB. 94. At the same time, the account is credited. 98.3. The developers of the chart of accounts apparently assumed that the more shortages were discovered, the more revenues thereafter. If the materially responsible employee acknowledges the fact and gives an obligation to compensate for the deficiency, a receivable is formed. It is unlikely that it will ever be repaid. In any case, completely.

If the materially responsible employee does not admit guilt, then there is no talk of any income at all. The current chart of accounts provides for a regulatory account. 98.4. It summarizes information about the difference between the amount to be recovered from the perpetrators and the book value of shortages. This account is used exclusively at trading enterprises that use the posting scheme of products at the selling price.

Nature of the account

Cf. 98 clearly refers to the category of financial distribution items. Here it is necessary to recall the underestimated problem of accounting policies. The question is as follows. What exactly from incomes to attribute to the current, and what - to the future period? To some extent, the answer to it depends on the professional discretion of the chief accountant. Meanwhile, characterizing the sc. 98, perhaps it would be more correct to classify it as additional.With proper management, he supplements the 99th account. In this case, the interested person will see the actually received, and not formally fixed amount of profit.

Page 1530

As mentioned above, they carry it deferred income in the balance sheet. it:

1. Budget financing.
2. Balances not used at the end of the year. They are on the account. 86.
3. Amounts of grants received, technical assistance, etc.

Lessor companies are also entitled to include the difference between the amount of payments and the value of the property held by the recipient in the composition of such receipts. All other income is classified as current or payable. In the general case, the values ​​for p. 1530 as of December 31 of the last year and as of December 31 of the period preceding the previous one are transferred from the balance sheet for the previous year.

Nuances

Some novice professionals often ask: deferred income - asset or liability? Actually, the question is quite logical. After all, in fact, we are talking about revenues, profits. Meanwhile deferred income - liability. Another situation with the costs of the coming years (quarter, month). They relate to the asset. In this case, there is a certain accounting paradox. Actually received funds presented in the liability and materialized in the asset reduce the reported profit. At the same time, the costs of the coming years (months, quarters) increase it.

Another point concerns taxation. Deferred expenses at STS (income minus costs) are absent. There is no them in another version of the "simplified". In addition, there are no revenue of the future periods. STS does not provide for such concepts at all.

Record Specifics

As mentioned above, income for upcoming periods is shown on accounts 98 on CD. Accounts reflecting cash flows or settlements with creditors and debtors correspond with it. By db count 98 amounts are written off when the periods to which they relate occur. For example, usually under the terms of the lease agreement, users of the property pay a fee in advance for a quarter or half a year. This amount may not relate fully to the income of the period in which it was received. Funds are divided into equal shares. Each of them is recognized as monthly income for the current period. In this case, the amount received falls first to the account. 98. The wiring is as follows:

• Db sc 51 cd 98.

This entry is compiled for the entire amount received. Then each month, in equal proportion, the income of the coming periods is written off to the profit of the current:

• Db sc 98 cd 91.

Consider an example. LLC concluded a lease agreement on February 18, 2017 for 120 days. The acceptance certificate was signed on March 1. According to the terms of the agreement, the tenant must transfer the amount six months in advance. December 25, 24 thousand rubles were received in the owner’s account, including VAT of 4 thousand rubles. The accountant makes the following entries:

• Db sc 51 cd 98.1 - receipt of funds.
• Db sc 98.1 cd 68 - VAT calculation.

At the end of each month, a record is made:

• Db sc 98.1 cd 90.1 - rent for the month is reflected in the income from the sale of services.
• Db sc 90.3 cd 68 - VAT is charged.
• Db sc 68 cd 98.1 - tax has been restored regarding the amount attributable to the reporting month.

Audit

How is deferred income inventory? In the course of the audit, first of all, the legality of assigning the amounts received by the enterprise to the category of income under consideration is checked. Recall that in the income of the coming periods include:

1. Revenues received for the account of months, quarters, semesters, years. These include the amount of rent, monthly fee, revenue from passenger traffic on quarterly / monthly tickets, etc.
2. The value of assets received free of charge.
3. The forthcoming receipt of arrears of shortfalls discovered during the reporting period for previous years and recognized as a guilty materially responsible employee or awarded in the framework of the lawsuit.
4. The difference between the amount to be recovered from the perpetrator for missing material or other values, and their value.

The audit also verifies the appropriateness of revenue estimates. When capitalization of income for the coming periods, it is carried out in the following order:

1. Amounts received on account of the upcoming month, quarter, year, half year are accounted for in the amount of payment received upon delivery (according to the contract).
2. The value of assets transferred to the enterprise free of charge is estimated in accordance with the market price. The value that existed at the time of capitalization is taken into account.
3. Debt arrears from previous years discovered in the current period are carried at market price. The value in force at the date of the guilty plea by the materially responsible employee or the issuance of a court order is taken into account.
4. The amount of the difference in the assessment of shortages to be recovered is calculated as the difference between the market price of the missing values ​​and the value at which they were capitalized.

During the audit carried out at the end of the year, the validity of the resulting balances on sub-accounts is checked:

1. "Amounts received for future periods." Only funds that relate to the next year should be shown here.
2. "Gratuitous receipts." This subaccount reflects the market value of property received free of charge in that part that relates to the undepreciated value (if depreciation is made), or the inventories that were not written off to the accounts of production costs.
3. "Upcoming arrears of arrears discovered in previous years." This subaccount reflects the market value of tangible assets related to the unpaid part of the obligation.

In the course of the audit, the correctness of writing off the amounts shown on the account summarizing information on property received free of charge is also checked. Operations are carried out in the following order:

1. For OS provided free of charge to the enterprise - during depreciation.
2. For other material values ​​received free of charge - as they are assigned to production.

Conclusion

The main problem that the accountant faces is to establish a boundary between the revenues that can be immediately included in the current period and those that should be attributed to the future. When solving it, the experience of a specialist and his professionalism will be of great importance. In most cases, there are no serious difficulties. Difficulties may arise with amounts due on arrears resulting from shortages. If the responsible persons do not admit guilt, then the company will not just not make a profit, but will suffer certain losses. If the problem cannot be resolved peacefully, then they can be reimbursed only through a court in the framework of the lawsuit.