Account 91 in accounting: "Other income and expenses"

To the plan accounting accounts accounting 91 account is included to summarize data on operating, non-operating expenses and income. These revenues and expenses are referred to as “other”. Further we will consider how records are made, which revenues and expenses can be attributed to this article.

What does account 91 reflect in accounting?

Credit accounts show receipts related to:

1. Assets of the company provided for temporary use for a fee. These funds are reflected in correspondence with settlement items or cash-in accounts.
2. Granted for temporary use rights arising from patents for an invention, industrial designs, and other products of intellectual activity. They are also reflected in correspondence with cash accounts or settlements.
3. Participation in the authorized capital of a third-party company, interest and other income from securities. These receipts are shown in correspondence with accounts for accounting calculations.
4. Sale and other write-offs of fixed assets and other assets other than Russian cash, products. These incomes are reflected in correspondence with articles of accounting calculations or financial means.
5. Operations with packaging.
6. Obtaining assets at no cost. These receipts are shown in correspondence with the income items of the coming periods.

Additionally

The profit that the organization received under the terms of the simple partnership agreement also reflects 91 accounting accounts. In this case, the entries are compiled in correspondence with Art. 76, showing calculations with various entities. The article under consideration reflects the interest receivable or received for the provision of funds of the enterprise for use. They are shown in correspondence with articles of financial investments or cash-in. Penalties, fines, penalties accrued for breach of contractual terms, recognized or received are also transferred to 91 accounts. Postings are made by correspondence with articles on settlements or reflection of cash. Other expenses and income include:

• Revenues for losses incurred.
• Profit of previous periods discovered in the reporting year.
• Amounts payable.
• Exchange differences.
• Other income recognized as non-operating and operating, except emergency.

Debit

The Rules provide for expenses that are transferred to account 91. In accounting, the costs associated with:

1. Granting on a paid basis for temporary use / ownership of the enterprise’s assets, rights that arise from patents for industrial designs, inventions, other intellectual property, as well as participation in the capital of other organizations.
2. The disposal, sale and other write-off of fixed assets and other assets other than money in domestic currency, goods.
3. Operations with packaging.
4. Payment for services provided by credit organizations.
5. The content of production facilities and mothballed facilities.
6. Compensation for the loss caused by the organization.

Costs incurred in connection with litigation are also included in account 91 in accounting (examples of entries will be given below).

Other expenses

In account 91 in accounting also include:

1. Losses of previous years identified in the current year.
2. Deductions to the reserve for the depreciation of investments in shares, reduction in the cost of mat. values ​​for doubtful debts.
3. Amounts of receivables for which the statute of limitations has expired, other bad debts.
4. Exchange differences.
5. Other costs that are recognized as operating or non-operating.

Account 91 in accounting: subaccounts

They can be opened separately for expenses and income, as well as for their balances. In account 91.2 in accounting records are entered throughout the reporting year cumulatively. Every month, by comparing debit turnover for other expenses and credit - for incomes, their balance is determined. It is written off in the account. 99. As a result, the synthetic 91 account in accounting does not have a balance at the reporting date. However, analytical articles have it.

In particular, on account 91.02 (score accounting). This means that if the balance is formed within a month when other expenses / income is paid, the balance is formed during the closing operation. It is reflected in the analytical article of income. If income exceeds expenses, the balance will go to the account. 91.01 (accounting account). This will be a cd, and it indicates profit. If expenses are higher, then the balance will be formed on the debit, which will ultimately increase the loss.

Practical implementation

Consider how entries are made on the account. 91.02 (accounting account). These are typical cases:

Important point

Any business entity incurs expenses and earns income by carrying out ordinary activities. They do not include what is specified in the charter, as many experts believe. Common activities are those that are performed continuously or quite often. To a significant extent, of course, they must coincide with the statutory. However, they are not equal to each other. Often the charter lists more activities (for all sorts of cases) than the company actually carries out. All other business transactions are reflected in 91 accounts. Operating expenses / income are associated with the activities of the company, but do not constitute its objectives. Non-operating income / expenses are determined by the consequences of such work. The compilers of the instructions for the plan of accounts combined these categories into one. However, it is advisable to consider them separately.

Operating income

First of all, these are receipts that are related to the provision of property for rent. When the payment date arrives, the specialist makes the following entry:

DB 76.3 "Calculation of relying dividends and other income."

Cd 91.1 (accounting account for other income).

As a result, profit does not appear upon receipt of a lease payment, but when the right to demand it arises. The lessor acts from that moment on as a lender to the tenant and remains with him until the obligation is settled. If the owner gives the client the right to use the products of intellectual labor, income from such operations is reflected similarly. If the moment of occurrence of the obligation coincides with the maturity date, it will be correct if entries are made through the account. 76.3. A similar pattern applies when reflecting:

1. Profits from the implementation of joint activities.
2. Income arising from participation in the authorized capital of third-party companies, including securities.
3. Interest received on cash held in banks or provided on credit.

Non-operating income

They form a complex of various operations and are credited to account 91. In accounting for dummies, it is better to analyze examples in detail. Consider the following case.

Counterparties recognized the company's right to a fine or penalty for non-fulfillment of contractual terms or this happened by court order. As soon as the obligation or consent of the client to make the payment appears, the company has the income

- DB 76.2 "Settlement of claims."

- Cd 91.1 “Other income”.

But as a rule, such calculations should be considered as a disputed debt. Claims to customers (for example, suppliers for improper shipment) are entered in the debit of this account. Then a record is made:

- DB 76.2.

- Cd 60 "Settlements with contractors and suppliers."

Accounts receivable are thus reserved:

- DB 91 "other costs".

- Cd 63 “Provisions for doubtful debts”.

After the court decision, you can make the following entry:

- DB 63.

- Cd 91.

Such a scheme will allow balancing actions before receiving payment:

- DB 51 "R / s".

- Cd 76.2 “Settlement of claims”.

These records indicate that the company had no income, but only compensated for losses incurred previously. If the claim is not satisfied, the disputed debt is written off at the expense of the reserve:

- DB 63 Cd 76.2.

This will show the flow at the moment at which it actually arose.

Unclaimed Debt

It is currently recognized as non-operating income. For example, the debt to the supplier has not been repaid. The specialist makes the following entry:

- DB 60 "Settlement with contractors / suppliers".

- Cd 91.1 “Other income”.

A similar scheme is used for unclaimed deposited salary:

- DB 76.4 Cd 91.1.

Classification

The organization relates some expenses / income either to ordinary activities or to other expenses / revenues (account 90, 91 in accounting). Among them are funds from:

1. Provision on a fee basis for temporary possession / use of own assets under a lease.
2. Participation in the capital of third parties.
3. Granting on a paid basis the rights that arise from patents for samples, inventions and other intellectual products.

The classification of these expenses / receipts is carried out in accordance with the activities of the enterprise, the type of income, the conditions for their receipt, etc. In many cases, this separation is not accompanied by any difficulties. For example, the income from ordinary activities include:

• Proceeds from the sale of products are for manufacturing companies.
• Profit from the sale of goods - for trading companies.
• Proceeds from the provision of transportation services - for transport enterprises and so on.

Article diversity

The above income is reflected in the account. 90 "Sales". With regard to costs, the costs of ordinary activities are first shown on DB mid. 20, 26, 44. They are subsequently deducted from DB account. 90. If an enterprise only leases out property or exclusively invests assets in the authorized capital of other companies, etc., such income will be from ordinary activities. If any expenses / profits are recognized as other, then they are accounted, respectively, in account 91. The financial result of the operations performed is also determined by it.

Clarification of concepts

It is worth noting that the term operating expenses / income was first used in the Report on financial results and instructions on the rules for filling out reporting forms. These documents are approved by the relevant order of the Ministry of Finance. Up to this point, all costs and revenues were clearly divided into the following groups:

1. From the sale of products (services or works).
2. From other sales (fixed assets and other assets).
3. Non-operating expenses / income.

The sources for obtaining information about these costs and revenues were also clearly defined. So, for the first group the sc. 46, for the second - 47 and 48, for the third - 80. All proceeds that were not related to the sale were non-operating. With the introduction of the concepts of operating expenses / revenues, all this logic was violated. This was due to the fact that some revenues / expenses that were not related to the sale and, in fact, were non-operating, became operational. In particular, they include expenses / income relating to:

• Rental property.
• Write-offs of OS due to their obsolescence.
• The contents of the canned production facilities.
• Securities services and so on.

Classification difficulties

However, there is no clear definition of operating income / expenses. The instructions for filling out the reporting forms indicated that they mainly include costs and receipts from operations related to the movement of property. But in this case, a contradiction arises, since there is no movement, for example, when renting a building or keeping a conserved object. There is no definition of operating expenses / income in the Accounting Regulations, in the methodological recommendations explaining the procedure for generating indicators in the statements. This is a serious gap. It leads to a vague distinction between operating and non-operating income / expenses. As a result of this, some revenues and expenses move from one category to another. As a result, when separating, the accountant does not have to think logically, but studies regulatory documents and finds out which expenses / incomes the Ministry of Finance considers to be non-operating and which are operational.

Recognition Moment

It has a big impact on income. The procedure in accordance with which revenue recognition is carried out is regulated in PBU 9/99, in clause 12. The rent or license fee may not act as income from the main activities. In this case, it is recognized in accounting in accordance with the assumption of the temporary certainty of economic events, the terms of the contract. To record revenue other than income from core activities, three conditions must be met simultaneously:

1. The company has the right to receive it. It can be based on the relevant agreement or confirmed in another way.
2. The amount of revenue can be determined.
3. There is confidence that, following the results of a specific operation, an increase in the economic benefit of the company will occur.

If these conditions are met, revenue in accounting is recognized from:

1. Provision for temporary use / ownership for a fee of the company's own assets.
2. Participation in the capital of other companies.
3. Granting for temporary use / possession of rights arising from patents for inventions, designs or other objects of intellectual labor.
4. Realization of fixed assets and other assets other than money (except foreign currency), goods, products.

The same category includes interest that is received from the provision of funds by the company for use. They are accrued for each expired reporting period in accordance with the contractual terms. As for the penalty, penalties, fines, damages reimbursed to the organization, they are recognized in the time period in which the relevant court decision was made. Amounts for deposits and payables whose term has expired are recorded in the period when it ended. The results of the revaluation of assets in accounting are recognized in the period to which the date on which the revaluation was performed relates. Other income is recorded in the course of their identification (education).