Accounting account 97 involves a synthesis of data on costs incurred in the current period, but related to the coming years. Next, we find out what expenses are related to this article, how recording, writing off is carried out. The article will also provide clarifications to the provisions of the Instructions and the Chart of Accounts.
Characteristic
This article may reflect expenses related to mining and preparatory work, development of production facilities, units, plants, and other production equipment. Account 97 in the balance sheet shows the costs associated with the restoration of land and other environmental work, as well as measures to prepare production for operation in season. The article includes the amounts for the repair of objects belonging to the category of fixed assets, produced during the year unevenly (when the company does not form an appropriate fund or reserve) and so on. Data that contains 97 accounting account cost accounting, deducted from debit:
- Cf. 20 for the main production.
- Cf. 26 by general business expenses.
- Cf. 23 for auxiliary production.
- Cf. 44 at the cost of sales.
- Cf. 25 for general manufacturing expenses and so on.
Analytical accounting for cost items of upcoming periods is carried out in accordance with the types of costs.
Capitalization of expenses
Can account 97 be used to concentrate "temporary capital"? The developers of the Plan give several examples. On their basis, it is possible to identify such a basis for capitalization as: expenses incurred by the enterprise in the current reporting year, but relating to the upcoming periods, should be included in those time periods when income may or may arise due to these costs. 
Specificity
However, a substantial addition should be made to the capitalization clause in the paragraph above. In particular, expenses incurred in the coming reporting years include those expenses that cannot be repaid in future periods. From this it follows that 97 account accounting is included in the category of financial and distribution items. Its specificity lies in the fact that the amount of actually incurred costs - usually paid cash - is higher than the costs that relate to the current period. This can be represented as follows:
A - B = C, where:
- the amount of expenses that are accrued or paid is A;
- costs that relate to that reporting year when expenses A occurred - this is B;
- the costs of future periods are B.
Explanation
In many educational publications, as well as in practice, cases are often cited as examples concerning the issuance of magazines and newspapers, pre-paid rents, advance payments for telephone services made over several months, interest payments on loans in advance, and other similar situations. All these expenses are not related to expenses of the coming periods. This is due to the fact that in case of failure to fulfill the obligations assumed, for example, by the editorial office that issues magazines and newspapers, it will have to return the amounts paid. If the lessor violates the contractual terms, he is also obliged to reimburse part of the unused funds. Thus, if expenses were incurred, and money or other assets were paid to the counterparty or correspondent, we are not talking about deferred expenses, but about ordinary receivables. 
Explanation of the Plan
The above approach formed the basis of the new Instructions.In particular, from the explanations accompanying the account 97, the previously present provision that this article may reflect the costs related to the rental payment for the coming time is excluded. Many experts believe that the list of expenses provided in the new Plan is quite rational. In addition, in PBU 10/99 (clause 3) there is an indication that advance payments, deposits, advance payments, etc. cannot be recognized as expenses of the coming periods. In practice, however, quite often disputes arise between accountants and tax agents, which often end in court.
Article Introduction Concept
The use of account 97 began relatively recently. Although the idea of introducing the expenses of the coming years goes back to the Florentine practice, which was established in the 14th century. This concept was widely recognized by the theory of dynamic balance, which was developed in his works by Schmalenbach (German author) and Nikolaev (domestic accountant, student of Struve). The latter interpreted the entire asset, excluding cash, as deferred expenses. For an ordinary person, for example, buying a car is, of course, an expense. However, for the accountant, the expenditure is not direct purchase, but depreciation. 
Static reporting
In theory, liabilities and property are the objects of accounting. This concept is the basis for international financial reporting standards. In fact, there is no place for the category of expenses for the coming periods. This is due to the fact that account 97 in the balance sheet does not imply any obligations or property. In the asset, this is considered a "black hole". In fact, it contributes to a clearer definition of the financial results of the enterprise. This "hole" acts as evidence of the superiority of scientific theory over common sense. In accounting for actual liabilities and property that has arisen, this item is present not in the expenses of the coming periods, but in the management of financial indicators. But if an assessment of the state of the enterprise, analysis of cash flows of the company is carried out, then the costs of future years should be excluded from the statements.
Debit
On the basis of the information given above, the question arises as to what should be attributed to a specialist in DB sc. 97. Everything that is usually included is subject to property tax. As indicated above, certain expenses should be indicated as net receivables. Using this approach, the specialist deduces the corresponding objects from the taxation. In account 97, it is necessary to attribute only those costs that the company incurred, and there is no one to return them. First of all, these are the costs of exploration, mining and exploratory work related to the seasonality of the supply of goods, the provision of holidays, production, repair of the OS, reclamation, acquisition of licenses, recruitment, assignment of specialists, economic activity in the absence of implementation, and so on. The specificity of all these expenses is that the enterprise has already incurred them and, as a rule, after that they cannot be reimbursed by anyone. 
Account 97: Postings
Thus, specialist records will be aimed at one goal - to capitalize the costs incurred by the company. This means that the debit to account 97 collects all expenses related to scientific, mining, land-beneficiation and other works. In this case, articles of material and monetary values will be credited. The asset as a result will be collected expenses that are temporarily recognized as capital.
Write-off
“Temporary capital” will be included in expenses for the reporting periods to which they should be allocated. This can be done either with reference to the time intervals themselves, if indirect costs which fall on a specific time, or they act as direct costs related to a specific volume of production. In the write-off process, account 97 is credited.At the same time, expense items that relate to the current reporting time are debited. In the previous Instruction to the plan of accounts, it was indicated that the time limits for which it is necessary to write off expenses of the coming periods to production costs and other sources are regulated by law and other regulations. The new recommendations do not contain such a provision. According to the Regulation on accounting and reporting, the company is entitled to determine the write-off period for expenses of the coming periods independently. 
Assignment of specialists
In some cases, under the prevailing market conditions, such operations become very popular. One enterprise, breaking the labor contract with a specialist, allows him to get a job in another company. The latter, in turn, compensates for this loss. Operations of this type are widespread in the field of sports. However, at present, such transactions are increasingly being concluded within other areas of economic life. That company, which is inferior to the specialist, makes the following record: DB 51 Cd 91.1.
Buyer wiring is as follows: DB 97 Cd 51.
Then, during the term of the contract, the following entry will be made monthly: DB 91.2 Cd 97.
But in this case, the company will have to pay property tax.
The economic activity of the company in the absence of implementation
Often at the beginning of its activities, the company suffers losses. At the same time, the work of the company is unfolding and is in full swing, but during the reporting period, the enterprise did not have time to do anything or managed, but could not realize. In such a situation, everything that was recorded throughout the year on articles on the main and auxiliary production general and general production costs, maintenance costs, must be credited. All costs that are collected should be charged to account 97 (debit). In the course of the sale of manufactured products, costs in dB cu will already be deducted from this article. 90.2. 
Score 97: Close
The above option can be considered theoretically true. But in practice, the question arises as to whether there will subsequently be production and sale. Currently, there are a huge number of companies that carry out expenses every day, and income is expected "someday". In this situation, a difficult situation arises. Where to write off the debit turnover, which fixes the account 97?
Here the choice is small, and the costs that are unlikely to pay off in the future will have to be written off in DB mid. 99. But in this situation it is logical to assume that these costs can be immediately transferred to article 99. The accountant will thus resolve the controversial situation solely on the basis of his professional judgment. He will decide to immediately write off to DB mid. 99 and the reflection of expenses for that period or to show costs in DB SCH. 97 and then transfer them as shown above, if sales and production still exist. The specialist can write them off to the losses of those upcoming periods to which, due to the lack of activity, they have no relationship. The selected option should be reflected in the accounting policies of the enterprise.
Taxes
The issues of taxation of costs, which are considered expenses of the coming periods, are quite complex and uncertain. According to paragraph 1 of Art. 272 of the Tax Code, expenses are accepted in the period to which they, in fact, relate. Moreover, the time of the actual payment of funds or other payment does not matter. The date of recognition of the costs of accepted services, work of a production nature is the day the payer signs the corresponding acceptance certificate.
However, you should take into account the requirement of the law on the need to compare costs and revenues that will lead or have led to this profit.Costs are recognized in the tax (reporting) period in which they arise in accordance with the terms of the transaction (under contracts with specific deadlines for the fulfillment of obligations) and the principle of proportional and uniform formation of expenditure and revenue items (under agreements that last more than one tax period), according to the provisions of the current Tax Code (in paragraph 1 of article 272).
It follows that many of the costs, which, according to the accounting rules, are carried forward to the expenses of the coming years, should be included in the tax base. This should be done during the reporting period when they actually took place. Nevertheless, experts say that in each specific situation, it is necessary to analyze and evaluate the possibility of comparability of the expenses incurred and the income received.
