Fund of restoration of the rented fixed assets

In this publication the explanation about creation of the rented fixed assets – the former members of KSP the property received or as a result of a raspayevaniye is given, and also are stated a reflection order in accounting and tax accounting.

Quite often agricultural enterprises rent at citizens – the former members of KSP the property received by them as a result of a raspayevaniye. For protection of property interests of individuals – lessors Recommendations No. 97 provided creation of fund of restoration of the rented fixed assets (further – FVAOS). In this consultation we will consider an order of its formation and use direction.

Creation and use FVAOS

FVAOS is a part of a rent which isn’t paid at once to lessors, and nakapliva­etsya on accounts of accounting of the tenant and is­polzuetsya then on financing of certain actions.

According to the Approximate provision on fund of a vosstanovyoleniye of the rented fixed assets (further – Priyomernoye situation), approved by the Order No. 210, FVAOS is formed at a rate of the sums of amortization of the rented property. Let’s note that Approximate situation isn’t obligatory for an ispolzoyovaniye, therefore (the tenant and the lessor) can provide the parties other procedure of payments of sums FVAOS, for example send to fund a certain percent from the rent sum.

It is necessary to mean what to create FVAOS neobyayozatelno. It will be organized only if it is provided by the property lease contract (an imuyoshchestvenny share), concluded between selkhozpredyopriyatiy and citizens – owners of property.

If the parties reached a consent about creation of such fund, Situation about FVAOS should be a priyolozheniye to the lease contract. By its drawing up it is possible to be guided by Approximate situation.

FVAOS – the property of lessors also can be used only from their consent or in an order provided by Situation about FVAOS.

Fund can be used with a view of:

• reconstruction and improvements of rented OS;

•  acquisitions of new OS.

If throughout period of validity of the lease contract the enterprise doesn’t spend all means FVAOS, it should pay to co-owners the remains of means in a deyonezhny or natural form or services.

Tax accounting

Profits tax. As FVAOS – a part of a rent which is a part gross ras­xodov of the enterprise, fund is subject to inclusion in VR as a part of a rent. The gross revenue at creation FVAOS doesn’t arise.

VAT. Creation of fund doesn’t bear any consequences on the VAT as such operation isn’t objekyoty taxation by this tax. Features on payment of the VAT will arise only when using means FVAOS (see further).

Accounting

Reflection of operations on creation and use of means FVAOS in accounting is regulated by Methodical recommendations No. 190. According to these recommendations the specified operations are reflected with account 48 application Target financing and target receipts. On the debit of the account creation FVAOS, on the credit – use of means is reflected.

For the accounting of means FVAOS we recommend to account 48 to open the subaccount, for example, 481 Fund a vosstanovleyoniya of the rented fixed assets.

Example 1

The agricultural enterprise concluded with co-owners of agricultural machinery the lease contract for 5 years. Equipment cost – 1 000 000 UAH. The Arendyony payment in 5 years is added at a rate of 50 000 UAH., of them FVAOS makes 10 000 UAH.

On equipment repair at the expense of fund ispolyyozovano 8 000 UAH. (reflection in accounting uche­te operations on repair of the rented equipment we will consider in the following section). After period of validity of the lease contract balance FVAOS at a rate of 2 000 UAH. it is returned to arendoyodatel in a monetary form.

(UAH.)

Repair of rented OS at the expense of fund

As we already told above, one of the directions of an isyopolzovaniye of means FVAOS – repair, a rekonstrukyotsiya and modernization of rented OS.

By approximate situation it is defined that improvements, reconstruction and modernization rented obek­tov (further – improvements), executed at the expense of fund,  are a property of lessors from the moment of signing of the relevant documents – the additional agreement to the contract and the act of vyyopolnenny works.

Thus, the ownership right passes to similar improvements of objects to lessors not at the moment of implementation of expenses on them, and at the moment of signing of documents on transfer of results of these improvements.

Tax accounting

Profits tax. Improving rented obek­ty at the expense of means FVAOS, agricultural enterprise oka­zyvaet services to lessors. Means, for date of a podyopisaniye of the act of the executed works the enterprise for the sum of improvements (cost of services) should uveli­chit a gross revenue (subitem 4.1.1 of the Law on profit). Respectively the expenses suffered on such uluchyosheniye, join in VR as they are connected with conducting economic activity of the enterprise (subitem 5.2.1 of the specified Law).

VAT. The same it is possible to tell and about the VAT. To Poskolyyoka delivery of services, to date of signing of the act of vyyopolnenny works is available it is necessary to add tax obyayozatelstvo on the VAT and to write out the tax consignment note (subitem 3.1.1 of the Law on the VAT).

Delivery of services is made to individuals – to defaulters of the VAT therefore the tax consignment note is written out in duplicate which remain with the enterprise. In lines Individual nalogoyovy number of the buyer and Number of the certificate on registration of the payer of a value added tax (buyer) becomes a mark of "X-th".

The VAT sums, paid (added) at a priobyoreteniye of the goods (services) for improvement of arendovanyony objects, can be included in tax kre­dit as these goods (services) are intended for use in taxable operations in pre­delax to economic activity of the enterprise (subitem 7.4.1 of the Law on the VAT).

We pay attention! The tax obligations and the tax credit on the specified operations are reflected:

•  in the special declaration on the VAT, which pred­stavlyaetsya according to item 11.29 of the Law on the VAT if improvements of objects are made neposredstvenyono by the enterprise lessor that is if it is services of own production;

•  in the general declaration, if improvements zanima­las the foreign organization. In this case services aren’t services of own production, that is it is a question of their resale.

Accounting

Reflection in the accounting of operations on improvement of arendoyovanny objects at the expense of FVAOS we will consider on an usyolovny numerical example.

Example 2

The lessor repaired the rented imuyoshchestvo at the expense of fund for the sum of 8 000 UAH. (including the VAT – 1 333,33 UAH.). Repair is made by strengths of the tenant.

(UAH.)

Acquisition of objects at the expense of fund

The enterprises lessors at the expense of means FVAOS can get new objects.

Again acquired objects are sobstvenno­styu lessors from the moment of dopsolasheniye signing to the contract, treat the rented imuyoshchestvo and should be considered at rent calculation. Thus, property acquisition at the expense of means FVAOS increases an enterprise rent.

The specified objects should be transferred to sovlayodelets after period of validity of the contract aren­dy together with other rented property.

Tax accounting

Profits tax. The acquired objects won’t be amortized in tax accounting, po­skolku are got not as OS, and as the goods which is subject to transfer to lessors.

The expenses suffered on acquisition of objects, join in structure of VR of the enterprise, and at the moment of a dopsoglasheniye podyopisaniye to the contract the enterprise tenant increases VD sum by cost of pereyodanny objects.

VAT. When signing dopsoglasheniye to the contract the enterprise should add the VAT for cost of the acquired objects and to write out tax nayokladny as goods delivery (subitem 3.1.1 of the Law on the VAT is available). The sums of the VAT paid at pokup­ke of these objects, join in structure of the tax credit (subitem 7.4.1 of the mentioned Law).

Thus both the tax credit, and tax obyazatelyyostvo should be reflected in the general declaration on the VAT (purchased objects, instead of production of own production are transferred).

Accounting

Costs of acquisition of objects at the expense of means FVAOS are reflected in subaccount 152 Acquisition (manufacturing) of fixed assets.

We pay attention! As the acquired objects don’t correspond to the definition of OS given in P (C) BU 7 "Fixed assets" (they not prinadle­zhat to the enterprise), into account 10 they aren’t credited. Cost of the acquired objects is written off on expenses from usual activity when signing dopsoglasheniye to the contract.

Example 3

The lessor at the expense of means FVAOS got a trakyotor in cost of 60 000 UAH., including the VAT – 10 000 UAH.

(UAH.)

(On Balans-Agro newspaper materials).