In this article the taxation explanation is given at agricultural products markdown, reflection of a markdown of production on accounting accounts.
The agricultural enterprise made the decision on a markdown of production which was in a warehouse which lost the initial qualities.
How to reflect production markdown in the account? How such markdown will affect taxation of the VAT and the profits tax?
The agricultural products after initial recognition are reflected in the account according to P (C) BU 9 "Stocks" (item 12 P (C) BU 30 Biological assets).
According to item 24 P (C) BU 9 for balance date production, including agricultural, should be reflected in the account on smallest of two estimates:
• or at initial cost on which it was credited at initial recognition;
• or on net value of realization (ChSR).
That is the expected price of realization of production minus expected expenses on completion of production and sale (item 4 P (C) BU 9). That is, in fact, fair value and ChSR – this same.
Therefore, if agricultural products cost with the vreyomeny decreased (owing to damage, changes of market prices, etc.), for date of balance follows proizvesti a markdown of such production, having issued this operation by the relevant act.
In the account the markdown is reflected by reduction of pervonachalyyony cost of agricultural products with sum reference ucenki on other operating expenses of the reporting period.
For example, initial cost of production sostavlyaet 100 UAH., the overestimated cost – 60 UAH. A markdown for the sum of 40 UAH. (100 – 60) it is reflected in the account by conducting of Dt 949 – Kt 27.
As to the taxation, the markdown of production doesn’t involve any tax consequences.
Let’s explain why.
According to item 5.9 of the Law on profit in the bukhgalyotersky account the markdown of stocks with a view of a nalogoobloyozheniye doesn’t change balance cost of stocks for calculation of their decrease (gain). Don’t change in this case both gross expenses, and a gross revenue of the enterprise.
Speaking about the VAT, it is necessary to notice that the markdown of a selkhozproyoduktsiya isn’t object for charge of the tax obligations (subitem 3.1.1 of the Law on the VAT). To correct the tax credit which was reflected at a priobreyoteniye of the goods (services) used in production of marked-down production, also it is not necessary. After all in this case production isn’t written off from balance, and only reduced the price – further it will be used in economic activity in taxable opeyoratsiya (subitem 7.4.1 of the Law on the VAT).
(On Balans-Agro newspaper materials).