Counting income is always psychologically more pleasant than spending. Income – funds that are received or are about to be received individual or organization, thereby increasing its assets.
- What kind of income relates to future periods?
- How are they reflected in accounting?
- Are there any nuances in the inventory of such income?
Difficulties in determining deferred income (DBP)
To a layman it may seem that determining future income is not difficult. For example, creditor organizations owe certain funds, the repayment deadline is already approaching, logic dictates that the money will come to the account. Does such profit relate to DBP? Or another example: an order has been received for a large batch of goods, which means they paid good money for it, is this DBP?
In fact, both of these examples do not illustrate deferred income in an accounting sense.
In the first case, the income is only inferred; until the debt is paid, it cannot be entered into any accounting accounts. In the second example, ownership of the goods occurs at the moment of its transfer to the buyer (shipment), so that income will occur only after payment and transfer of ownership. There is no talk about future income. Such and similar situations do not fall under the purview of accounting, but within the sphere of planning.
Deferred income (deferred income)- this is the receipt of an asset or the reduction of a liability due to transactions of the current accounting period, but reflected in the statements of other periods that have not yet occurred.
What objects belong to the DBP
Profit received “in advance” can be attributed to several cases of receipt of income. The main feature by which this type of income can be classified as DBP is that it can, in full accordance with the law, be “stretched” over several accounting periods, that is, this asset will be used to generate profit not only now, but also in the future. .
PLEASE NOTE! All incoming funds that are recommended by the DBP are specified in regulatory (methodological) documents. An accountant should not expand their list on his own.
- clause 9 of PBU 13/2000 “Accounting for state aid” - on accounting for targeted financing as a DBP;
- clause 29 of the Methodological Guidelines for Accounting for Fixed Assets speaks of reflecting gratuitously received finances as a loan on the DBP account;
- clause 4 of the Instructions on the reflection of leasing operations in accounting - on the presentation of leasing differences as DBP;
- Chart of accounts for accounting financial and economic activities - about the presence of account 98, specifically designed to reflect DBP;
- Order of the Ministry of Finance of the Russian Federation No. 66n dated July 2, 2010 “On forms financial statements organizations" - on the reflection of DBP in the balance sheet in the section "Short-term liabilities".
- Rent. The lease agreement may provide for payment in advance for a certain time. A security deposit, which is paid at the beginning of the lease, but is offset for its last month, can also be recognized as deferred income.
- Advance payments- funds transferred under the contract for goods or services that have not yet been provided to the buyer (in advance) on account of subsequent payments. DBP will be recognized if the advance is made more than 1 accounting period in advance.
- Subscription (prepaid) for periodicals.
- Ticket sales for various events, performances, performances.
- Revenue from subscriptions and long-term commitments, for example, income from the transportation of passengers who bought a “pass” immediately for a quarter or a year, subscription fees for communication services, etc.
- Sponsorship "gifts". Gratuitous receipts provided for in the donation agreement, for a long time attributed to the period of receipt, where tax was reflected and paid on this profit. But if we consider this asset as a long-term asset that will “work” for the company for several years, then it can quite legitimately be considered as deferred profit. This also includes grants received.
- Funds from the budget received to cover costs.
- Funds allocated for specific purposes that are not fully used(fund balance on account 86 “Targeted financing”).
- When leasing - the difference between the amount of lease payments and the cost of the property leased (it must be on the balance sheet of the recipient of the property).
- Probable return of previous shortages. If a loss has been incurred, it can be irrecoverable (when the guilty party has not been identified) or it can be attributed to accounts receivable (when the amount is planned to be collected from the financially responsible person). In the second case, payment of such a shortfall may also be considered DBP.
- Leasing difference. If the company is a lessor, then the difference between the value of the property leased and the total amount of lease payments is also recognized as DBP. In this case, it does not matter that the property is already on the balance sheet of the lessee.
NOTE! If fixed assets are received as a gift in this way, then depreciation in future periods will not be charged for them (otherwise it would level out the “profit” from deferring profits for the future), but the transfer of part of the DBP to current expenses is recorded. Thus, the cost will not include depreciation, which in this case will act as a transfer of expenses incurred earlier.
Why allocate DBP
Principle of correspondence, which guides accounting, states that income must be consistent with the expenses with the help of which these incomes were obtained. Sometimes a business receives assets, that is, income that is not specifically related to the current accounting period, because the expense is spread over a longer time. Theoretically, the funds could have been received over a long period, but they all arrived at once. In such situations, accountants prefer to report profit in an amount not exceeding the income of the current period, and transfer funds received that are not related to it to DBP subaccounts.
Why do this, because you can immediately write down the entire asset received as profit? Yes, it is possible, but we should not forget that the amount of profit is directly proportional to the tax base. And if there is a legal opportunity to reduce it this year, why increase it by income that will only be used in the future?
EXAMPLE. The organization rents out real estate. She was paid rent for three years at once. The asset is there. If you record all of it in this year’s income, the amount of the income tax base will be increased. If we take into account as profit only the payment for current year, then the remaining funds must be taken into account as DBP, reflecting them in the balance sheet of profit in the next two years, thus proportionally distributing the tax base.
Where are deferred income reflected?
Special account 98, which is called “Deferred Income,” is designed to reflect all types of deferred profits. The instructions for the Chart of Accounts allow you to open a number of sub-accounts for this account, specified by DBP objects:
- “income that will be received in future accounting periods”;
- “gratuitous receipts” - gifts, sponsorship, etc.;
- “future receipts for past shortfalls identified in earlier periods”;
- “the difference between the cost of recovery according to the balance sheet and the amount payable by the guilty party”, etc.
In the balance sheet, a special line 1530 is intended to account for this type of profit.
ATTENTION! It can reflect only those incomes that are recognized by the DBP in the regulatory documents of this organization.
Active or passive?
Are deferred receipts an asset or a liability when reflected on the balance sheet? Line 1530 reflects the item “DBP” as a balance sheet liability, despite the fact that it takes into account income.
The reason is that this line has a direct connection with another line, also related to the liability “Retained earnings (uncovered loss)”. It records the profit that the organization “owes” to its owners. But in practice, there are often situations when the debt to the owners has not yet arisen, but the money has already arrived on the balance sheet. For example, money was received as funding from the budget. They should be classified as “cash” assets. How to balance a liability? These are not retained earnings, because the organization has not yet done anything of what they were intended for, which means they have not yet become a profit. Profit from them is only in the future, so it is appropriate to include them in the liability line “Future income”. As this money is spent, that is, expenses are recognized, the amounts from the DBP liability will be transferred in parts to the Retained Earnings liability.
We carry out accounting
To reflect the DBP, the credit of account 98 “Deferred Income” and correspondent accounts are intended for accounting for finances and settlements with counterparties.
To write off amounts of income from future periods when this very “future” occurs, the debit of this account (98) is used, as well as the correspondence of the account in which the income was recorded (90 or 91, this determines the type of receipt).
Subaccounts that define a specific DBP object also provide for the corresponding correspondence:
- “Gratuitous receipts” - 08 “Investments in non-current assets”, 86 “Targeted financing” (loan 91 “Other income and expenses”);
- “Forthcoming receipts of debt for shortfalls for past periods” - 94 “Shortfalls from loss and damage to valuables”, 73 “Settlements with personnel for other operations”, subaccount “Reimbursement of material damage” (credit 91 “Other expenses”);
- “The difference in the amount of recovery from the perpetrator and the book value” - 73 “Settlements with personnel for other operations” (credit 91 “Other expenses”).
DBP inventory
For the adequacy of accounting for deferred profits, it is necessary to regularly inventory (check) this part of the balance sheet. The inventory includes:
- the correctness of attributing this type of profit specifically to future income;
- reconciliation of the correspondence of the amounts according to the “primary” (that is, whether they are reflected correctly in the documentation);
- clarification of how correct the reflection of funds is in relation to the accounting policies of this organization.
The activities of any enterprise are carried out with the aim of making profit. However, income may be current or relate to the future - to periods that have not yet occurred. The order of reflection of the latter has its own specifics. Let us further consider in detail how the organization’s income is recorded for the coming years.
In which account are revenues for the coming years reflected?
Accounting for future income is carried out on account 98. Such funds include accrued (received) payments in the reporting year, but relating to the future (years that have not yet come). This account also reflects the expected receipts of debt for shortfalls that were identified in the current period, but occurred in the past. On the account 98 summarizes information about the difference formed between the amount of recovery from the perpetrators and the cost of material assets that were taken into account in the event of damage (shortcomings) being detected.
Types of income
Deferred income may include:
- Rental payment received.
- Revenue from passenger transportation based on quarterly tickets.
- Payment of utilities and so on.
It is necessary to distinguish deferred income from advances. The latter are received by the enterprise for work or goods, the time of provision (delivery) of which is clearly defined. When the due date arrives, the advance payment is offset. Future income received is repaid virtually continuously. Receipts are recognized as such in the part of the period to which they relate.
Subaccounts
Their purpose depends on the category of funds received by the enterprise. So, to the account. 98 sub-accounts can be opened:
Let's look at the features of postings for each subaccount.
Profit received for future years
According to subaccount. 98.1 records the movement of revenues that were received in the reporting year, but relate to upcoming periods. They include, in particular, rent or apartment payments, utility bills, revenue for passenger and freight transportation on quarterly/monthly tickets, subscription fees for the use of communications equipment, and so on. According to Kd sch. 98 “Deferred income” reflects amounts relating to upcoming years in correspondence with accounts recording cash or settlements with creditors and debtors. According to DB, payments are made, transferred upon the onset of the reporting year to which they relate, to the appropriate accounts. Analytical accounting is carried out for each type of income.
Free funds
Subaccount 98.2 records the value of assets that were received by the enterprise without payment. According to Kd sch. 98 reflects the market price of these funds in correspondence with the accounts “Investments in non-current funds” and others, and the budget amount allocated by the enterprise to finance costs is with the account. 86. Write-off is carried out in the CD of account 91, which records other receipts and expenses:
Analytical reporting is carried out for each receipt.
Deferred income from shortages
The correspondence with the account for losses due to damage to valuables (account 94) reflects the amount identified for previous reporting years (before the current one) or imposed for recovery from the guilty persons by court order. At the same time, the account is credited for these amounts. 94 in correspondence with account. 73, recording settlements with personnel for other operations (sub-account for compensation for material damage). As the debt is repaid, the amounts pass through the CD account. 73. The movement of payments is carried out in correspondence with cash accounts. At the same time, the amounts received are reflected according to the CD account. 91 and db sch. 98.
Accounting for the difference
It is carried out under subaccount 98.4. Here the difference is recorded between the amounts that must be recovered from those responsible for missing or damaged material and other assets and their value recorded in the accounting of the enterprise. According to Kd sch. 98 in correspondence with account. 73 reflect the indicated indicator. In the process of repaying the debt that was accepted on the account for settlements with personnel for other transactions, the corresponding amounts of the difference are written off from the account. 98 in CD count. 91, recording other income and expenses.
Conclusion
The above material describes the procedure for accounting for deferred income in four subaccounts. Depending on the specifics of the enterprise’s activities and the nature of the funds received, there may be more or less. In any case, the movement of payments and the summarization of the information received on income for the coming periods is carried out according to the account. 98. Correspondence of accounts in postings should not cause any particular difficulties. When taking into account the difference between the amounts for compensation for damage caused and the cost of material assets, it is necessary to carry out a reconciliation against the primary documentation. It reflects the cost at which damaged or missing objects were accepted into the enterprise.
This line reflects income from future periods, i.e. income (including other income) received in the reporting period, but relating to the following reporting periods.
What may be reflected in reportingas part of deferred income?
The financial statements on line 1530 “Deferred income” may reflect:
— budget funds allocated by a commercial organization to finance expenses (clause 9 of PBU 13/2000);
— unused balances of targeted budget financing provided to the organization at the end of the reporting period, accounted for in account 86 “Targeted financing” (clause 20 of PBU 13/2000, Instructions for using the Chart of Accounts) (In a similar manner, in our opinion, are reflected in reporting and targeted funding received in the form of grants, technical assistance (assistance), etc.);
- the market value of fixed assets received free of charge, determined as of the date of their acceptance for accounting, in the part not included in other income as of the reporting date (clause 29 of the Guidelines for accounting of fixed assets, Letter of the Ministry of Finance of Russia dated September 17, 2012 N 07- 02-06/223) (Guided by clause 7 of PBU 1/2008, organizations can take into account the gratuitous receipt of other assets in a similar manner, securing it in their accounting policies. In this case, line 1530 will reflect the market value of the gratuitously received property, not recognized other income at the reporting date.);
- the difference between the total amount of leasing payments under the leasing agreement and the cost of the leased property (clause 4 of the Instructions on reflecting transactions under the leasing agreement in accounting).
If the amount of unused funds from targeted budget financing is significant for the organization, then the organization shows it separately on a separate line in section. V “Short-term liabilities” of the Balance Sheet (clause 20 PBU 13/2000, clause 11 PBU 4/99).
What accounting data is used?when filling out line 1530 “Deferred income”?
When filling out this line of the Balance Sheet, organizations that are recipients of government subsidies, as well as leasing organizations, use data on the credit balance on account 98 and on the credit balance on account 86 (in terms of targeted budget financing and targeted financing received in the form of grants, technical assistance (assistance), etc.) as of the reporting date.
Attention!
The balances of target financing received in foreign currency are not subject to recalculation for reflection in the financial statements. They are shown in the reporting at the exchange rate in effect on the date of their acceptance for accounting (clauses 7, 9 of PBU 3/2006).
Line 1530 “Deferred income” = Credit balance on account 98 + Credit balance on account 86 in terms of targeted budget financing, grants, technical assistance, etc.
In general, the indicators on line 1530 “Deferred income” as of December 31 of the previous year and as of December 31 of the year preceding the previous year are transferred from the Balance Sheet for the previous year.
The “Explanations” column provides an indication of the disclosure of this indicator. If the organization is a recipient of state aid in the form of subsidies and draws up Explanations to the Balance Sheet and the Report on financial results according to the forms contained in the Example of Explaining Explanations given in Appendix No. 3 to Order of the Ministry of Finance of Russia No. 66n, then in the “Explanations” column on line 1530 “Deferred income” she indicates table 9 “State aid”, which discloses the indicators of line 1530 Balance sheet.
Example of filling line 1530"Deferred income"
Indicators for accounts 98 and 86 regarding targeted budget financing (grants, technical assistance and other targeted financing are absent): rub.
Fragment of the Balance Sheet for 2013
Solution
The amount of deferred income is:
A fragment of the Balance Sheet will look like this.
| Explanations | Indicator name | Code | As of December 31, 2014 | As of December 31, 2013 | As of December 31, 2012 |
| 1 | 2 | 3 | 4 | 5 | 6 |
| 9 | Deferred income | 1530 | 2862 | 2786 |
Score 98 « Deferred income » performs an important corrective function, since it often happens that an enterprise simultaneously receives income for several reporting periods at once, for example, annual (quarterly) payments for leased property, payments for sold subscriptions or planned transportation, etc. That is, the company accepts payment for services, the profit from the provision of which should be taken into account in the future. Using the 98th account will allow you to distribute revenue corresponding to each reporting period, thereby streamlining tax payments.
How is deferred income accounted for? , and by what criteria such income should be determined, this publication will tell you.
Deferred income: what applies to them
Deferred income reflects receipts for services, the implementation of which will last a long time, but payment for them has already been received. These may be payments:
- for the rental of buildings, machines, vehicles, etc.;
- for rental housing and utilities;
- for the transportation of goods;
- for passenger transportation, when purchased tickets are sold for use in future periods;
- for various subscriptions.
In addition, targeted receipts are recorded on account 98 - grants, tranches (if there are state support programs).
Deferred income: account structure 98
The main function of the account is to combine analytical information about the income of future periods. Depending on the source of origin of payments, the following sub-accounts are opened to the account, provided for in the Chart of Accounts:
- 98/1 “Income received for future periods”;
- 98/2 “Gratuitous receipts”;
- 98/3 “Proceeds from compensation for shortfalls established for previous periods”;
- 98/4 “Differences between the amounts to be recovered from the perpetrators and the value of the missing property on the balance sheet”, etc.
By credit, incoming amounts attributable to DBP are recorded; by debit, amounts transferred when income is recognized.
There is no separate PBU “Deferred Income”; the use of the account is regulated by the Chart of Accounts, PBU 9/99 “Revenue”, PBU 13/2000 “Accounting for State Aid”. Today, future earnings may include:
- targeted budget financing;
- the cost of freely supplied OS, MPZ;
- the difference between the amount of lease payments under the contract and the value of the leased property.
Where are deferred income shown on the balance sheet?
Account 98 is passive, and in the balance sheet it is assigned line 1530, where future income is reflected . The credit balance of account 98 recorded on it indicates that the company has a balance of receipts that will be recognized as revenue in the period directly related to the payment.
Note that an increase in future income indicates an increase in the company’s work aimed at attracting counterparties, the intensity of service provision, the gratuitous receipt of assets or targeted government assistance.
Postings for recording deferred income
Here are the main records that the accountant operates, taking into account future income:
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Operation |
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Funds arrived like DBP |
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Write-off of part of the funds relating to the current period |
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Receipt of funding from the budget |
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Write-off of target funds in the corresponding period |
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The initial cost of fixed assets, inventories or goods received free of charge is reflected |
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Income on gratuitously received fixed assets is recognized (on a monthly depreciation basis) |
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Recognized revenue from goods received free of charge, inventories |
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The amount of shortfalls for previous periods has been established |
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Funds have been received to cover the damage caused by the shortage |
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Recognition of income from payment to repay the deficiency |
Thus, the amounts from the loan account. 98 are written off in installments as revenue is accepted for deferred income.
Example:
On July 10, 2017, a donation agreement formalized the receipt of 100 kg of honey in the amount of 10,000 rubles. (with expert assessment market value) to the confectionery production of Alpha LLC. Raw materials are written off gradually:
- in July 50 kg;
- in August 30 kg;
- in September 20 kg.
The receipt of honey is registered with a receipt order and is recorded in the accounting records as follows:
- D/t 10 – K/t 98/2 in the amount of 10,000 rubles.
The release of raw materials into production is carried out in stages:
- in July 50 kg:
- D/t 20 – K/t 10 in the amount of 5000 rubles. (50 kg * 100 rub./kg.)
- D/t 98/2 – K/t 91/1 for 5000 rub. – other income (according to PBU 9/99) of the reporting month is recognized;
- in August 30 kg:
- D/t 20 – K/t 10 for 3000 rub. (30 * 100)
- D/t 98/2 – K/t 91/1 for 3000 rubles. – income for August is recognized;
- in September 20 kg:
- D/t 20 – K/t 10 for 2000 rub. (20 * 100)
- D/t 98/2 – K/t 91/1 for 2000 rub. – income for September is recognized.
Inventory of deferred income
Carrying out the procedure for comparing the balances on account 98 is mandatory. As a rule, they are inventoried at the end of the financial year, carefully checking the amounts of receipts with the data of analytical articles and primary documents, as well as controlling revenue recognition, i.e. debiting from account 98, in those periods when future income becomes relevant.
The main task of inventory is to verify the reliability of account information and related analytics, as well as the compliance of the reflection of these transactions with the accounting policies adopted by the company.
Deferred income– these are incomes received (accrued) in the reporting period, but relating to future reporting periods.
Accounting for future periods
To account for future income, account 98 “Deferred income” is used.
According to the Instructions for the application of the Chart of Accounts (approved by Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n), the following sub-accounts should be opened for account 98 “Deferred Income” (the list is left open):
98-1 “Income received for future periods.” The accrual of deferred income in the event of receipt of budget funds to finance expenses is reflected in the credit of account 86 “Targeted financing” of subaccount 98-1 “Income received for deferred periods” correspondence with the account:
Income of future periods is reflected;
98-2 “Gratuitous receipts.” The instructions for using the Chart of Accounts establish that the value of assets received by an organization free of charge is taken into account as a credit to subaccount 98-2:
In correspondence with the invoice - in case of receipt of fixed assets;
In correspondence with accounts 10 “Materials” 41 “Goods” - in the case of gratuitous receipt of materials;
98-3 “Upcoming debt receipts for shortfalls identified in previous years”;
98-4 “The difference between the amount to be recovered from the guilty parties and the book value for shortages of valuables.”
Subsequently, the amounts initially recognized as a credit to the account are subsequently written off as income, in most cases - gradually, in parts (as income is identified):
Other income is recognized (revenue is recognized) for:
For fixed assets received free of charge - as depreciation is calculated;
Others received free of charge material assets- as sales expenses are written off to accounts (accounting for production costs).
Deferred income and regulatory documents
Note that since 2011, the use of account 98 “Deferred income” is limited to situations that are directly provided for by regulatory documents on accounting.
Currently, the regulatory documents regulating the following are considered as deferred income:
budget funds allocated to a commercial organization to finance expenses;
unused balances of targeted budget financing provided to the organization at the end of the reporting period, accounted for in account 86 “Targeted financing”, in accordance with clause 20 of PBU 13/2000;
the initial cost of non-current assets received free of charge;
the difference between the total amount of lease payments according to the lease agreement and the cost of the leased property.
Here is a list of regulatory documents that provide for the use of account 98 “Deferred income”:
Regulatory (methodological) documents containing recommendations for reflecting individual receipts as deferred income
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Regulatory (methodological) document |
Document text |
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Clause 9 of the Accounting Regulations “Accounting for State Aid” PBU 13/2000 |
Targeted financing is taken into account as deferred income |
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Clause 29 of the Guidelines for accounting of fixed assets |
The cost of fixed assets received free of charge is reflected in the credit of the deferred income account. |
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Clause 4 of the Instructions on reflecting transactions under a leasing agreement in accounting |
The difference between the total amount of lease payments under the leasing agreement and the cost of the leased property is reflected in deferred income |
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Chart of accounts accounting financial and economic activities of organizations |
Commercial organizations that receive funds from the budget or extra-budgetary funds to finance any activities, projects, etc., reflect the use of targeted funding amounts in the account. This line also shows the unused balances of targeted budget financing provided to the organization at the end of the reporting period, which are taken into account in accounting on account 86 “Targeted financing”. This procedure is established by PBU 13/2000 “Accounting for State Aid”, which was approved by Order of the Ministry of Finance of Russia dated October 16, 2000 N 92n. In addition, the initial cost of fixed assets received by the organization free of charge is reflected in the debit of the account in correspondence with the credit of account 98 “Deferred income”. Deferred income: details for an accountant
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