Methodology of accounting

1.

Accounting

2.

Accounting in statements
A. Lincoln
Damn lucky for someone
who has never studied
accounting. Then he
would have immediately
realized that he was
ruined. And so, it seems
that everything is going
fine
2

3.

Accounting in statements
Stanislav
Jerzy Lez
A good accountant is
expensive, and a bad
one is much more
expensive
3

4.

Definition
Accounting is the formation of documented
systematized information about objects
provided for by law, in accordance with the
requirements established by law, and the
preparation of accounting (financial)
statements based on it

5.

Types of accounting
1.
Financial accounting - focused on external
users of information (this is traditional
accounting);
2.
Tax accounting – accounting that is
conducted in accordance with the rules
established by the tax authorities;
3.
Management accounting - focused on
internal users of information

6.

Maintaining accounting records
All organizations are required to maintain
accounting records.
Some organizations (small businesses) may use
simplified methods of accounting.
For tax purposes, organizations keep tax records
in accordance with the selected tax rules

7.

Regulation of accounting
Accounting is regulated by special documents standards.
The accounting standard is a document that
establishes the minimum necessary requirements
for accounting, as well as acceptable methods of
accounting for any object

8.

Regulation of accounting
1)
federal accounting standards;
2)
branches of industry accounting standards;
3)
regulatory acts of the Central Bank;
4)
recommendations in the field of accounting;
5)
standards of the organization.

9.

Regulation of accounting
In addition to national accounting standards, there
are also international financial reporting standards
– IAS (IFRS)

10.

The presence of different accounting models is
explained by the following reasons
Economic, social and cultural differences
Various purposes of financial reporting
Various accounting principles
Different accounting models
10

11.

British-American model
1.
Accounting statements are the main source of
information for investors, shareholders and only
then other creditors (banks). Weak influence of
the state on the reporting procedure.
2.
Great attention is paid to the audit of financial
statements
3.
One of the basic principles is True and fair value.

12.

Continental model
1.
Accounting statements are focused on the
largest creditors (commercial banks).
2.
The system is focused on compliance with the
requirements of fiscal authorities.
3.
State bodies have a strong influence on the
reporting procedure.
4.
Extensive use of the principle of prudence in
accounting.

13.

Other models
Some authors, in addition to these two
models, distinguish other accounting models:
the South-American model;
the Islamic model;
the Japanese model;
the African model;
the Russian model.

14.

Lack of unity within the country.
For example, in Germany,
IAS is used by:
-
Adidas, Bayer, Deutsche Bank, Dresdner
Bank, Henkel, Lufthansa, MAN, Wella,
Merck.
US GAAP is used by:
-
Daimler, Schwarzkopf, Puma
They give preference to national standards:
- BASF, Deutsche Telekom.

15.

How significant are the differences in the presentation of the
company's results of operations?
The table shows the results of the recalculation of
equity capital when some companies switch to
accounting standards adopted in other countries.
Company
British
Airways
(million ₤)
Year
Internal
accounting
rules.(UK)
US GAAP
Percentage
of
differences
1997
₤2984
₤2400
-19,6%
1998
₤3321
₤3044
-8,3%
1999
₤3355
₤3198
-4,7%
2000
₤3147
₤2389
-24,1%
2001
₤3215
₤2334
-27,4%

16.

How significant are the differences in the presentation of the
company's results of operations?
Company
Year
Internal
accounting
rules.(UK)
US GAAP
Percentage
of
differences
DaimlerBenz
(million DM)
1993
18145
26281
+44,8%
1994
20251
29435
+45,4%
1995
13842
22860
+65,1%

17.

How significant are the differences in the presentation of the
company's results of operations?
Company
Year
Internal
accounting
rules.(UK)
US GAAP
Percentage
of
differences
Ericsson
(million Skr)
1998
63112
70318
+11,4%
1999
69126
85616
+23,9%
2000
91686
109217
+19,1%

18.

The purpose of IFRS is to ensure the process of
harmonization of accounting
National standards
Mandatory
standards
Standards
adopted by the
bodies that give
the standards
the status of law
Tax rules.
International standards
EU Directives
Generally accepted
accounting principles –
theory basis
Optional
standards.
Regulations issued by the
National professional unions of
Accountants
International standards
adopted by bodies such
as the IASB

19.

Application of the IFRS in the world
There are several variants for applying IFRS:
1. Applying IFRS as national standards –
currently this is still not the most popular
option;

20.

Application of the IFRS in the world
2. National organizations of the development of
financial reporting standards use IFRS as the
main reference for the development of their
own standards - most highly developed countries
and an ever-growing number of developing
countries and countries with economies in
transition use it;

21.

Application of the IFRS in the world
3. Stock exchanges and bodies regulating the
securities market oblige listed companies
(whose securities are traded on the stock
exchanges) to provide consolidated financial
statements prepared in accordance with
IFRS.

22.

Application of the IFRS in the world
4. Using of the IFRS in the preparation of
financial statements as a result of resolutions
of supranational organizations, for example,
the EU, which declared mandatory reporting in
accordance with the requirements of IFRS since
2005 for companies whose shares are listed on
international stock markets;

23.

Application of the IFRS in the world
5. Using of the IFRS by the companies
themselves on their own when preparing
financial statements.
At the same time, an increasing number of
companies are voluntarily switching to
international standards, since this brings
certain benefits for them.

24.

Benefits of using the IFRS for business
Improving the quality of information for decisionmaking by managers;
Facilitating access to capital, including from foreign
sources;
Decrease in the cost of capital;
Easy application of uniform reporting standards in
subsidiaries registered in different countries;
Simplification of mergers and acquisitions;
•Increasing
competitiveness;

25.

Benefits of using the IFRS for potential
investors
Improving the quality of information for making
investment decisions;
Building confidence to the provided information;
Better understanding of risks and returns;
The ability to compare the results of the
company's activities with foreign companies;

26.

Benefits of using the IFRS for the state
Strengthening the capital market and increasing
its attractiveness;
Facilitating access to world capital markets and
through this economic growth in the country;
Assistance in attracting foreign investment as a
source of economic growth;

27.

International Accounting Standards Board
The main goal of the IASB is to provide a process for
the development and implementation of
international financial reporting standards.
The IFRS Committee was founded in 1973 as a result
of an agreement of professional bodies from 10
countries: Australia, Canada, France, Germany,
Japan, Mexico, the Netherlands, Great Britain,
Ireland and the United States.
The official website of the organization:
www.iasb.org
27

28.

The IFRS development process
1.
Creation of a Preparatory Committee from a
wide range of specialists in various fields to
discuss issues on the agenda of the IASB Board.
Consulting with the Standards Advisory Board.

29.

The IFRS development process
2. Development and publication of the original
document - the primary draft of the standard - for
public discussion (term for discussion approximately
- 90 days). At this time, anyone can express their
opinion on the standard.

30.

The IFRS development process
3. Preparation of a working draft of the
provisions of the standard, taking into
account the comments received from all
interested parties at the second stage.
The Board then prepares a Draft
International Financial Reporting Standard
and proposes alternative solutions and
arguments in favor of their acceptance or
rejection

31.

The IFRS development process
4. Issue of the final international financial
reporting standard - IFRS (formerly IAS), which
is formed as a result of discussion of the Draft
IFRS and voting on the draft.

32.

The IFRS development process
5. Introduction of the standard – in most
cases, new standards begin to be applied
without fail, as a rule, not earlier than 1.5
year after their adoption, but early
application of the standard is welcome.

33.

Types of standards
IAS - International accounting standards were issued until 2003. IAS 1-41 were issued,
some of which replaced previously adopted
standards
IFRS - International financial reporting
standards. IFRS 1-17 have been issued.
33

34.

Types of standards
In addition, there are interpretations to the
standards (sequences) - SIC - Standards
Interpretations Committee, which are
currently called - IFRIC.
34

35.

Bookkeeping
Accounting and storage of accounting documents
are organized by the head of an organization.
The head of an organization is obliged to entrust
accounting to the chief accountant or other
official, or to conclude an agreement on the
provision of accounting services.

36.

Requirements for the chief accountant in Russia
For chief accountants of some organizations
(PJSCs, investment funds, budgetary
organizations), special requirements are
established:
- higher education;
- work experience over 3 years;
- no outstanding convictions for economic crimes.

37.

Bookkeeping
The totality of accounting methods forms the
accounting policy of the organization. An
organization independently forms an
accounting policy, guided by the accounting
legislation, federal and industry standards (IAS
8).
When forming an accounting policy in relation
to a specific object, a method of accounting is
selected from among those permitted by using
standards.

38.

Accounting objects
1)
facts of economic life;
2)
assets;
3)
liabilities;
4)
sources of funding for its activities (capital);
5)
incomes;
6)
expenses

39.

Accounting objects
A fact of economic life is a transaction, event,
operation that has or is capable of influencing
the financial position of an organization, the
financial result of its activities and (or) its cash
flow.
Each fact of economic life is subject to
registration by a primary accounting document.
It is not allowed to accept for accounting
documents that formalize the facts of economic
life that did not take place.

40.

Source documents
Mandatory details of the document:
1) the title of the document;
2) date of preparation of the document;
3) the title of the organization that compiled the
document;
4) the content of the fact of economic life;
5) the value of the natural and (or) monetary measurement
of the fact of economic life, indicating the units of
measurement;
6) the employee's position who made the transaction;
7) signatures

41.

Requirements for documents
In addition to the required details, extra
information can be included in the documents.
Moreover, if the primary document is drawn up
on the basis of another, then an indication of this
source document is mandatory

42.

Source documents
The primary accounting document must be drawn
up when the fact of economic life is committed or
immediately after its completion.
The person responsible for the registration of the
fact ensures the timely transfer of documents to
the accounting department, as well as their data
reliability. The person entrusted with accounting is
not responsible for the compliance of the primary
accounting documents drawn up by other persons
with the facts of economic life.

43.

Source documents
Requirements of the chief accountant in writing
form that are connected with the procedure of
documenting the facts of economic life, submitting
documents, etc. mandatory for all employees of an
economic entity.

44.

Source documents
The primary accounting document is drawn
up on paper and (or) in the form of an
electronic document signed with an
electronic signature

45.

Source documents
The documents must be kept in the form in which
they were drawn up. Translation of a paper
document into electronic form for subsequent
storage is not allowed.
In case of loss of documents, as well as their
damage, it is necessary to take all possible
measures to restore them.

46.

Source documents in Russia
The documents are prepared in Russian. If the
primary document is in a foreign language, then it
must contain a line-by-line translation. An
exception is a situation when, in the place of
business outside the Russian Federation,
legislation obliges to draw up documents in the
language of this country

47.

Source documents
The date of drawing up the primary document is
the day of its signing by the persons who made the
transaction and those responsible for its execution,
or by the persons responsible for the registration of
the event.
The document must indicate the date of the
commission of the fact of economic life, if it differs
from the date of compilation

48.

Source documents
When drawing up primary documents, you can
draw up several related facts of economic life
with one document

49.

Source documents
It is possible to draw up lasting facts of
economic life (accrual of interest,
depreciation), as well as recurring facts of
economic life (delivery of products in batches
under one contract) by primary documents
drawn up at intervals determined by the
economic entity

50.

Source documents
It is allowed to use as primary documents that
one that was drawn up or received from another
entity.

51.

Source documents
The list of persons entitled to sign documents is
established by the head of the organization. The
correctness of the reflection of objects in the
registers is ensured by the persons who compiled
and signed them.

52.

Bookkeeping
The data contained in primary accounting
documents are subject to timely registration and
accumulation in accounting registers

53.

Financial statements
The financial statements should provide a
reliable representation of the financial position
of an economic entity as of the reporting date,
the financial result of its activities and cash
flows for the reporting period, which is
necessary for users of these statements to
make economic decisions.

54.

Financial statements
W. Churchill
The unprecedented thickness
of this report protected it
from the danger of being
read.
54

55.

Financial statements
J. Bulatovich
(Polish
publicist)
There are three types of
lying: bragging, lying, and
reporting.
55

56.

Отчетность в высказываниях
V. Borisov
(Russian
programmer)
Automation can never completely
replace accounting. It is not profitable
56

57.

Отчетность в высказываниях
R. Kiyosaki
(American
entrepreneur,
investor,
writer)
If you want to take control
of your life, you must
regularly prepare personal
financial statements. If
you do not want to do
this, it is better to give
money to others in a
retirement fund.
57

58.

Financial statements
Users
Financial statements are
provided to external users
of information
58

59.

Who are external users?
Users with
direct
financial
interest
1. Shareholders
2. Investors
3. Suppliers
59

60.

Who are external users?
Users with
indirect
financial
interest
1.
Tax authorities
2.
Banks
3.
Government bodies
4.
Auditing companies
5.
Buyers
60

61.

Who are external users?
Users without
financial
interest
1.
Exchanges
2.
Statistical bodies
3.
Judiciary
61

62.

What is reporting for?
Tasks
1.
Analysis of financial
condition
2.
Evaluation of the efficiency
of functioning
3.
Planning for future
activities
62

63.

Assumptions of Formation of Financial Reporting
Indicators
Property
isolation
The assets and liabilities of
an organization exist
separately from the assets
and liabilities of the owners
of this organization and the
assets and liabilities of
other organizations
63

64.

Assumptions of Formation of Financial
Reporting Indicators
Business
continuity going concern
The organization will
continue its activities for
the foreseeable future and
it has no intention and need
to liquidate or materially
reduce its activities, and,
therefore, the obligations
will be settled in due course
64

65.

Assumptions of Formation of Financial
Reporting Indicators
Business
continuity going concern
65

66.

Assumptions of Formation of Financial
Reporting Indicators
Consistency in
the application
of accounting
policies
The accounting policy
adopted by the organization is
applied consistently from one
reporting year to the next.
66

67.

Assumptions of Formation of Financial
Reporting Indicators
Temporal
certainty of the
facts of
economic life –
accrual basis
They are reflected in the
accounting and reporting of
the period in which they are
committed, regardless of the
actual time of receipt or
payment of funds associated
with these facts.
67

68.

General requirements for financial statements
Reliability
The reporting should give a reliable
view of the financial position of an
economic entity as of the reporting
date, the financial result of its
activities and cash flows for the
reporting period, which is necessary
for users of this reporting to make
economic decisions
68

69.

Financial statements
Annual financial statements consist of a balance
sheet, a statement of financial results and
explanations to them

70.

Financial statements
It is mandatory to draw up annual financial
statements (for a calendar year). Preparation of
interim financial statements is voluntary, or
mandatory if required by law

71.

Financial statements
The financial statements are considered to be
drawn up after they are signed by the head of the
economic entity.
In case of publication of financial statements that
are subject to mandatory audit, such financial
statements must be published together with the
auditor's report.
With regard to financial statements, a trade
secret regime cannot be established.

72.

Financial statements
State information resource - a set of financial
statements of economic entities, as well as audit
reports on it in cases where the statements are
subject to mandatory audit.
In order to form a state information resource, an
economic entity is obliged to submit one copy of
the prepared reporting to the tax authority at the
location of the economic entity.

73.

Accounting method

74.

Method elements
Traditionally, there are 8 elements of the
accounting method:
- Documentation
- Inventory
- Measurement
- Calculations (costing)
- Accounts
- Double entry
- Balance
- Reporting

75.

Inventory
Inventory is a check of the compliance of the
actual availability of assets with their presence
according to the documents.
Inventory must be carried out before drawing up the
annual financial statements, as well as when
changing materially responsible persons, revealing
the facts of theft
75

76.

Inventory - documents
1. Order to conduct an inventory
2. Inventory list (including receipt of the materially
responsible person)
3. Collation sheet
4. Act on the results of the inventory
76

77.

Inventory - results
1. Surplus (other incomes at market prices (fair
value))
"... Inventory, like any general cleaning, is good
because you find what you are not looking for ..."
2. Shortages (shortages and losses from
damage to values)
77

78.

Natural loss
Methodological recommendations for the
development of norms of natural loss (Order
of the Ministry of Economic Development of
March 31, 2003 No. 95)
Letter of the Ministry of Finance dated May
23, 2014 No. 03-03-RZ / 24762 - the rate of
natural loss must be approved at the
Government level. Self-developed norms
are not applied
78

79.

Example
The frozen berry was received on 08/10/19. Net
weight 1000 kg.
The berry was released:
600 kg - 12/14/2019
395 kg - 12/21/2019
After that, the remainder of the berry is 0 kg.
Natural loss rates:
when stored for 4 months 0.65%;
when stored for 5 months 0.77%;
79

80.

Example
Losses during storage of berries released on
12/14/19 (4 months 5 days)
600 * 0.65% + 600 * (0.77% -0.65%) / 30.42 * 5
days = 4.0183 kg
Losses during storage of berries released on
12/21/19 (4 months 12 days)
(400 - 4.0183) * 0.65% + (400 - 4.0183) * (0.77% 0.65%) / 30.42 * 12 days = 2.761 kg
Losses by norms > Actual losses
80

81.

The culprit has not been identified
Letter of the Ministry of Finance dated 20.05.14 No. 0303-07 / 23687 - losses from theft can be taken into
account in expenses in the absence of guilty persons
and the presence of a document confirming their
absence - decisions of the investigator (representative
of the authorized body) + letters dated 06.10.17 No. 03
-03-06 / 1/65418 + dated 17.12.18 No. 03-03-06 /
1/92021 + dated 20.08.19 No. 03-03-06 / 1/63646
81

82.

Doubtful accounts receivable
The receivables of the organization are
considered doubtful if they are not repaid or, with
a high degree of probability, will not be repaid
within the terms established by the contract, and
are not secured by appropriate guarantees.
82

83.

Doubtful accounts receivable
Since 2011, organizations are required to
create reserves for doubtful debts.
Basis - the results of the inventory of accounts
receivable
83

84.

Doubtful accounts receivable
Accounts receivable are recognized as doubtful
from the date of due date of payment under
the agreement - letter of the Ministry of Finance
dated July 26, 2018 No. 03-03-06 / 1/52667.
Provisions can be created depending on the
duration of the delay in payment (<45 days,
45-90 days,> 90 days)
84

85.

Monetary measurement
Accounting objects are subject to monetary
measurement.
Monetary measurement of accounting objects in
the Russian Federation is performed in the
currency of the Russian Federation.
Unless otherwise provided by law, the value of
accounting items expressed in foreign currency is
subject to conversion into the currency of the
Russian Federation.

86.

Calculation (costing)
In some cases, it is not possible to directly
determine the cost estimate of accounting
objects (costs relate to several objects, the cost
of an object consists of several cost items). In
this case, they resort to a special calculation calculation.

87.

Costing - Cost Allocation
Let the transported goods occupy the following volumes
and have masses:
cotton wool - 3 cubic meters - 300 kg;
diapers - 4 cubic meters - 400 kg;
syrup - 1 cubic meter - 2000 kg.
The total capacity of the car body is 8 cubic meters. m
.; total lifting capacity - 3000 kg.
Delivery costs amounted to 800 rubles.

88.

Costing - Cost Allocation
Accordingly, the amount of transportation costs can be
distributed among the goods as follows:
cotton wool = 800 * 3/8 = 300 rubles;
diapers = 800 * 4/8 = 400 rubles;
medicines in the form of syrups = 800 * 1/8 = 100
rubles.
88

89.

Costing - Cost Allocation
Let the transported goods occupy the following volumes
and have masses:
cotton wool - 3 cubic meters - 300 kg;
diapers - 4 cubic meters - 400 kg;
syrup - 1 cubic meter - 2000 kg.
The total capacity of the car body is 9 cubic meters. m
.; total lifting capacity - 2700 kg.
Delivery costs amounted to 800 rubles.

90.

Costing - Cost Allocation
Accordingly, the amount of transportation costs can be
distributed among the goods as follows:
cotton wool = 800/2700 * 300 = 88.9 rubles;
diapers = 800/2700 * 400 = 118.5 rubles;
syrups = 800/2700 * 2000 = 592.6 rubles.

91.

Recommendation
Try to account as many cost drivers as
possible.
For this, it is possible to propose to use
multi-factor approaches to the distribution of
costs.
But it should not be forgotten that the multifactor approach to cost allocation turns out
to be more time consuming.

92.

Costing - Cost Allocation
Let the transported goods occupy the following
volumes and have masses:
cotton wool - 3 cubic meters - 300 kg;
diapers - 4 cubic meters - 400 kg;
syrup - 1 cubic meter - 2000 kg.
Delivery costs amounted to 800 rubles.
Distribute costs taking into account two bases: the
volume and weght of the transported values.

93.

Costing - Cost Allocation
First, let's calculate the distribution ratios for each base.
1. Ratios by volume:
cotton wool - 3/8;
diapers - 4/8;
syrups - 1/8.
2. Ratios by weight:
cotton wool - 3/27;
diapers - 4/27;
syrups - 20/27.

94.

Costing - Cost Allocation
Then we calculate the total bases for each product:
cotton wool - (3/8 + 3/27) / 2 = (105/216) / 2 = 105/432
diapers - (4/8 + 4/27) / 2 = (140/216) / 2 = 140/432
syrups - (1/8 + 20/27) / 2 = (187/216) / 2 = 187/432
The total sum of all 3 bases for distribution is 432/432.
We will distribute the delivery costs in proportion to the
received ratios:
cotton wool - 800 * 105/432 = 194.4 rubles;
diapers - 800 * 140/432 = 259.3 rubles;
syrups - 800 * 187/432 = 346.3 rubles.

95.

Costing - Cost Allocation
Let's add one more factor to the model - cost
cotton wool - 3 cubic meters - 300 kg - 25
thousand rubles;
diapers - 4 cubic meters - 400 kg - 125 thousand
rubles;
syrup - 1 cubic meter - 2000 kg. - 1000 thousand
rubles.
Delivery costs amounted to 800 rubles.
Distribute costs taking into account three bases:
the volume and mass of the transported values.

96.

Costing - Cost Allocation
Ratios
Goods
Volum
e
Cotton wool
0,375
0,111
0,022
0,169
135,42
Diapers
Syrup
0,500
0,148
0,109
0,252
201,83
0,125
1
0,741
1
0,870
1
0,578
1,000
462,75
800
Total
Weight
Cost
Average
Amount
96

97.

Costing - Cost Allocation
The multi-factor distribution allows you to take into
account many factors that affect the resulting
indicator. This is its main advantage.
The main disadvantages of this approach are:
averaging of distribution bases, which reduces the
accuracy of calculations (of the two parameters volume and mass - you still need to choose the
more important one);
an increase in the costs of building a management
accounting system (it is still easier to calculate one
base than several).
97

98.

Accounts
In accordance with the classical definition, an
account is a special two-sided table that allows you
to systematize information about accounting
objects.
The left side of the account is called debit.
The right side of the account is called a Credit.
The amount of the transaction on the debit or
credit of the account is called the turnover.
The balance of the account is called the balance.

99.

Активные счета – на них отражается
имущество организации
Dt
Bal
Materials
Ct
100
1. 200
2. 300
3. 500
1. 150
2. 350
Turn Dt 1000
Turn Ct 500
Bal
600
Bal end = Bal
start +
Turn Dt – Turn Ct

100.

Пассивные счета – на них отражаются источники
формирования имущество организации
Dt
Loans
Bal
Ct
100
1. 200
2. 300
3. 500
1. 750
2. 350
Turn Dt 1000
Turn Ct 1100
Bal
Bal end = Bal
start +
200
Turn Ct – Turn Dt

101.

Активные счета – на них отражается
имущество организации
Dt
Settlements with
buyers
Bal
Ct
100
1. 200
2. 300
3. 500
1. 650
2. 550
Turn Dt 1000
Turn Ct 1200
Bal
100
Bal end = Bal start + Turn Dt – Turn Ct
If the result is negative, then the balance side changes!

102.

Double entry
The simultaneous reflection of a debit
transaction on one account and a
credit on another account is called
double entry. It is believed that it
originates from the medieval monkmathematician Luca Pacioli, who
published his famous "Treatise on
Accounts and Records"

103.

Double entry
Dt
Bal
Materials
Ct
Dt
Accounts payable
400
Bal
300
1. 200
1. 200
Turn Dt 200
Bal
Ct
600
Turn Ct
0
Turn Dt
0
Turn Ct 200
Bal
500
Materials received from the supplier in the amount of 200 rubles.
The accounts for materials and debts to the supplier increases

104.

Double entry
There are 4 types of business transactions in total
Asset + = Liability + (see previous example)
Asset - = Liabilities Asset ± = Passive
Asset = Passive ±

105.

Double entry (A- = P-)
Cash
Dt
Bal
Turn Dt
Bal
Ct
Dt
Accounts payable
Bal
500
0
300
1. 200
1. 200
Turn Ct 200
Turn Dt 200
Turn Ct
Bal
The debt to the supplier in the amount of 200 rubles
was paid in cash.
Ct
300
0
100

106.

Double entry (A ± = P)
Dt
Bal
Turn Dt
Bal
Materials
Ct
600
0
450
Dt
Bal
Production
500
1. 150
1. 150
Turn Ct 150
Turn Dt 150
Bal
Ct
Turn Ct
650
The materials were released into production
in the amount of 150 rubles.
0

107.

Double entry (A = P ±)
Dt
Long-term loans
Bal
Ct
0
Bal
Ct
550
1. 250
Turn Ct 250
Bal
Short-term loans
400
1. 250
Turn Dt
Dt
650
Turn Dt 250
Turn Ct 0
Bal
A short-term loan was reissued into a long-term one
in the amount of 250 rubles.
300

108.

Accounting objects

109.

Assets
Assets are resources whose value can be
estimated and from which the company expects
to receive economic benefits.
Depending on the term of their circulation, they
are divided into non-current (long-term) and
current (short-term) assets.

110.

Cash
Cash means cash and non-cash funds of an
organization stored in the cash desk and on
settlement (currency) accounts in banks.
All cash must be kept at the cash desk of the
organization. At the same time, there is a "cash
limit" - a limit value, above which, as of the end
of the day, there should not be a cash balance

111.

Cash
Non-cash funds are kept in current accounts in
banks. Currently, almost all interaction of
organizations with banks about payments is carried
out in electronic form.
Most of the payments are made on the basis of
payment orders drawn up by the payer. Without
the client's order, funds are debited only by a court
decision and in other cases established by law

112.

Cash
In some cases, transactions on current accounts may be
blocked. This usually happens at the request of the
Federal Tax Service. The grounds for blocking an account
are:
- non-payment of taxes (only within the amount specified
in the decision of the tax authority);
- failure to submit a tax return (all funds on current
accounts can be blocked);
- non-compliance with the rules of electronic document
management (as a rule, in relations between tax
authorities and an organization);
- the results of tax audit.

113.

Cash
To store currency, organizations may use foreign
currency accounts. However, on the territory of the
Russian Federation, all payments should be carried
out only using the national currency. Therefore,
foreign currency accounts, as a rule, are opened by
organizations engaged in foreign economic activity.
When storing funds in a foreign currency account, an
organization may get exchange rate differences
(positive - income; negative - expense).

114.

Cash
In addition to current and foreign currency accounts,
organizations may have special bank accounts. Today,
as a rule, this is represented by only one type of
accounts - letters of credit, but using of them is
constantly decreasing.
The essence of the letter of credit is that funds are
withdrawn to it to pay for one previously agreed
operation. When the bank receives documents from
the second party, the credit institution will make the
payment from the letter of credit account without
the agreement of the payer.

115.

Cash
Operations with cash is called cash flow.
The cash flows of the organization are divided into
cash flows from current, investment and financial
operations.
An entity's cash flows from operations in the ordinary
course of business that generate revenue are
classified as cash flows from current operations.

116.

Cash
a) receipts from the sale of products and goods to buyers;
b) payments to suppliers (contractors) for purchased raw
materials, materials, works, services;
c) payments to the employees of the organization, as well as
payments in their favor to third parties;
d) payments of corporate income tax;
e) payment of interest on debt obligations (loans and
borrowings), with the exception of interest included in the
cost of the acquired property;
f) receipt of interest on customer receivables (for example,
for deferred payment);
g) cash flows on financial investments purchased for the
purpose of their resale in the short term (as a rule, within
three months).

117.

Cash
An entity's cash flows from transactions related to
the acquisition, creation or disposal of an entity's
non-current assets are classified as investment cash
flows.

118.

Cash
a) payments to suppliers and employees of the organization in
connection with the acquisition, creation, modernization,
reconstruction and preparation for the use of non-current
assets;
b) payment of interest on debt obligations included in the cost
of non-current assets;
c) receipts from the sale of non-current assets;
d) payments / receipts in connection with the acquisition of
shares of other organizations, with the exception of financial
investments acquired for the purpose of resale in the short
term;
e) loans to other persons;
f) dividends and similar receipts from equity participation in
other organizations;

119.

Cash
The cash flows of the organization from operations
related to the attraction of financing by the
organization on a debt or equity basis, leading to a
change in the amount and structure of the equity and
borrowed funds of the organization are classified as
cash flows from financial operations

120.

Cash
a) monetary payments of owners to the capital, proceeds from
the issue of shares, an increase in participation interests;
b) payments to owners in connection with the redemption of
the organization's shares from them or their withdrawal from
the membership;
c) payment of dividends and other similar payments for the
distribution of profits in favor of the owners;
d) payments from the issue of own bonds, bills, and other
debt securities;
e) payments in connection with the redemption (redemption)
of own bills and other own debt securities;
f) getting credits and loans from other persons;
g) return of loans and borrowings received from other persons.

121.

Cash documents
Monetary documents are special protected in some
way documents (pin codes, passwords, etc.),
purchased and stored in the organization and having
some value estimate, giving them the right to pay for
any services.
Calculations for their purchase between the parties
have already been made, and the services that can
be obtained with the help of these documents have
not yet been provided (gas coupons, food coupons,
postage stamps, express payment cards, etc.).

122.

Cash equivalents
Cash equivalents are highly liquid financial
investments that can be easily converted into a
predetermined amount of cash and are subject to an
insignificant risk of changes in value.
The legislation does not establish a specific list of
cash equivalents. As a rule, these include demand
deposits opened with credit institutions; bills
received and short-term loans issued for the period
up to three months.

123.

Short-term financial investments
Financial investments are investments in other companies
made through the acquisition of financial assets, which
include:
- equity securities (shares);
- debt securities (bonds and bills of exchange of other
organizations);
- loans granted, formalized by a loan agreement without
backing it with any kind of security;
- term bank deposits;
- the rights of claim redeemed from other organizations
(under an assignment agreement (assignment of the right
of claim)).

124.

Short-term financial investments
The main differences between short-term financial investments
and cash equivalents are:
- duration (for financial investments, as a rule, it is more than 3
months);
- the level of reliability of the assessment of the amount into
which the corresponding assets can be converted (for financial
investments, the amount may vary, while for cash equivalents it
is stable and in most cases is known in advance)
- the recovered economic benefit (financial investments are
made to generate income (dividends, interest, exchange rate
differences), and cash equivalents are considered as a reserve
option.

125.

Short-term financial investments
All financial investments are divided into two groups:
- financial investments, for which the current market
value can be determined (as a rule, these are
financial investments that circulate on the financial
market);
- financial investments for which their current market
value cannot be determined.

126.

Short-term financial investments
If the current market value can be determined (for
example, at the rate of securities on the stock
exchange), then the organization should revalue
financial investments, and show the difference
between two estimates as income or expense.
Otherwise, the assessment of financial investments
remains unchanged until they are sold.

127.

Accounts receivables
Accounts receivable are amounts owed to this
organization by other participants in economic
relations, which may be other organizations and
individual entrepreneurs (buyers for goods, suppliers
for advances issued to them), budgetary system
authorities (for example, if the organization has
made an overpayment of taxes and fees), extrabudgetary funds, employees of the organization,
insurance companies, etc.

128.

Accounts receivables
Accounts receivable are funds withdrawn from the
organization's turnover. At the moment, these funds
are used by some other economic entity, but for this
organization, these are virtual assets, quasi-assets
that will take on a real form only after their
conversion/
In addition, there is a risk of non-payment of
accounts receivable, that is, it may turn out to be
doubtful, and in the worst case - hopeless.

129.

Accounts receivables
A receivable is recognized as doubtful if the
organization has no assurance about the receipt of
cash or cash equivalents in the foreseeable future to
repay it.
Formally, doubtful debt is not the same as overdue
debt. However, in practice, as a rule, the first sign
indicating the need to consider the debt as doubtful
is the fact of delay in payment on the part of the
debtor.

130.

Accounts receivables
Organizations can use several tools to manage
doubtful accounts receivable. One of the most
common ways is to create a provision for doubtful
debts with the inclusion of the corresponding
amounts in the organization's expenses. In fact, this
tool can be viewed as a kind of insurance tool.

131.

Accounts receivables
An extreme case of doubtful accounts receivable is bad
accounts receivable. Bad debts (that is, debts that are
unrealistic to be collected) are those debts to an
organization for which:
a) the established limitation period has expired (as a
general rule, this is 3 years);
b) in accordance with civil legislation, the obligation is
terminated due to the impossibility of its fulfillment, on
the basis of an act of a state body or the liquidation of
an organization.

132.

Accounts receivables
In addition the debtors of the organization may be its
own employees (for example, an employee of the
organization was given money for travel expenses, but
he did not completely use up the amounts issued).
Separately, it is necessary to highlight the receivables
of suppliers for advances issued. It will be redeemed
not in cash, but in commodity form.

133.

VAT
The amounts of VAT on the purchased values are
actually a kind of accounts receivable, that is, the
organization has the right to return the VAT paid to the
supplier of inventory items from the budget. However,
so far these amounts have not become accounts
receivable, that is, they have not been presented for
reimbursement from the budget, since the formalities
established by the legislation have not been fulfilled.

134.

Stocks
Inventories are one of the main group of assets, which
includes several important components:
- raw materials and supplies;
- semi-finished products and components;
- fuel;
- container;
- spare parts;
- construction Materials;
- overalls;
- unfinished production;
- finished products;
- goods.

135.

Fixed assets
Fixed assets are assets that have a tangible form
that can bring economic benefits as a result of
their use in the production process or for
administrative purposes and have a useful life of
more than 12 months.

136.

Fixed assets
- buildings and constructions. In recent years, this
subgroup is increasingly referred to as real estate;
- vehicles, including not only cars, but also planes, ships,
locomotives and wagons;
- equipment, including various production lines, machine
tools, office equipment;
- land plots and other similar objects.

137.

Fixed assets
Organizations are given the right to revalue fixed assets,
that is, to bring their residual value to the current market
(or fair) value, since it becomes obsolete over time.

138.

Intangible assets
These are non-monetary assets protected by certain
copyrights. These include:
- works of science, literature and art;
- exclusive rights to computer programs (as a rule, only
the developer himself has them);
- database;
- phonograms;
- rights to inventions, utility models, industrial designs;
- selection achievements;
- suitably protected trade names;
- trademarks and service marks, etc.

139.

Goodwill
One of the most specific types of intangible assets is
goodwill - business reputation.
Goodwill can arise from an organization only if it has
acquired another organization as an integral property
complex. If the amount paid for the acquired organization
is greater than the difference between the assets and
liabilities of this company, then this difference forms the
buyer's goodwill.

140.

Investments in future non-current assets
Fixed assets and intangibles sometimes have a long
period of preparation for the start of use (for
example, fixed assets must be mounted, tested,
and permits obtained). "Future fixed assets" and
"future intangible assets" are called investments in
non-current assets

141.

Profitable investments in material assets
Income investments in tangible assets include those fixed
assets that are intended to be leased (finance lease).
That is, the organization itself is not going to use the
objects for their intended purpose, receiving economic
benefits from this, but it grants such a right to the lessee,
and forms the benefit as a result of receiving lease
payments.

142.

Long-term financial investments
Long-term financial investments are investments in
securities for a period of more than 12 months. As a rule,
these are investments that involve the extraction of
income not as a result of speculative transactions (bought
cheaper - sold more expensive), but in the form of
income directly related to the type of securities (for
shares - these are dividends, on bonds and bills - interest)

143.

Capital - sources of property formation
The sources of property formation are divided into
two groups:
- equity capital (within which there is no division
into subgroups);
- debt capital, including the most urgent
liabilities, short-term liabilities with a period of
up to 12 months and long-term liabilities with a
period of more than 12 months.

144.

Accounts payable
Accounts payable is a debt owed by this
organization to someone.
There are many types of accounts payable:
- to suppliers and contractors;
- to buyers on advances received;
- organization personnel;
- budget, etc.

145.

Accounts payable
Accounts payable to suppliers and contractors
for goods, works, services - this type of
organization’s liabilities is the main one in
accounts payable. Receiving material values
from the supplier, the organization
simultaneously forms a counter liability in an
amount equal to the assessment of the values
received. This is what gives the right to consider
accounts payable as a source of property
formation.

146.

Accounts payable
When the liability is extinguished in cash or other
assets, then there is a simultaneous disposal of
property and an adequate decrease in the source
of formation of this property.

147.

Accounts payable
Period
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total amount of
accounts
payable, billion
rubles
17683
20954
23632
27532
33174
38925
42280
44481
49229
52615
64073
Overdue
accounts
payable, billion
rubles
1006
1208
1188
1470
1881
2429
2656
2616
3440
3898
3967
Share of overdue
accounts
payable,%
5,689
5,765
5,027
5,339
5,670
6,240
6,282
5,881
6,988
7,409
6,191
Debts to
suppliers and
contractors ,
billion rubles
8791
10667
12511
14974
16745
18045
19857
20654
23570
24694
28771
Share of
accounts
payable to
suppliers and
contractors
49,714
50,907
52,941
54,388
50,476
46,358
46,965
46,433
47,878
46,933
44,903

148.

Short-term credit and loans
Short-term credits and short-term loans provided to
organizations by other entities, for the period that is
less than 12 months.
The main difference between bank credit and loans is
the subject of the provision of borrowed funds: in the
case of a credit, these are credit organizations; loans
can be provided by any legal entity and even an
individual.
In addition, credit are issued only in cash, while loans
can be issued in commodity form.

149.

Provisions
Provisions are liabilities with an uncertain amount or
period that either will necessarily arise in the future
because the obligating event has already occurred or are
highly probable.
The most common situations that give rise to provisions:
- participation of the organization in the trial as a
defendant;
- sale of goods with a warranty period;
- the liability to provide the next paid holidays to
employees of the organization.

150.

Long credit and loans
Long-term credit and borrowings provided to
organizations by other entities for the period that is
more than 12 months. Moreover, even if the loan was
initially attracted for a period of more than 12
months, but less than 12 months remain until its
repayment as of the reporting date, then it must be
requalified as short-term.

151.

Equity
The authorized capital is the valuation of the
organization's property, which was contributed to it by the
founders at the time of its creation.
The amount of the authorized capital and the distribution
of shares in it between the founders is described in the
Charter of the organization.
As a rule, the minimum possible size of the authorized
capital is regulated by the legislation of the country. In
the Russian Federation, for non-public joint stock
companies, this value is at least 10 thousand rubles; for
public joint stock companies - at least 100 thousand
rubles.

152.

Equity
The share in the authorized capital belonging to the
participants of the established organization gives them
the right to participate in the distribution of profits. In a
joint-stock company, these are dividends

153.

Equity
Additional capital ("air capital") - capital resulting from
the revaluation of fixed assets. Gradually over the useful
life of property, plant and equipment, their residual value
begins to differ from their market (fair) value. In such
situations, entities gain the right to revalue their assets.
The increase in the value of assets, which arose "out of
nothing", forms additional capital.

154.

Equity
In addition to the revaluation of fixed assets, share
premium can also be a source of additional capital. This
is the difference between the par value of the shares
issued by the organization and the value at which they
were placed on the financial market.

155.

Equity
Profit of the organization:
- gross profit, defined as the difference between the
revenues and the cost of sales of these products;
- profit from sales - gross profit, reduced by the amount
of commercial (selling expenses) and administrative
expenses of the organization;
- profit before tax is the profit from sales, adjusted for
the balance (difference) of other incomes and other
expenses of the organization;
- profit before tax, reduced by the amount of income tax,
forms retained earnings of the reporting year

156.

Equity
Part of the profit can be used to pay dividends, and part to form reserve capital. In case of joint-stock companies,
the formation of a reserve capital is not the right of the
organization, but an obligation (5% of the authorized
capital).
In fact, the reserve capital is an allocated part of the
profit, which is not sent to payments to participants, but
can be used to cover losses in future periods.

157.

Equity
Targeted financing and receipts are any
transfers from the budget that have a specific
purpose. It is to achieve this goal that these funds
can be spent. If the goal is not achieved, then in
most cases the funds will need to be returned.