VAT planning in management accounting. Element-by-element planning of value added tax as part of the budgeting of a commercial organization. What does it look like in numbers

The basis of the management accounting methodology is the formation of a unified register of business transactions with the required amount of analytics. Basic set are movements Money indicating the real meaning of transactions. Modern accounting programs allow you to enter the correct management analytics when entering statements automatically based on specified templates. More advanced systems use treasury elements and set the necessary management information at the payment planning stage. There is nothing seditious about this; in this way the basic principle of automation of accounting programs is implemented: “information must be entered at the place where it appears.”

But today we are seeing new trends. The Federal Tax Service began to determine the outline of a business not on formal, but on factual grounds. And the courts are completely on the side of the tax authorities. In cases (A29-459/2014, A11-556/2014, A12-14630/2014, A40-153792/2014, A27-5033/2015, A27-17015/2014) they were again recognized as debtors for additional tax assessments in all three instances created legal entities instead of those already verified according to the following criteria (in different cases the set of criteria is different):

• the same actual address of the activity, the same website, contacts;
• almost completely identical staff;
• the same actual composition of controlling persons;
• the same clients and the form of work with them;
• redirection of cash flows;
• using the same fixed assets.

To put it simply, the concept of business in the everyday sense of the word is enshrined in law enforcement practice, as ordinary people and founders understand business. In fact, the Federal Tax Service attributes tax debt not to a formal legal entity, but to a business in the everyday sense of the word that used this legal entity in its activities.

In such conditions, for companies actively using tax optimization schemes, modern management accounting and treasury programs become very toxic tools. I will allow myself to give some quotes from public (freely available) free webinars of one integrator company (I will not name it for obvious reasons) that sells such a program. And I will briefly comment on each quote.

“If you have many legal entities, then you can download each bank statement separately, you can collect them all in one folder and click the download button (...) in any company in Russia that sells something and buys something, it already has there are up to five legal entities (...) with the construction projects that we encountered, there are even more than 15 legal entities in them, this includes self-employed persons, that is, they have 3-4 of their own companies and somewhere up to 20 self-employed persons (...) and they need to collect all this information". We all understand perfectly well why construction company Investors are needed, but this scheme only works as long as it appears that the investor is carrying out independent activities.

“One legal entity bought the goods, and another legal entity sold the goods to the client (...) the movement between legal entities is exclusively internal (...) the goods may not have arrived from warehouse to warehouse, most likely they remained there (...) how to avoid duplication ? To do this, you need to mark all such counterparties in the system as group companies, our companies (...) the program, seeing the sale of one of its legal entities to another, automatically carries out these movements as transit ones.”; another quote: “In 1C, out of your 6-7 legal entities, there may be only 5 (...) a simple individual investor if he pays taxes in a simple way, but he doesn’t have 1C (...) these investors should also be entered into the system and indicated as group companies (...) movements on them should go to the intra-holding". Direct indication of all legal entities and individual entrepreneurs who are involved exclusively in the process of extracting tax benefits. And you can’t say that the mark “our company” appeared by mistake; all the proceeds are listed as “internal holding”.

“In Russia, due to some specifics, almost every company can have up to 5 legal entities: one buys, another sells, the third stores, the fourth does something else, the fifth is an individual entrepreneur (...) a very rather complex structure (...) in all In such companies, management is not interested in reporting for a specific legal entity; they are interested in consolidated information collected from various sources.”. If reporting on a legal entity is of no interest to anyone, then this is again a direct confirmation that the legal entity was created for some other, non-entrepreneurial purpose. And information painstakingly collected and structured from different sources in one place will be useful not only to the company’s management.

“The financial director benefits from a system of electronic approval of applications (...) in accounting, you simply cannot have the necessary management analytics (...) all necessary information is entered into the application in advance by the payment initiator (...) it is possible to provide access to the approval of requests from employees not only of financial departments, including for the approval of subject-specific specialized features, for example, IT specialists on the correctness of the paid equipment, engineers on the need and compatibility of purchased goods and materials". Centralized management of cash flows is a serious argument in favor of the interdependence of legal entities, and a large number of witnesses (payment initiators, agreed upon) will only make the work of the tax office easier.

The crown of all this is the business logos in the “our clients” section on the website of the integrator company that sells this management accounting system. Here we are, collecting all the information about our movements in one known place. I would not count on the fact that it will be possible to prevent inspectors from accessing the database. Firstly, the powers of our security forces have recently been greatly expanded to the point of initiating criminal cases, within the framework of which anything can be confiscated, and secondly, by disabling and hiding for the period of inspection the program that automates the most important business processes in the company (management cash flows, making other management decisions), you will seriously complicate your operating activities and increase the risk of losses.

I am not criticizing the creators of management accounting software. They make the right and high-quality product. It’s just that this product is not very suitable for those who reflect in the legal field a different business model from which they actually make money. Management accounting for such a business should be adjusted for aggressive government actions in terms of administering the tax burden. Gone forever are the days when, in order to optimize taxes, it was enough to draw up a formal package of documents, put it on a shelf and work quietly. Today, all business processes, including management accounting, should, if possible, be built in accordance with the picture of the business that we want to show to the tax inspectorate.

It seems to me that a “safe” management accounting methodology should take into account the following several principles:

1. if you use several legal entities and the tax benefit arises only if they supposedly act “independently,” then such visibility should be traced in terms of management accounting. Namely, each company must have its own agreement with the integrator, the database must be serviced by employees on staff of this company, management reporting must be prepared separately for this legal entity, at least for appearances.
2. Since tax authorities actively use in evidence a large number of different details of business transactions arising from business customs, imaginary facts must be avoided as much as possible. For example, there should be no revenue reflected in management accounting as “transit” or “inter-holding”. Issues of doubling in consolidated reporting must be resolved in other ways.
3. It is necessary to minimize the number of personnel aware of the consolidation of management information. And the consolidation itself should also be reduced to the necessary minimum. It is ideal that each legal entity maintains its own database, and only management reporting is consolidated. If you still need a general register (the most toxic thing in terms of evidence for tax authorities), then you need to try to make sure that as few people as possible know about its existence. And access to this database should be carried out exclusively locally.

I will certainly continue to study this topic and will publish all successful solutions on my blog. Management accounting should help the business, not create problems.

In conditions when the amounts of calculated taxes largely determine the decisions of the management and owners of the organization, reflecting in the financial statements only the amount of tax payable at the end of the reporting (tax) period gives rise to a number of problems: firstly, it is impossible to obtain information about the reasons for the deviation of accounting profit from tax; secondly, financial statements prepared according to this principle do not allow one to determine the amount of expected expenses for paying income taxes in future periods.

ZimarevaZh.A.
Art. Lecturer, Department of Accounting and Taxation, SibUPK (Novosibirsk)

In conditions when the amounts of calculated taxes largely determine the decisions of the management and owners of the organization, reflecting in the financial statements only the amount of tax payable at the end of the reporting (tax) period gives rise to a number of problems: firstly, it is impossible to obtain information about the reasons for the deviation of accounting profit from tax; secondly, financial statements prepared according to this principle do not allow one to determine the amount of expected expenses for paying income taxes in future periods. As a result, net profit may be incorrectly calculated.
So. If an organization uses the cash method when calculating income tax, the rules for forming income and expense indicators in accounting and tax accounting will be different, which will lead to a discrepancy between accounting and taxable profits for the same reporting period and create a tax effect.
Example 1. An organization uses the cash method when calculating income tax. In XXX1, 100 units were sold. goods at a price of 3000 rubles. per unit. cost of 1 unit. goods amounted to 2500 rubles. Payment for 80 units. in the amount of 240,000 rubles. received in XXX1. The remaining amount - in XXX2. Thus, the accounting profit in XXX1 amounted to 50,000 rubles, and taxable profit -
40,000 rub. Income tax is calculated based on taxable profit.
As can be seen from table. 1, the net profit received by the organization in XXX1 amounted to 40,400 rubles. Consequently, the owners of the organization can use this profit to pay dividends.
In XXX2, the organization did not conduct any activities, there was no accounting profit, but payment was received for 20 units. goods shipped in XXX1 and, therefore, taxable profit arose, on which the organization must calculate income tax.
Presented in table. 2 calculations show that in XXX1 the funds allocated for the payment of dividends exceeded the real amount of net profit, since in reality it was less by the amount of tax, the obligation to pay which arose in XXX2 (Table 3).
Therefore, the calculation of net profit in XXX1 was carried out in violation of the accrual method. The use of deferred taxes in accounting and reporting will help neutralize the tax effect and correctly formulate the organization’s financial reporting indicators. In the example considered (see Table 3), the amount of income tax for XXX1 consists of two parts:
9600 rub. - the amount of current income tax calculated on the basis of taxable profit;

Table No. 1
Financial indicators of the organization’s activities in XXX1, rub.

Table No. 2
Financial indicators of the organization’s activities in XXX2, rub.

Table No. 3Comparison of data from the organization’s profit and loss report for the years XXX1 and XXX2, rub.

2400 rub. - the amount of deferred income tax, which reduces net profit in XXX1, but will be paid to the budget in XXX2.
The concept of deferred taxes has been used in global accounting practice since 1967. It first appeared in American accounting, then this indicator was introduced into the national accounting standards of European countries. The term “deferred taxes” was introduced into International Financial Reporting Standards (IFRS) by the first edition of IFRS 12 “Accounting for Income Taxes” in 1979. Since then, the standard has undergone significant changes, and the 1996 standard currently applied is IFRS 12 Income Taxes.
In Russian accounting, the concept of deferred taxes appeared in connection with the development, in pursuance of an accounting reform program in accordance with international financial reporting standards, of the Accounting Regulations “Accounting for Income Tax Calculations” PBU 18/02.
The idea behind deferred taxes is that an entity must recognize a deferred tax liability if the recovery of an asset or the settlement of a liability would result in higher or lower tax payments in future periods than when the recovery occurred. or the settlement would have no tax consequences.
In world practice, two methods of calculating deferred taxes are used: deferrals and liabilities. IFRS 12 as amended in 1996 prohibits the use of the deferral method and introduces the balance sheet liability method (balance sheet method).
The essence of the deferment method is as follows. When comparing accounting and tax profits of the reporting period, temporary differences are determined, based on the results of which deferred tax assets and deferred tax liabilities are accrued.
Therefore, the deferral method is based on income statement figures. Deferred tax balance sheet indicators are secondary and are obtained by calculation based on how much their value has changed during the reporting period. IN in this case Deferred tax assets and liabilities represent the amounts of income taxes that an organization “overpaid” or “underpaid” in the reporting period.
Deferred tax assets and liabilities are accrued based on the tax rate in effect in a given period, since they do not depend on future rates.
The balance sheet method determines the future obligation to pay income tax based on the amounts of expected income and expenses that will arise due to the assets and liabilities of the organization. The balance sheet method is based on indicators balance sheet. The income statement indicators are secondary - they are determined by calculation as the difference between the indicators at the end and beginning of the reporting period.
When using this method, for each asset and liability, the difference between their book value and tax value is determined and deferred tax liabilities and assets are accrued for them. The tax value of an asset or liability is the amount at which the asset or liability is taken into account for tax purposes.
Unlike the deferral method, the balance sheet method assumes that the income tax rates that will apply in the future are used to determine the asset or liability. This results in the fact that if rates change, the income tax expense using the balance sheet method will differ from the income tax expense calculated using the deferral method.
A comparative analysis of the content of these two methods shows that the amounts of temporary differences determined by the deferral method and the amounts of temporary differences determined by the balance sheet method are almost always equal. Consequently, if income tax rates do not change, then the results of calculations using the two methods under consideration will almost always coincide. The only exception is when temporary differences arise when applying the balance sheet method, but would not arise if using the deferral method. An example would be a situation where the difference arises due to a change in the carrying amount of an asset that is not recognized in the income and expense accounts.
The implementation of the idea of ​​deferred taxes leads to the emergence in financial statements of such special types of assets and liabilities as deferred tax liabilities and deferred tax assets. For each type of asset and liability, a difference is determined, called a temporary difference. It can be taxable or deductible.
The temporary difference affects the adjustment of the accounting financial result of the reporting period when calculating the value of the tax base, at the same time it reveals differences in the accounting and tax estimates of a certain asset or liability, that is, it is reflected simultaneously on dynamic and static objects.
So, tax temporary differences can be determined through dynamic objects - income and expenses: a temporary difference arises when any income or expense in the current period is recognized according to one type of accounting (accounting or tax), but is not recognized in another, and is restored in the period when this income or expense is recognized in another type of accounting (deferral method).
Tax temporary differences can also be determined through static objects - assets and liabilities: a temporary difference arises when the assessment of an asset or liability does not coincide in accounting and tax accounting. The settlement of such a liability or the recovery of such an asset is reflected in an adjustment to income tax expense (balance sheet method).
As a result of a discrepancy between accounting and tax profits for the same reporting period, a tax effect arises. The use of deferred taxes in accounting and reporting makes it possible to neutralize the tax effect and correctly (from the standpoint of accounting standards) formulate the financial reporting indicators of the organization (see example 1).
A comparative analysis of national and international standards shows: PBU 18/02 determines the tax effect in the future from income and expenses taken into account in the reporting period. IFRS 12 assesses the tax effect of future income and expenses that will arise in the process of using existing assets (settling liabilities) in the future activities of the organization. For this purpose, IFRS 12 introduced two concepts - the tax base of an asset (liability) and the book value of an asset (liability), which are not used in PBU 18/02.
The book value of an asset is the value of this asset reflected in the balance sheet at the end of the reporting period.
The tax base of an asset is the value of the asset, which will be accepted for profit tax purposes in the future. The tax base shows the amount of potential expenses that will be taken into account when calculating taxable profit in future periods.
Example 2. An organization acquired a non-exclusive right to use a software product for 120,000 rubles. (excluding VAT), the period of use of which is not determined by the contract. Valuation for accounting and tax purposes is the same.
For accounting purposes, expenses for the purchase of a software product are recognized as deferred expenses with expenses written off over three years (36 months). In tax accounting, expenses are recognized in full in the reporting period (Table 4).
Let's determine the amount of deferred taxes by comparing the methods established by PBU 18/02 and IFRS 12.
Let's assume that there are no other differences in the organization's accounting and tax accounting. profit according to the organization’s profit and loss report amounted to 130,000 rubles. (Table 5). "
To calculate deferred taxes using the method established by IFRS 12, balance sheet data is required at the end of the reporting period (Table 6).
Data on the amounts of adjustment to deferred tax arising (repaid) in the reporting period are reflected in the income statement, where the amount of income tax expense from the accounting profit of the reporting period is calculated (Table 7).
Despite the differences in the calculation procedures and the order of reflection in the accounting accounts of the elements of income tax, the amount of income tax expense, deferred tax and current tax when using different methods the calculations are the same.
And yet, the balance sheet method, that is, the method provided for by IFRS 12, seems to be more effective, since it better and more reliably ensures the completeness of financial reporting data, while simultaneously simplifying the accounting process and reducing its complexity. Tax assets and liabilities can be calculated at a time at the reporting date when preparing the balance sheet.
The requirements of IFRS 12 and PBU 18/02 regarding the procedure for recording income taxes differ. According to PBU 18/02, the entire amount of conditional income tax is reflected in the debit of account 99 “Profits and losses” in correspondence with account 68 “Calculations for taxes and fees”. The amounts of permanent tax liabilities arising in the reporting period are reflected in the same way. Then operations for accounting for deferred taxes are reflected (Table 8).
IFRS 12 does not provide for the recognition of contingent income tax expense and permanent tax liabilities. Current tax and amounts of deferred taxes are reflected in the corresponding accounts - “Current income tax” and “Deferred taxes” in correspondence with the account “Income tax expenses” (Table 9).
As a result, the amount of current income tax immediately reduces accounting profit and is reflected as a liability to the budget, which is not subsequently adjusted. The amount of deferred taxes is also reflected in the “Profit and Loss” account in correspondence with the “Deferred Taxes” account, without affecting the budget account, where only the amount of current tax is recorded. As a result, the “Profit and Loss” account reflects the total amount of income tax expense, consisting of current flow for income tax and deferred income tax expense.
The Concept for the Development of Russian Accounting stipulates that in the future, IFRS will receive legislative recognition in Russia and will be included in accounting regulations.

Table No. 6

Calculation of deferred tax for XXX1 - XXXZ years. method established by IFRS 12, rub.

Table No. 7

Calculation of current income tax for XXX1 - XXXZ years, rub.

* See table. 6

Table No. 8

Tax accounting according to PBU 18/02

Table No. 9

Tax accounting according to IFRS 12

Meanwhile, there is a widespread belief among Russian accountants that international financial reporting standards are more complex than Russian accounting rules. However, a comparative analysis of IFRS 12 and PBU 18/02 shows that using IFRS 12 when calculating income taxes is much simpler and more efficient. In addition, the application of PBU 18/02 and IFRS 12 almost always leads to the same results. Many domestic experts believe that the procedure for accounting for income tax expenses provided for by IFRS 12 is more convenient, since it does not require accounting for permanent tax liabilities, and also establishes a more correct procedure for accounting for income tax expenses, providing a more complete accounting of temporary differences and changes in tax rates .

Literature

1. Tax code Russian Federation.
2. Concept for the development of accounting and reporting in the Russian Federation for the medium term: Approved by Order of the Ministry of Finance of the Russian Federation dated July 1, 2004 No. 180.
3. Accounting regulations “Accounting for income tax calculations” PBU 18/02: Approved. By Order of the Ministry of Finance of Russia dated November 19, 2002 No. 114n.
4. Sukharev I.R., Sukhareva O.A. Implementation of PBU 18/02 norms using the balance sheet method // Financial and accounting consultations. 2006. No. 2.
5. Chipurenko E. IFRS 12: Features of the method of calculating deferred taxes // Financial newspaper. 2005. No. 1.

Planning in management accounting is the formation of a set of actions and events that must be performed or occur in the future. The most detailed result is the budget. The process of creating and using a budget occurs in several stages, which we will discuss in more detail in our article.

Preparation of data for budgeting

The basis for successful planning in management accounting is the availability of reliable and detailed accounting information for completed periods. For these purposes, management accounting is introduced at the managed enterprise. Usually on the basis of regulated accounting, but the following options are also possible:

• maintaining additional management accounts, analytics and registers;
• separation of management accounting into a separate division.

The choice of accounting policies for management purposes and management accounting methods is completely left to the discretion of the enterprise. The main thing is that in the end the main task is accomplished - there is sufficiently complete and detailed data on previous periods for planning subsequent periods.

In addition, external data may be required for forecast planning: market analyses, marketing research, expert opinions, etc.

Determining the elements of the operating plan and creating a profit (loss) forecast

The purpose of the operating plan is to construct a forecast profit and loss statement for the future period of activity. Usually it is based on fiscal year. Depending on the specifics of the activity, the resulting forecast report can then be split into smaller ones billing periods, for example in the case of seasonal fluctuations in key performance indicators.

Planning in management accounting of a commercial organization begins with forecasting sales volume. This is where you will need, for the first time, external data on sales markets, marketing strategies, time (seasonal) and geographic factors, and similar ones. Sales volume is the first and mandatory element of the operating plan.

Revenue from sales is impossible without ensuring the sales themselves: purchases of goods, materials, and payment of wages. Expense items are the next elements of budgeting. However, depending on the type of activity of the company, the elements included in the forecast will be different.

For example:

• For a trading organization, the next step in planning will be to determine the planned volume of commodity purchases corresponding to the planned sales volume. Then you will need to determine the projected cost of goods (taking into account data on suppliers and manufacturers and the procurement market), as well as the volume of basic expenses, such as transportation, procurement and commercial. All these elements will fall into the budget of the trading company.
• At a manufacturing enterprise, the logical chain for selecting elements will be more extensive. The planned sales volume will require the inclusion of elements such as:
  • production plan - estimated production output in physical terms (directly determined by the planned sales volume);
  • inventory budget (includes planning the need for inventories based on the production plan and calculating the cost finished products, which will be made from these MPZ);
  • procurement budget (compiled on the basis of the inventory budget);
  • budget for labor costs (drawn up taking into account the production plan);
  • further significant elements of production costs (for example, for auxiliary production, general production and general economic needs).
• For many service sector enterprises, the main expense item will be wage qualified personnel. Accordingly, their second key element of the budget will be personnel costs.

The result should be a forecast profit and loss statement for shipments for the planned period.

Defining the elements of a financial plan and creating a cash flow and balance sheet forecast

Financial planning is necessary to understand the financial prospects of the enterprise, as well as to determine sources of financing for current and future activities- own or borrowed.

Financial planning in management accounting begins with an already known indicator of the planned sales volume. It is used to determine the element—forecast revenue.

The second required element is projected profit (this can also be taken from a set of operating budgets).

Further elements are the movement of special purpose funds and financing funds.

The purpose of financial planning is to build the optimal volume and composition of financial resources for the planned period.

Based on the financial plan data, the operating budget data can be adjusted. For example, if it is decided to attract credit funds for forecasted purchases, it will be necessary to adjust the planned indicators by the amount of bank interest.

Based on the results of financial planning, the 2nd forecast report is built - the cash flow statement (CFT). It will show planned inflows and outflows of cash flows for planned operating activities.

To better understand the structure and purpose of the report, you can also study the article.

Having a ready-made profit and loss statement and DDS, you can create a forecast balance at the end of the planning period. This is the 3rd main budget planning document. Based on the data obtained, one can draw conclusions about how the implementation of the management plan will affect the financial condition of the enterprise.

Note! Planning for next year usually carried out before the completion of the current one, in advance. And to correctly build a forecast balance, the final input indicators of the period also have to be planned. For example, when preparing the budget for 2017 in November 2016, you will need to estimate the values ​​of the balance sheet lines as of December 31, 2016.

Tax planning

Tax planning on the one hand is one of the necessary aspects planning in management accounting, and on the other hand, it stands somewhat apart from the rest.

The results of settlements with the state budget must necessarily find their place both operationally and financially. At the same time, a significant part of tax expenditures is not subject to internal management.

In this regard, management functions for this element usually come down to identifying and using available legal ways to reduce tax payments, as well as implementing 2 simple principles when making forecasts:

• pay the minimum required amount of tax;
• pay the tax on the last day of the deadline established for payment.

More about tax planning

Accounting "plan - fact"

So, as a result of planning, a set of forecast reports (budgets) was obtained in a summary for the enterprise for the year. For use in the workflow, it is more convenient to divide report data into smaller periods (for example, a quarter or a month) and adapt it depending on the adopted management strategy. Thus, costs for management purposes in accounting can be grouped:

• by place of origin (division);
• carrier (unit of finished product);
• type of expense;
• responsibility center (an element of the organizational structure of an enterprise headed by a responsible person who controls income, expenses and financing for this element).

Consequently, for operational control of costs, it will be more convenient to present budget data in the same grouping in which these costs are taken into account.

For example, if costs are grouped by place of origin (shop 1, shop 2, shop 3) and a total of 1,000,000 rubles in costs are planned for January in the general budget, then for the work plan it is advisable to distribute costs across shops. That is, the working production budget will be presented in a breakdown.

Plan (January):

• workshop 1 - 400,000 rubles;
• workshop 2 - 300,000 rubles;
• workshop 3 - 300,000 rub.

Based on the results of January, the following accounting picture was obtained.

Fact (January):

• workshop 1 - 400,000 rubles;
• workshop 2 - 300,000 rubles;
• workshop 3 - 350,000 rub.

This gives management a reason to pay attention to workshop 3 and find out that the costs are 50,000 rubles. exceeding the budget means damaged products (defects) as a result of equipment breakdown. The repair of this equipment is planned in the annual budget, but for June. That is, management must make a decision: either repair equipment in February and raise borrowed funds for this (since there are no own funds for this purpose in this month), or bear the risk of additional production losses from February to May.

In any case, this situation is an example of an error planning in management accounting: being too carried away with optimizing financial flows (having planned repairs for a period when they would have their own funds for this), specialists incorrectly assessed the physical need for repairs as soon as possible.

The error must be taken into account in the future.

Important! If management planning at an enterprise has been carried out for more than a year, then it is the “plan-fact” data for previous periods that becomes the best basis for further planning.

Results

So, planning in management accounting is the most important task of any enterprise. It should be borne in mind that the article provides a fairly simplified description for a general understanding of the process. In practice, everything is larger, more complex and more interesting.

If you look at the shelf in a bookstore dedicated to management accounting, the bulk of the literature consists of the works of American authors. You can find a lot of interesting and useful examples in them, as well as many answers to a variety of questions. Except, perhaps, one thing - how to take into account VAT in management accounting? American authors do not pay attention to this issue simply because in the States there is no VAT as a tax!

There is VAT in Belarus, but different companies have different attitudes towards it in management accounting. Someone takes into account everything (both income and expenses) with VAT. Someone - on the contrary, everything is without VAT. There are also exotic practices of accounting for income without VAT, and inventory - with VAT. In general, everyone goes crazy in their own way. We invited you to comment on this problem Vladimir Soskin, creator of the management accounting studio “Optimal Solutions and Technologies”.

How to reflect VAT in accounting is prescribed in regulations. But what is VAT in management accounting? What should a businessman know about this tax and how to correctly reflect it in internal reporting?

The most important thing to understand is that VAT is initially state money. Ultimately, VAT is paid by the final buyer - an individual, and all turnover in the calculation and payment of VAT in companies is needed only in order to withdraw VAT from companies in the process of creating added value. Precisely because VAT is not the company’s money, including VAT in the cost of inventories, fixed assets, income, and expenses in management accounting is usually a mistake (except for certain specific cases).

Let's remember the standard scheme of mutual settlements with the state for VAT:

1. At the time of sale (sale) of services or goods to the buyer (legal entity or individual), the company includes in the price the amount of VAT (VAT rate * cost of services or goods without VAT). In fact, at this moment the company's debt to the state arises (in accounting this is called VAT accrual).

2. Upon receipt of goods and services, a company debt arises to the supplier in the amount of the cost of services/goods + VAT. The cost of services/products (excluding VAT) can be both company expenses and inventory or fixed assets. And the state owes the amount of VAT to the company (in accounting - VAT is deductible).

3. If goods are imported (supplied), customs VAT is paid not to the supplier, but directly to the state. The state owes this amount to the company at the time of registration of the customs declaration (similar to point 2 - VAT deductible).

4.When calculating the amount of VAT that must be paid to the state after the period has passed, the calculation is quite simple:

Amount of VAT payable = amount of VAT debt with the state at the beginning of the period + VAT on sales for the period - VAT on materials and services received for the period.

The period can be a quarter or a month.

In which reports and how should VAT be reflected?

VAT generally affects only 2 parts of the financial picture:

1.Cash flows. The client paid part of the money for the sold products - it already contains 20% of the state’s money. We paid the supplier for the goods on the territory of Belarus - we gave 20% of this amount to the state.

2.Debts. At any given time, either the company owes the state VAT, or the state owes the company VAT. This is due to the fact that some time passes from the moment the obligation to the state for VAT arises until the moment of payment, during which time new transactions occur that affect the amount of VAT.

Based on what VAT affects, we can draw simple conclusions:

.Cash flow report: VAT significantly affects cash flows, and to correctly assess the situation it is good to be able to separate it out separately.

.Gains and losses report: VAT does not affect profits and losses and therefore should not affect or be reflected in this report.

.Balance sheet (assets, liabilities, capital): VAT should be allocated only to the extent of how much the company owes to the state or vice versa.

So, income and expenses are taken into account without VAT. But current VAT legislation provides for a large number of exceptions and features. Have you encountered atypical situations in your practice in which it was necessary to make separate decisions on accounting methods?

Special situations include the following:

1.Taxation systems without VAT (for example, a simplified taxation system without paying VAT), in which VAT is not charged on sales.

2. Special goods and services for which VAT is not charged or is charged at an incomplete rate (socially significant, medical goods and others).

3. Sales for export, for which VAT is not charged.

4. Individual benefits (more than 50% of disabled employees and others).

What could be the consequences for a businessman of incorrectly reflecting VAT in management accounting?

First of all, on the ability to manage the situation with financial flows. Without understanding the reasons for changes, it is extremely difficult to manage them. But there may be other problems when the financial picture does not correspond to reality in terms of VAT accounting. Typical consequences of incorrectly recording VAT in management accounting:

1. Incorrect choice of service provider or product.

A case from our practice. The company maintains management accounting of costs including VAT. The company is engaged in custom production of products and actively uses third-party carriers for delivery. In most cases, transportation is carried out under one-time agreements with carriers, since it is difficult to build constant flows of goods (large range, inconsistent demand from customers). The logistician is motivated to minimize the cost of transportation, therefore, as a rule, the services of individual entrepreneurs (working without VAT) are used, which, other things being equal, can offer a cost 20% less than the services of large companies (working with VAT). The result is that the company actually incurs more expenses than it could (given that the cost of transportation is the cost without VAT, and the company can offset the amount of VAT when calculating VAT for the quarter).

2. Uncontrollable and incomprehensible financial flows for the company’s responsible persons with a significant reduction in warehouse stocks.

A case from our practice: Auto center in Russia. Management accounting of inventories and costs is carried out with VAT. Since the auto center was opened only a few years ago, car sales are still growing and, accordingly, inventory is growing. At the beginning of the crisis in August 2008, there were cars in warehouses for a total amount (including VAT) of about 6,000,000 usd. Due to the fact that the crisis primarily caused a serious liquidity shortage in banking system, lending has practically ceased (both legal and individuals). Due to the lack of lending to legal entities, the auto center is experiencing serious problems with working capital, while car sales are falling significantly due to the inability of individuals to obtain a loan to purchase a car. The management of the auto center makes a logical decision in the situation described to sell cars at cost (in Russian rubles). At the same time, the auto center paid underestimated VAT amounts for many years in a row, since the VAT deduction on purchased cars (of which there were always more than sold) minimized the VAT arising from the sale of cars. In a situation where car purchases have been temporarily suspended, when selling a car, it becomes necessary to pay VAT on the entire sale amount, but VAT is no longer deductible. And when the warehouse is sold at one time, the auto center owes the state 6,000,000*18/118 ~= 915,000 usd. Which, for obvious reasons, are not available, because... it is necessary to pay off payments to suppliers and close loans to banks. As a result, the auto center was on the verge of bankruptcy, but due to a combination of circumstances, it still managed to fulfill its obligations to the state. The most unpleasant thing for management at that moment was the incomprehensibility and, accordingly, uncontrollability and unpredictability of the situation with VAT.

3. Incorrect assessment of the cost of construction and subsequent operating activities.

A case from our practice: The company keeps records of revenue, costs, warehouses, real estate with VAT. Until recently, VAT that arose during the construction of capital buildings could be offset (deducted and not pay VAT on sales) only after the completion of construction. Accordingly, at the construction planning stage, the company provides the necessary financing, taking into account the amounts of VAT that will be paid in the prices of materials and in the services of builders. At the financing planning stage, this is completely logical, because VAT on the price will have to be paid first, and it will be possible to return it only after the completion of construction and registration of the object. However, when construction is completed and a new retail facility is opened, economic nonsense arises - VAT on sales is simply not paid for several years (until the VAT payable becomes more than the VAT paid to suppliers during the construction stage). Responsible for the construction and operational activities of the facility different people(managers). And the new facility manager does not understand accounting and focuses only on management accounting data, where relations with the state regarding VAT are not separately highlighted. In a situation where he does not understand why VAT is not paid, he does not know that at the beginning of operating activities the company had a serious asset (in the form of a state debt to the company for VAT), and that sooner or later this asset in the form of VAT on construction will end, he just gets used to the idea that he doesn’t have to pay VAT at all. From this assumption, all financial plans, payback periods for the facility, financial indicators and motivation of employees (including the director himself) are drawn up. There comes a time when VAT already needs to be paid (VAT deductions for construction have ended), and no one is ready for this. And a lot of problems arise: the director has tense conversations with the owners (who are not happy that financial indicators are not being met and they need to pay “some kind of incomprehensible tax that never happened”), the chief accountant receives a scolding from the director (“are you on the moon?” what kind of stupid calculations do you have that such huge amounts of money arise to be paid, this has never happened before”). As a result, one of the employees, under pressure from higher management, may violate the law and falsify reporting, which for the company is fraught with big problems with the inspection authorities.

In the Russian practice of management accounting and reporting, there are 2 main approaches to accounting for indirect taxes:
1. Accounting for indirect taxes is carried out in accordance with the requirements of Russian accounting standards (RAS) and international standards financial statements(IFRS). With this approach, the amounts of indirect taxes presented by suppliers and contractors, and the amounts of indirect taxes on sales payable to the budget, do not in any way affect the company’s income and expenses (except in certain cases) and are taken into account as part of assets or debt to the budget as in accounting, so and in management balance.
2. Indirect taxes imposed by suppliers and contractors are taken into account as expenses, capital investments, the cost of inventory, the amount of taxes accrued for payment to the budget when selling goods, works, services do not reduce the amount of revenue from sales. In this case, the amounts of indirect taxes subject to payment to the budget are taken into account as expenses when paying these taxes, or when they are calculated monthly.
The first approach ensures the unity of management and financial accounting, thereby simplifying the accounting process, the reporting process, and determining a more correct financial result. At the same time, many business owners and managers require the preparation of management reporting in their companies, which includes in income and expenses the amounts payable and accepted for deduction of value added tax (VAT), and, therefore, accounting in accordance with the second approach. They see the main advantages of this approach as follows:
1. Very often, the owner and manager of a business are interested in the deviation of the amount of net operating cash flow received (the difference between the inflow and outflow of cash from operating activities) from the amount of profit received. As a rule, a management report on income and expenses (Profite and Loss), in contrast from accounting The profit and loss report contains more detailed information about the company’s income and expenses in the context of the economic classification of income and expenses adopted in the organization, the structural divisions responsible for them, financial responsibility centers (FRC), etc. The management report on cash flow (Cash Flow) contains the same deep detail. A simple comparison of income and expenses and cash inflows and outflows in terms of the classification adopted by the company will allow the manager (owner) to immediately understand how and where the difference between profit and the amount of net operating cash flow occurred. For example, seeing the difference between the revenue from the sale of product A in division B and the receipt of funds from its sale in this division, the manager (owner) will immediately pay attention to the growth accounts receivable in this division (of course, management reporting should include a report on the differences between PL and CF). But the situation could be worse, when a not very responsible accountant did not take into account certain expenses (didn't check provision of documents, spent them in a different period, etc.), which is why the profit in the report was overstated; in this case, the comparison report of PL and CF is an additional tool for the financial director to self-monitor the correctness of the preparation of the income and expense report. It may be argued that the standard indirect cash flow statement also compares a company's profit to its net operating cash flow. Not really. Of course, in the cash flow statement compiled by the indirect method, we will see an increase in accounts receivable, but in order to understand where and due to what it increases the most, we will need to conduct an additional analysis of accounts receivable (I will make a reservation, an analysis of accounts receivable and accounts payable, inventory balances must definitely be carried out, I’m only saying now about efficiency identifying such deviations).
2. Maintaining management accounting for income and expenses including VAT provides users of such accounting with not only information about assets and obligations company, but also about “deferred VAT liabilities” that the company will have when selling assets.
3. Management accounting is inextricably linked with planning, economic analysis of the company’s activities and various its divisions, determination of key performance indicators of these units (KPI). Thus, when setting tasks for the sales department, the amount for which products should be sold in a given period and the amount of cash from the sale of these products to be received in this period are determined. Often, sales department performance indicators depend on the difference between the selling price and the cost of production, as well as selling expenses. To ensure greater transparency of such indicators, the company needs to account for income and expenses including VAT. Of course, in this case the picture of the company’s profit and individual profits may be distorted. its divisions on the amount of VAT payable to the budget, as well as the amount of VAT underpaid to the budget due to an increase in non-current and current assets (or overpaid due to their decrease). This requires additional management accounting operations to make the KPI indicators of the company's divisions reflect the real profit that these divisions bring. For example, I developed such operations in my company
4. Maintaining management accounting with VAT provides the opportunity to evaluate assets at their value including VAT, i.e. at the actual cost paid upon their acquisition (creation).
5. Maintaining management accounting with VAT allows you to better manage the company’s capital investments and expenses, and the costs of paying VAT. For example, when planning large capital investments, company management must keep in mind that real costs will be subject to VAT, and the VAT amount itself will be returned from the budget only three months after submitting the tax return. Often there is a situation when the VAT accrued for payment to the budget for the main operating activities is “eaten up” by the tax that is subject to reimbursement from the budget as a result of capital investments. In this case, companies that maintain only traditional accounting overestimate the net cash flow from operating activities in the CF report. In order to avoid this, it is necessary to maintain not only separate accounting of operating and financial activities, but also separate accounting of VAT received for reimbursement or payment from operating and financial activities.