Accounting financial accounting. Formation and accounting of reserves (the most important)

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Accounting financial accounting. Formation and accounting of reserves (the most important)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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79. FORMATION AND ACCOUNTING OF RESERVES

Reserves are created to clarify the assessment of individual accounting items and cover future expenses.

Provisions for depreciation of material assets are accounted for on account 14 of the same name, which is intended to reflect the reserves created for a decrease in market value for each unit of inventories (raw materials, materials, fuel, work in progress, finished products, goods, etc.) by the amount of the difference between the current value and the actual cost of inventories, if the latter is higher than the current market value.

The reserve is created at the expense of the organization's income. In this case, the following accounting entry is made: Dt 91, Kt 14. Analytical accounting for account 14 is kept for each reserve separately, as well as for types and (or) groups of reserves.

Allowance for doubtful debts (account 63) are created at the expense of the organization's income. Doubtful debt is the accounts receivable of the organization and citizens, which is not repaid within the terms established by the contracts, is not secured by appropriate guarantees (sureties). Reserves for doubtful debts are recommended to be created within a year after the inventory and written justification of the organization's receivables. Such justification may be materials of correspondence with debtors.

The amount of the reserve is determined separately for each doubtful debt, depending on the financial condition (solvency) of the debtor and the assessment of the probability of repaying the debt in full or in part.

The creation of a reserve for doubtful debts is reflected in the accounting entry: Dt 91, Kt 63. When writing off unclaimed debts previously recognized by the organization as doubtful, an entry is made: Dt 63, Kt 62. Analytical accounting for reserves for doubtful debts is carried out according to each debt for which a provision has been created.

According to the Regulation on accounting and financial reporting (clause 45) allowance for depreciation of investments in securities is created only for shares traded on the stock exchange, the quotation of which is regularly published. These reserves are created at the expense of the organization's income against the potential impairment of the organization's investments in the shares of other organizations. Securities are reflected in the assets of the balance sheet at their net value less the created reserve on account 58 "Financial investments". The formation of reserves for the depreciation of investments in securities occurs on the credit of passive account 59 "Reserves for the depreciation of investments in securities", and the decrease - on the debit of the said account.

The formation of the reserve is carried out at the expense of the organization's income: Dt 91, Kt 59.

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