2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The topic “Material expenses” is probably one of the most entertaining in the field of finance. It closely echoes the laws of taxation, which attracts even more attention, since they should not only be studied, but simply useful to know. Speaking about the costs of material resources, we immediately imagine a large enterprise, in the production process of which we want to understand as soon as possible. Let's get started now.
Accounting for material costs
budget.
What does the legislation say about this
The composition of material costs is extremely clearly regulated by the Tax Code of the Russian Federation, in particular, Article 254, part 2. It states that the following expenses of the taxpayer belong to material costs:
- Expenses for the purchase of raw materials and materials that are useddirectly in production when performing a certain type of work or when providing various kinds of services.
- Funds for materials for packaging or other type of preparation of manufactured or sold goods, including pre-sales. Also, the costs for other needs related to the economic part: testing, quality and maintenance control, operation of fixed assets and other purposes.
- Expenses for tools, fixtures, inventory, instruments, laboratory equipment, overalls, all kinds of personal and collective protective equipment, as well as other types of property provided for by the legislation of the Russian Federation.
In addition to the above, the consumption of material resources includes: the purchase of components for installation work, semi-finished products for additional processing, funds for fuel, water and energy of all kinds, its generation, transformation and transfer, which provides for the entire technological process of production. As well as the costs of work performed by specialists of the organization of the taxpayer itself.
How to interpret this
All material resources entering the enterprise are taken into account in price terms. This includes all costs except for the cost of returnable packaging. If it is specified separately in the contract, it is taken into account at the price of possible use and without VAT, which is taken into account in a separate invoice. In addition, the amount of material costs does not include the price of returnable waste, which,according to technology, are formed during the production process and can be used later for commercial purposes.
Release of materials to production
For a more efficient launch of materials into production, limit-fence cards are used, which belong to the category of primary documentation. In order to include the cost of the materials used in the costs of the main production at specified intervals, their actual consumption is determined on the basis of these documents. It is important to know that at this stage it is necessary to reconcile, to find out whether the real and standard material costs correspond to each other.
Inventory Accounting
At large enterprises that use a wide range of materials in the production of several types of products, it is advisable to use standard or coefficient methods to write them off. This will allow not only to more accurately determine the cost of various types of manufactured products, but also to determine the discrepancies (overruns) of certain material assets. One of the recommendations is periodic inventories. Also, in the case of a long production cycle (for example, when purchased semi-finished products are used in several stages of the production process), it is necessary to keep an operational balance of the movement of parts in production, based on the principle “the more details, the better.”
Identification of discrepancies between standard and actual consumptionmaterials, as well as an analysis of the reasons for this situation will minimize costs, which will ultimately have a positive effect on the overall financial condition of the enterprise. And in the future, it will make it possible to competently build the entire production process, correctly conduct a pricing policy, and therefore competently take into account material costs, based on the experience gained.
Costs for tax purposes
It is also worth paying attention to Art. 261 part 2 of the Tax Code of the Russian Federation, according to which the material costs should include the funds used for the restoration of land resources and ongoing environmental activities. In addition, to account for losses from damage and shortages during storage or transportation of material and production stocks, funds, if they exceeded the allowable rate of natural losses established by the Government of the Russian Federation. The Code also includes technological losses that occurred during the production process or the same transportation. At the same time, such losses mean the loss of goods, works, services, which are due to the peculiarities of the production cycle, issues of movement, as well as the physical and chemical composition of the raw materials used in the work. When mining, working in quarries, and underground mining within mining enterprises, mining and preparation activities are included in fixed costs plus everything.
Important nuance
Taking into account the recommendations of the Ministry of Taxes and Duties, material costs can be taken into account withpurpose of taxation only after their payment. At the same time, the cost of materials and components should be written off as expenses immediately at the time of their transfer to the main production. There are no direct instructions for this in the Law, but, as practice shows, it is necessary to listen to the recommendations of the Ministry very carefully.
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