Depreciation premium - what is it?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Almost every enterprise has fixed assets (OS). They have a tendency to wear out. According to PBU rules, fixed assets are recorded, and depreciation is charged on them.

Depreciation charges

These are the amounts used to compensate for the depreciation of the OS. They are included in distribution or production costs.

Depreciation charges are amounts calculated on the basis of the book value of the relevant objects and rates. The norm is the annual percentage of compensation for the cost of the worn out part of the OS.

Property groups

They are formed depending on the useful life of the objects:

• I group - 1-2 years old;
• II - 2-3;
• III - 3-5 years old;
• IV – 5-7;
• V – 7-10;
• VI – 10-15;
• VII – 15-20;
• VIII – 20-25;
• IX – 25-30;
• X - over 30 years.

What is the depreciation premium on fixed assets?

This term is not defined in the legislation. However, accountants and economists quite actively use the concept in their activities.

The taxpayer can include in the costs taken into account in the reportingperiod (depending on the tax regime), the cost of capital investments in fixed assets, that is, the costs that the company can recognize at a time. This "benefit" is the depreciation premium. Accrual can be made, including for the completion, reconstruction, modernization of the facility.

Restrictions

There are several.

Firstly, the depreciation bonus cannot be applied to objects received free of charge. The corresponding rule fixes the 9th paragraph 258 of the article of the Tax Code.

Secondly, the maximum depreciation premium has been set. For OS included in groups I-II and VIII-X, it is 10%, and for other objects (groups III-VII) - 30% (previously it was 10%).

The indicated indicators are used in the creation, partial liquidation, acquisition, retrofitting, technical re-equipment, etc.

Recovery

It is produced during the implementation before the expiration of 5 years from the date of commissioning of the OS. The restoration of the depreciation bonus is, in simple terms, the inclusion of its amount in income. The corresponding requirement is set out in par. 4 9 paragraph 258 of Article NK.

Both 10 and 30 percent of any expenses are subject to recovery. This procedure is not provided for other methods of disposal.

Transitional provisions

New version of Article 258 of the Tax Code came into force in 2009

According to par. 2 3 of paragraph 272 of Article of the Code, the depreciation bonus is the amount that is recognized in the costs of that period, inwhich the accrual of depreciation of the objects in which capital investments were made began.

From this it follows that when acquiring / creating an object, a 30% premium is applied to funds put into operation since December 2008. can be used if the original price of upgraded objects changes after Jan 1. 2009

However, based on the provisions of paragraph 10 of paragraph 9 of Article FZ No. 224, the provisions of the new edition of Art. 258 should be applied to fixed assets put into operation since January 2008. Accordingly, accountants had a question: should a depreciation bonus be included in income if an object acquired and put into operation in 2008 was sold in the same year?

First, the Ministry of Finance explained that it was necessary to restore the premium. However, a different opinion was subsequently expressed. As a result, the following position was adopted.

When realizing before the entry into force of the new provision on the mandatory restoration of the premium (that is, before January 1, 2009) of the fixed assets acquired in 2008, the payer should not include its amount in income. This conclusion is formulated on the basis of paragraph 2 5 of Article TC, according to which, legislative acts on taxes and fees, fixing new obligations or worsening the situation of a business entity in any other way, do not have retroactive effect.

It is worth saying that in the case of sale after 01.01.2009 of the property put into operation on January 1, 2008, the depreciation premium must berestore.

Practical application

Payers can apply the premium regardless of how depreciation is calculated.

If the straight-line method is used, the original cost of the item is reduced by the depreciation bonus. This cost is taken as the basis for calculating monthly depreciation in tax accounting.

If an enterprise uses a non-linear method, fixed assets after commissioning are included (at their original cost, reduced by a premium) in the appropriate group (subgroup).

Example

For clarity, let's take a conditional company - CJSC "Ivan". The initial data is as follows:

• Depreciation is calculated using a non-linear method.
• With respect to OS III-VII gr. 30 percent premium applies.
• In August 2016, the company bought and put into operation equipment included in the seventh group. The initial cost of the OS is 1 million rubles.

Now let's calculate the depreciation bonus. At the end of 9 months 2016, the accountant of the enterprise will take into account the following amount as part of the costs:

1 million rubles x 30%=300 thousand rubles

The rest of the cost of equipment (1 million rubles - 300 thousand rubles=700 thousand rubles) should be included in the total balance sheet of Group VII from September 1, 2016

Should the use of a premium be reflected in financial policy?

Tax specialists and financiers believe that if an enterprise uses a "benefits", then it must be fixed in the accounting policy. Correspondingthe conclusion is present in the Letters of the Ministry of Finance and the Federal Migration Service.

Arbitration courts take a different position. In particular, they believe that the company can use the depreciation bonus and this fact should not be fixed in the accounting policy.

Lawyers, in turn, recommend reflecting the decision on the use of "benefits" in order to avoid conflicts with the Federal Tax Service.

Consequences of application

Depreciation bonus cannot be used in accounting. In tax accounting, accordingly, in the month of the beginning of the calculation of the amounts for the depreciation of the object, a larger expense is formed. There is a temporary taxable difference between the accounts. It results in a DTL (deferred tax liability).

From the second month of calculating depreciation amounts, tax accounting expenses will be less than accounting expenses. This is due to the fact that the amount of monthly depreciation will be higher, since the calculation is carried out at the initial cost without taking into account the premium.

Accordingly, from the second month, the temporary difference will decrease, and IT will be repaid.

Features of reflection

Consider postings with a depreciation bonus. Let's take a conditional enterprise LLC "Antey". The initial data is as follows:

• In March 2016, the enterprise purchased and put into operation an OS included in Group III.
• The cost of the object is 1 million 200 thousand rubles. (excluding VAT).
• Useful life – 60 months. (5 years).
• Expenses and incomes in the enterprisedetermined on an accrual basis.
• In tax accounting, a 30% premium is applied to the fixed assets of groups III-VII.
• Depreciation is calculated using the straight-line method in both tax and accounting records.

In March 2016, the accountant makes entries:

• db ch. 08 subac. "Acquisition of OS" Kd sch. 60 - 1,200,000 - purchase of a fixed asset is taken into account;
• db ch. 01 subaccount "Own OS" Cd sch. 08 subac. "Acquisition of fixed assets" - 1,200,000 - reflects the commissioning of fixed assets.

Accounting for the depreciation bonus will be made in April. The tax accounting will reflect the amount of 360 thousand rubles. (1 million 200 thousand rubles x 30%). Monthly depreciation will be:

(1 million 200 thousand rubles - 360 thousand rubles) / 60 months=14 thousand rubles/month

The total expense in April in tax accounting will be:

360 thousand rubles + 14 thousand rubles=374 thousand rubles

A time difference appears between accounts. It is:

374 thousand rubles - 20 thousand rubles.=354 thousand rubles.

She, in turn, leads to the emergence of IT:

354 thousand rubles x 20%=70 800.

Postings in April should be as follows:

• db ch. 20 cd sc. 02 - 20 thousand rubles - reflects the depreciation of fixed assets;
• db ch. 68 subaccounts "Calculations for income tax" Kd c. 77 - 70 800 rubles - IT is taken into account.

In May and subsequent months, throughout the entire period of useful operation of the facility, the expense in accounting will be higher (20 thousand rubles > 14 thousand rubles). In other words, there will berepayment of the temporary difference for 6 thousand rubles. Accordingly, IT decreases by 1200 rubles. (6 thousand rubles x 20%).

The wiring should be like this:

• db ch. 20 cd sc. 02 - 20 thousand rubles - accrued depreciation on fixed assets;
• db ch. 77 Cd count. 68 subst. "Calculations for income tax" - 1200 rubles. - partial repayment of IT is taken into account.

Difficulties with bonus recovery

Questions from accountants arise due to the fact that neither in para. 4 9 of paragraph 258 of Article TC, nor in other norms of Chapter 25 of the Code, it is not said when it is necessary to restore the bonus: in the period of its use or the implementation of the fixed assets.

According to the provisions of sub. 5 paragraph 4 271 of the article, receipts in the form of amounts of the restored reserve and other similar incomes must be reflected on the last day of the tax (reporting) period in which they are actually restored. The Ministry of Finance explained that the depreciation bonus included in the costs on the basis of par. 2 9 points of art. 258 Tax Code are included in the base in the period in which the OS was implemented.

Accountants are also interested in the following questions: does the inclusion of a premium in income indicate that the company actually loses this amount and cannot take into account 10% or 30% of the original price of the object in costs? Can the payer, having restored the premium, reduce the proceeds from the sale of funds by the same amount?

The Ministry of Finance explained that an economic entity does not have the right to recalculate the amount of depreciation for the object being sold for previous periods and its residual value. ATthis connection, on the basis of sub. 1 1 of paragraph 268 of Article TC, income from the sale of this property can only be reduced by the residual value.

Accordingly, the depreciation bonus, the amount of which is restored, is not reflected in the composition of expenses either in the period of its restoration or later.

Meanwhile, according to a number of experts, this position of the Ministry can be considered controversial. This is due to the following.

There is no direct ban on the re-inclusion of the premium amount in expenses in the legislation. As stated in sub. 1 of the first paragraph of Article 268 of the Tax Code, when selling a depreciable object, income is reduced by the residual value. It is the difference between the original price and the amount of depreciation that accrues during operation.

Initial cost includes the cost of acquisition, construction, delivery, manufacturing, bringing to a usable condition.

Next, you should refer to par. 3 9 of paragraph 258 of the article of the Tax Code. It notes that fixed assets, in respect of which the premium was applied, are included in groups at their original cost, minus no more than 10% or 30% (for the corresponding group). The amount of this interest is included in the costs of the tax period.

Nuances

It must be said that the above wording does not directly provide for a decrease in the value of the initial price of the fixed asset. It only stipulates a limitation on the inclusion of expenses for the subsequent depreciation of property.

In addition, we are talking aboutpercentage of the original price charged to costs. At the time of the sale of the object, these amounts are subject to recovery. Accordingly, an enterprise, by selling fixed assets and including the amount of the premium in income, can reduce the profit from the sale by the residual price of the object, calculated in such a way as if the premium had not been applied.

Timing problems

As stated in par. 4 9 of paragraph 258 of Article TC, it is necessary to restore the premium for the sale of fixed assets before the expiration of 5 years from the date of commissioning. Accountants are wondering if it is necessary to comply with this requirement for property included in groups I-III, if the depreciation is fully reimbursed by the date of sale?

Formally, the company will have to comply with the requirements of the Code, since there are no restrictions in this regard.

The Ministry of Finance explained that from 2009-01-01 the premium should be restored regardless of whether depreciation is compensated or not at the time of the implementation of the object.

Meanwhile, by including the amount in income, you can increase the residual value of such property by the amount of this premium. According to the rules of sub. 1 of the first paragraph of Article 268 of the Tax Code, it is possible to reduce the profit from the sale. However, the tax authorities may file claims against the organization in connection with such transactions.

Determining the residual price before the expiration of 5 years: an example

Take the following initial data:

• The initial cost of the object is 30 thousand rubles;
• capital costs are reflected in the period of commissioning of the fixed assets (10%) - 3 thousand rubles;
• depreciation amount up to the date of implementation - 7 thousand rubles.

The calculation will be as follows:

• Initial cost=30 thousand rubles. - 3 thousand rubles.=27 thousand rubles.
• Residual price=27 thousand rubles - 7 thousand rubles=20 thousand rubles

However, given the above, based on the provisions of the Tax Code, the residual value will be more:

30 thousand rubles - 7 thousand rubles=23 thousand rubles.

Next, suppose that the OS was sold at a price of 25 thousand rubles. In this case, the payer's income will be:

• 25 thousand rubles - 20 thousand rubles=5 thousand rubles (guided by the position of the Ministry of Finance).
• 25 thousand rubles - 23 thousand rubles=2 thousand rubles (taking into account the provisions of the law).

Conclusions

The residual value of a realizable object can thus be calculated as the difference between its original price (expenses without deducting a premium) and the residual value (amortization amounts excluding a premium).

It is this approach that is recommended for use in determining the payer's income from the sale of fixed assets. But in this case, claims from the IFTS are possible.