Revaluation of property, plant and equipment is necessary to bring their carrying amount in line with fair market prices. Let's see if it is necessary to do this, and find out what questions need to be answered in order to do everything right.
Why revalue property, plant and equipment
According to the current rules, fixed assets are accounted for in the balance sheet at their original cost, which cannot be changed except in cases of changes in the fixed asset itself: modernization or reconstruction, completion or retrofitting, partial liquidation. The only way to change the original cost without changing the asset itself is a revaluation.
In general, the purpose of a revaluation is for the balance sheet to reflect the fair market value of property, plant and equipment. Revaluation is a right, not an obligation of the organization. There are many reasons to exercise this right, namely:
- so that the reporting reflects the true indicators of financial dependence and the rate of return on capital used;
- to maintain sufficient funds in the business to replace assets at the end of their useful lives;
- to avoid inflating profits and excessive dividend payments resulting in depreciation calculated at historical cost;
- to show the fair market value of assets such as buildings, structures and land beneath them, which has increased significantly since their acquisition;
- to determine the amount of financing required for the reconstruction of fixed assets;
- to obtain the fair value of an individual asset or group of assets if sold, if merger or acquisition by another company ;
- to determine the value of shares during their public offering;
- if necessary, lending secured by fixed assets to increase the amount of collateral;
- to increase fixed capital and comply with the standards for its size for financial and credit institutions;
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Revaluation procedure
Since the cost of non-current assets often reaches very large amounts, revaluation must be approached with full responsibility.
First of all, it is necessary define the objectives of the revaluation and the composition of the underlying assets.
Then issue a revaluation order, in which to indicate specific types of property, structural units to which they belong and officials responsible for the safety of these objects and the revaluation. The same order establishes the composition of the commission and the timing of the beginning and completion of the assessment procedure.
Based on the order a commission is created, which should include representatives of production departments, technical services, accounting, as well as external technical specialists and expert appraisers.
The Commission, having established when and on what basis the facility was put into operation, its location and the moment of assessment, conducts technical examination of an asset... As a result, the technical condition of the object and the degree of its compliance with the technical conditions established for this type of property should be determined.
The next stage is determination of the fair (market) value of an asset, documents are collected justifying the new price, which are attached to the act.
All the information collected, that is, the result of the revaluation of fixed assets, is drawn up in the form revaluation act, to which, in addition to the act of the expert appraiser and other evidence of the new value, is attached, a list of technical documentation, on the basis of which the assessment of the state of the object was carried out.
Then the corresponding entry in the accounting card of this object, about which the accounting representative in the commission makes a note in the revaluation report. Upon completion of these procedures, the act is signed by all members of the commission and the chief accountant.
In the object accounting card the carrying amount is adjusted to the revaluation value, forming a replacement cost. After that, the accumulated depreciation deductions are recalculated.
Important features of revaluation
In addition to the reasons listed above for which it is worth making a revaluation, it is necessary to take into account other circumstances that are "on the other side of the scale" and can change the opinion about the advisability of revaluation of wasps. All these circumstances are directly or indirectly a consequence of the requirements of the legislation on accounting and taxes and fees.
The first circumstance is that once having made a decision to revalue an asset, it will have to be carried out regularly. The interval for the procedure is set by the organization itself based on the fact that the replacement cost will continue to correspond to the market price, but cannot be less than one year.
Second, a revaluation can only be made when the fair value can be measured reliably.
Third, there should be no selective revaluation. That is, when revaluing an individual item, the value of all items belonging to the same class of fixed assets, that is, having similar properties and nature of use, should be revised. Ideally, the procedure should be done in one day, if this is not possible, then in sequence within a short period of time.
For example, if a company has production facilities in different regions, then a selective revaluation will mean a change in the cost of specific equipment (boiler, heating system, central air conditioning system, etc.) in all places or a revaluation of all pieces of equipment, but only in one place. Such actions will lead to the fact that one part of homogeneous assets will be accounted for at replacement cost, and the other at their original value, and this is a gross violation of the principle of consistency.
Accounting for revaluation of property, plant and equipment and tax implications
The excess of the replacement value of fixed assets over their initial cost is accounted for in the subaccount “revaluation results” of the capital surplus accounts. According to the requirements of PBU 6/01, only after the sale of the revalued object, the additional capital is transferred to retained earnings. This means that prior to the disposal of the asset, the revaluation gain is not distributed as dividends.
There are important points to keep in mind when considering changes in value. Decrease in replacement cost relative to the original is charged to other expenses. The increase in the replacement cost upon further revaluations is charged to other income, but only until the moment when it again becomes equal to the original. Further excess will be attributed to additional capital.
If, however, later the replacement cost decreases again, this should be reflected as a decrease in capital surplus, but only until the time when the value after revaluation is equal to the original. Further reductions should again be accounted for as miscellaneous expenses.
The Tax Code recognizes the revaluation results only for the purpose of calculating property tax. For the calculation of VAT and income tax, only the initial cost and the depreciation calculated on the basis of it are relevant. Such differences lead to the appearance of temporary differences in the calculation of income tax (see also legal ways to optimize income tax).
Cost determination methods
In addition to the technical condition, which is determined by the revaluation commission, factors such as are important to determine the fair value:
- facility repair and maintenance policy;
- availability of spare parts in the future, foreign or domestic production;
- future demand for the product produced by the asset.
Indexing
The indexation method, that is, multiplying the book value of the property by a certain coefficient (index), is used to obtain the current value of assets. For example, a revaluation using this method was mandatory for enterprises of all forms of ownership in Russia as of January 1, 1994, and the indices were determined by a government decree issued the day before.
Comparative method
It consists in determining the current market price of the property by comparing it with current offers for sale and purchase and information on transactions with similar objects in this region. If the available data allows a representative sample to be made, then the market value is averaged over all objects and transactions selected for comparison. The replacement cost is calculated from the received average market price taking into account the remaining useful life. Despite the simplicity of this method, its application is not always possible, for example, if such data are not available for one reason or another.
conclusions
All items of property, plant and equipment can be accounted for both at historical cost and using the revaluation method. To conduct it or not, and if it is carried out, then for which groups of assets, the company decides on its own. It is most advisable to conduct regular revaluation of expensive objects with a long useful life. Property such as vehicles, furniture and equipment or office equipment is usually not overvalued.
Presentation of property, plant and equipment at their fair market value, on the one hand, provides more relevant information to the management and creditors of the organization, and on the other hand, the application of the revaluation model is more complex and expensive. In addition, it is not always possible to determine fair value with sufficient evidence to allow manipulation of accounting income.
The transition to the revaluation model should be carried out with sufficient regularity to ensure that the carrying amount does not differ materially from its fair value at each reporting date.
The tax consequences of the application of the revaluation of principal are the change in the amount of income tax and the
The intensity of the accountant's work directly depends on the date on the calendar. On the eve of the new year, it increases. And if the management of the company is mainly engaged in communication with business partners (congratulates and accepts congratulations on the upcoming holidays), employees of the accounting service are preparing for the end of the year. One of the necessary stages of work is the revaluation of fixed assets.
Revaluation of fixed assets in accounting.
According to clause 15 of PBU 6/01 "Accounting for fixed assets" a commercial organization may not more than once a year (at the end of the reporting year) revalue groups of similar fixed assets at the current (replacement) cost.
The current (replacement) cost of fixed assets is understood to mean the amount of money that must be paid by the organization on the date of the revaluation if it is necessary to replace any object.
When deciding on revaluation of such fixed assets, it should be borne in mind that subsequently they are revalued regularly so that the value of fixed assets at which they are reflected in accounting and reporting does not materially differ from the current (replacement) value.
Revaluation of an item of fixed assets is made by recalculating its initial value or current (replacement) value, if this item was revalued earlier, and the amount of depreciation accrued over the entire period of use of the item.
The results of the revaluation of fixed assets carried out as of the end of the reporting year shall be reflected in the accounting separately.
The amount of the revaluation of an item of fixed assets as a result of the revaluation is credited to the additional capital of the organization. The amount of revaluation of an item of fixed assets, equal to the amount of its depreciation carried out in previous reporting periods and referred to the financial result as other expenses, is credited to the financial result as other income.
Until 2011, the revaluation of fixed assets was carried out on the first day of the reporting year.
The amount of the depreciation of an item of property, plant and equipment as a result of the revaluation is included in the financial result as other expenses. The amount of the depreciation of an item of fixed assets is referred to a decrease in the additional capital of the organization formed by the amounts of the revaluation of this item carried out in previous reporting periods. The excess of the amount of the devaluation of the object over the amount of its revaluation included in the additional capital of the organization as a result of the revaluation carried out in previous reporting periods is charged to the financial result as other expenses.
Well, now we will “translate” the “normative” vocabulary into a simpler language. When writing this article, we will also rely on the provisions of IAS 16 "Fixed Assets" and Methodological guidelines for accounting fixed assets .
To overestimate or not is up to the accountant.
The first thing we will draw the attention of our readers to is that the revaluation of fixed assets is a voluntary matter. An entity should choose either a model for accounting for fixed assets at historical cost or a model for accounting at a revalued amount as its accounting policy and apply this policy to the entire group of similar items.
So, the decision on whether to revalue fixed assets at the end of the year or not is made by the accountant. Moreover, such a decision cannot be made off the bat. In order for the reporting to be reliable and consistently show the financial condition of the organization from one calendar year to another, the decision that the fixed assets will be revalued (if such a revaluation has not been previously carried out) can only be made in relation to the recently acquired fixed assets. Why? Suppose in 2003 the organization bought real estate. For obvious reasons, in 2015, the initial value reflected on the balance sheet does not correspond to its market price. Nevertheless, it is inappropriate to start overestimating it in 2015, despite the fact that this has not been done before.
Please note: when deciding on the revaluation of fixed assets, it should be borne in mind that in the future they are revalued regularly so that the cost of fixed assets, at which they are reflected in accounting and reporting, does not materially differ from the current (replacement) value.
Groups of homogeneous objects.
Let us explain what is meant by a group of homogeneous objects of fixed assets: this is a group of fixed assets that are similar in terms of their nature and nature of use in the activities of the enterprise, for example:
- land;
- building;
- cars and equipment;
- motor vehicles;
- furniture and built-in elements of engineering equipment;
- office equipment.
In a situation where a fixed asset has not been revalued before, but in the future the trade organization wants to do this, as it acquires the fixed asset, it must create new groups of similar fixed assets (for example, non-residential premises acquired after 2012, vehicles purchased after 2014, etc.) and re-evaluate these groups.
The frequency of revaluation is established by the accounting policy.
The frequency of revaluation is established by the accounting policy of the organization (revaluation cannot be carried out more often than once a year). In relation to different groups of homogeneous objects of fixed assets, different frequency of revaluation can be established. That is, its frequency depends on changes in the market value of fixed assets subject to revaluation. So, some groups of fixed assets can be revalued annually, others (if their market value undergoes minor changes) - once every 3 - 5 years.
If there have been significant events in the economic (political) sphere, for example, a sharp jump in the foreign exchange rate, high inflation in a specific segment, while the revaluation period has not yet arrived (suppose, according to the accounting policy, real estate objects are revalued once every five years), we consider that the revaluation should occur unscheduled - at the end of the year, in which there have been significant changes in the market value of the asset. And the reasons for the unscheduled revaluation should be reflected in the explanations to the financial statements.
If a revaluation of a separate item of fixed assets is carried out, then all other assets belonging to the same group of similar items of fixed assets as this asset are subject to revaluation.
But even if the time has come for the revaluation of a group of homogeneous objects of fixed assets, the accountant must analyze the feasibility of this step. And if the increase in the value of fixed assets is insignificant (the level of materiality for these purposes must be prescribed in the accounting policy for accounting), revaluation can be omitted. Thus, in clause 44 of the Methodological Guidelines for the accounting of fixed assets, two examples are presented.
Example 1
The cost of fixed assets, included in a homogeneous group of objects, at the end of 2014 - 1 million rubles. The current (replacement) cost of objects of this homogeneous group at the end of 2015 is 1.1 million rubles.
The results of the revaluation should be reflected in the accounting accounts and in the financial statements, since the resulting difference is significant ((1,000,000 - 1,100,000) rubles / 1,000,000 rubles).
Example 2
The cost of fixed assets, included in a homogeneous group of objects, at the end of 2014 - 1 million rubles. The current (replacement) cost of objects of this homogeneous group at the end of 2015 is 1.03 million rubles.
The revaluation decision is not taken - the resulting difference is not significant ((1,030,000 - 1,000,000) rubles / 1,000,000 rubles).
Revaluation method.
It is possible to overestimate groups of homogeneous objects of fixed assets at the current (replacement) cost (clause 43 of the Methodological Guidelines for Accounting for Fixed Assets):
- by indexing;
- by direct conversion at documented market prices.
For this, data on similar products obtained from manufacturing organizations, information on the price level available from state statistics bodies, trade inspections and organizations, information on the price level published in the media and special literature, an assessment of the bureau of technical inventory can be used , expert opinions on the current (replacement) value of fixed assets.
Preparatory work. Documenting.
In order to carry out the revaluation of fixed assets in the organization, preparatory work should be carried out to carry out the revaluation, in particular, to check the availability of fixed assets subject to revaluation (inventory).
The decision of the organization to conduct a revaluation at the end of the reporting year is drawn up by an appropriate administrative document, mandatory for all services of the organization that will be involved in the revaluation of fixed assets, and is accompanied by the preparation of a list of fixed assets subject to revaluation. The list contains at least the following information: the exact name of the asset, the date of purchase (construction, manufacture), the date of the object's acceptance for accounting.
Reflection of the revaluation results.
The results of the revaluation of fixed assets carried out as of the end of the reporting year are reflected in the accounting separately. That is, it is advisable to supplement the applied accounting accounts with sub-accounts or introduce separate sub-accounts, so that when forming the statement of account it is clear which entries were made for each revaluation. If the revaluation is carried out for the first time:
If the revaluation is repeated:
|
The procedure for reflecting the revaluation |
The procedure for reflecting markdowns |
|---|---|
|
The amount of revaluation of the fixed asset, equal to the amount of the markdown carried out in previous reporting periods and referred to the financial result as other expenses, is reflected in the credit of account 91, subaccount 91-1 "Other income" in correspondence with the debit of account 01 |
The amount of the depreciation of the fixed asset object is referred to a decrease in the additional capital of the organization formed from the sums of the revaluation of this object carried out in the previous reporting periods, and is reflected in accounting on the debit of account 83 and the credit of account 01. The excess of the amount of the devaluation of the object over the amount of its revaluation credited to the additional capital of the organization as a result of the revaluation carried out in previous reporting periods is reflected in the debit of account 91-1 in correspondence with the credit of account 01 |
The initial data for the revaluation of fixed assets are the initial value or the current (replacement) value (if this object was revalued earlier), according to which they are accounted for in accounting on the date of revaluation; the amount of depreciation accrued for the entire period of use of the object as of the specified date; documented data on the current (replacement) value of revalued fixed assets as of December 31 of the reporting year.
In addition to the fixed asset object, it is also necessary to revalue the amount of accrued depreciation (clause 46 of the Guidelines for accounting fixed assets): the revaluation of the fixed asset is made by recalculating its initial cost or current (replacement) value, if this object was revalued earlier, and the amount of depreciation accrued for all time of use of the object.
Paragraph 35 of IAS 16 proposes two options for recording a revaluation of PPE:
1. The original (replacement) cost is adjusted in accordance with the revaluation result. The amount of accumulated depreciation is adjusted separately.
2. Accumulated depreciation is deducted from the revalued amount of the asset. That is, the amount of the accumulated depreciation adjustment is part of the total increase or decrease in the asset value.
The Russian accounting rules do not specify exactly how to reflect in the accounting the results of the revaluation in terms of adjusting depreciation deductions. According to the majority of experts (and we are one of them), the first option should be applied: the revaluation results should affect both account 01 and account 02 "Depreciation of fixed assets". At the same time, the example given in clause 48 of the Methodological Instructions for the Accounting of Fixed Assets indirectly indicates that the second option is also possible - the revaluation results are reflected on account 01 on a collapsed basis. In the example below, we will consider both options.
Example 3
In 2013, the organization acquired a fixed asset worth RUB 600,000. The revaluation was carried out on December 31, 2014 (replacement cost - RUB 500,000) and December 31, 2015 (replacement cost - RUB 650,000). As of the date of the first revaluation, the amount of accrued depreciation is 196,000 rubles.
|
Indicator name |
Numerical indicator |
|---|---|
|
1st revaluation |
|
|
RUB 600,000 |
|
|
Current replacement cost of the fixed asset as of 12/31/2014 |
RUB 500,000 |
|
|
RUB 100,000 (600,000 - 500,000)
|
|
RUB 196,000 |
|
|
Conversion factor |
0.83 ((500,000 / 600,000) rubles) |
|
|
RUB 162 680 (196,000 rubles x 0.83) |
|
|
RUB 33,320 (196,000 - 162,680) |
|
2nd revaluation |
|
|
RUB 500,000 |
|
|
RUB 650,000 |
|
|
Revaluation amount |
RUB 150,000 (650,000 - 500,000) |
|
RUB 98,000 * |
|
|
RUB 260 680 (196,000 - 33,320 + 98,000) |
|
|
Conversion factor |
1.3 ((650,000 / 500,000) rubles) |
|
RUB 338 884 (260 680 rubles x 1.3) |
|
|
RUB 78,204 (338 884 - 260 680) |
|
* The annual amount of depreciation deductions after the revaluation is determined based on the current (replacement) cost of the fixed asset, that is, in 2015, the basis for determining the amount of depreciation was the cost of the fixed asset of 500,000 rubles.
|
the name of the operation |
Debit |
Credit |
Amount, rub. |
|---|---|---|---|
|
On 12/31/2014 |
|||
|
1st option |
|||
|
91-2 |
100 000 |
||
|
91-1 |
33 320 |
||
|
2nd option |
|||
|
The revaluation of the initial cost of the fixed asset was made ((100,000 - 33,320) rubles) |
91-2 |
66 680 |
|
|
As of 12/31/2015 |
|||
|
1st option |
|||
|
91-1 |
100 000 |
||
|
Revaluation of the fixed asset was made in excess of the markdown amount ((150,000 - 100,000) rubles) |
50 000 |
||
|
The revaluation of the amounts of accrued depreciation has been carried out within the amount of the markdown made earlier |
91-2 |
33 320 |
|
|
The amount of accrued depreciation was reassessed in excess of the amount of the markdown ((78 204 - 33 320) rub.) |
44 884 |
||
|
2nd option |
|||
|
An additional assessment of the value of the fixed asset was carried out within the amount of the markdown made earlier ((100,000 - 33,320) rubles) |
91-1 |
66 680 |
|
|
An additional assessment of the OS object has been made ((150,000 - 78,204 - 66,680) rubles) |
5 116 |
||
To confirm the expediency of applying the first option for revaluation accounting (that is, adjusting both account 01 and account 02), we will give the following argument: when using it, the value reflected after the revaluation on account 01 corresponds to the replacement value. In the second option, it will be different (we will give an example in the table). And although the reporting indicators in the case of applying the second option are reliable (the residual value of the fixed asset is identical), this creates certain inconveniences for the accountant.
|
According to the results |
1st accounting option |
2nd accounting option |
|---|---|---|
|
1st revaluation |
Debit 01 - 500,000 rubles. Credit 02 - 162 680 rubles. |
Debit 01 - 533 320 rubles. Credit 02 - 196,000 rubles. Residual value of the fixed asset - 337 320 rubles. |
|
2nd revaluation |
Debit 01 - 650,000 rubles. Credit 02 - 338 884 rubles. Residual value of the fixed asset - 311,116 rubles. |
Debit 01 - 605,116 rubles. Credit 02 - 294,000 rubles. Residual value of fixed assets - RUB 311,116 |
Disposal of the OS.
Upon disposal of an item of fixed assets, the amount of its revaluation is written off from the debit of the capital surplus account in correspondence with the credit of the organization's retained earnings account.
Example 4
In April 2012, a trade organization acquired (and accepted for accounting) non-residential premises for a store, located on the first floor of an apartment building, at a cost of RUB 1,800,000. The useful life is 361 months. In relation to the group of fixed assets "Real estate" the organization carries out a revaluation once every two years. The revaluation period is 2013 and 2015. The replacement cost of real estate in 2013 was 2,800,000 rubles, in 2015 - 2,600,000 rubles. In 2016, this property was sold for 2,500,000 rubles. (without VAT). To reflect the revaluation results, the first accounting option is applied.
|
Indicator name |
Numerical indicator |
|---|---|
|
1st revaluation |
|
|
The initial cost of an item of fixed assets |
RUB 1,800,000 |
|
Current replacement cost of the fixed asset as of 12/31/2013 |
RUB 2,800,000 |
|
The difference between the cost of the object, at which it was accounted for in accounting, and the current (replacement) cost as of the date of the first revaluation |
RUB 1,000,000 (2,800,000 - 1,800,000)
|
|
Accumulated amount of depreciation at the date of the first revaluation |
RUB 99,720 (RUB 1,800,000 / 361 months х 20 months) |
|
Conversion factor |
1.55 ((2,800,000 / 1,800,000) rubles) |
|
Restated depreciation amount |
RUB 154 566 (99 720 rubles x 1.55) |
|
Difference between the recalculated depreciation amount and the accumulated depreciation amount |
RUB 54 846 (154 566 - 99 720)
|
|
2nd revaluation |
|
|
The cost of this item at the date of the second revaluation |
RUB 2,800,000 |
|
Current (replacement) cost as a result of the second revaluation |
RUB 2,600,000 |
|
Markdown amount |
RUB 200,000 (2,800,000 - 2,600,000) |
|
Amount of accrued depreciation for the interrevaluation period |
RUB 186 144 (2 800 000 rubles / 361 months х 24 months) |
|
Total accumulated depreciation at the date of the second revaluation |
RUB 340,710 (154 566 + 186 144) |
|
Conversion factor |
0.9 ((2,600,000 / 2,800,000) rubles) |
|
Restated depreciation amount |
RUB 306 639 (340,710 rubles x 0.9) |
|
Difference between the recalculated depreciation amount and the accumulated depreciation amount |
RUB 34 071 (340 710 - 306 639) |
Since the amount of the markdown made on 12/31/2015 fits into the amount of the revaluation carried out earlier, accounts 01, 02, 83 are also affected in the accounting.
|
the name of the operation |
Debit |
Credit |
Amount, rub. |
|---|---|---|---|
|
As of 12/31/2013 |
|||
|
The revaluation of the initial cost of the fixed asset was made |
1 000 000 |
||
|
Revaluation of accrued depreciation was made |
54 846 |
||
|
As of 12/31/2015 |
|||
|
The revaluation of the initial cost of the fixed asset was made |
|||
As you know, the accounting of fixed assets is carried out by organizations in accordance with the accounting standard PBU 6/01. Moreover, the specified regulatory document of accounting legislation is applied in conjunction with the Methodological Guidelines for the Accounting of Fixed Assets, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 N 91n (hereinafter referred to as the Methodological Guidelines for Accounting for Fixed Assets).
Clause 15 of PBU 6/01 stipulates that commercial firms have the right to revalue their fixed assets no more than once a year (at the beginning of the reporting year). However, by providing companies with this opportunity, the accounting standard itself does not disclose the concept of revaluation. At the same time, it follows from the Methodological Guidelines for Accounting for Fixed Assets that the revaluation of fixed assets is understood as the process of determining the real value of fixed assets, carried out by bringing the initial cost of objects in accordance with their market prices and reproduction conditions at the date of revaluation.
In other words, in essence, it is a change in the initial value of the fixed asset object made by the decision of the company in connection with the dynamics of prices for the specified property.
Revaluation is made according to the current or, as it is also called, replacement value, which means the amount of money that the company will have to "lay out" on the date of the revaluation if it is necessary to replace any object with a new one.
Moreover, Methodological instructions for accounting for fixed assets to determine the current (replacement) cost of fixed assets recommend using:
- data on similar products received from manufacturers;
- information about the price level available from state statistics bodies, trade inspections and organizations;
- information about the price level published in the mass media and special literature;
- assessment of the bureau of technical inventory;
- expert opinions on the current (replacement) cost of fixed assets.
In the Letter of the Ministry of Economic Development of Russia dated August 13, 2009 N D06-2344, the issue of the absence of grounds for regulation by the legislation of the Russian Federation on the appraisal activity of the mechanism for determining the replacement cost when revaluing assets for the purposes of PBU 6/01 was considered. The Letter states that in accordance with Art. 3 of the Federal Law of July 29, 1998 N 135-FZ "On appraisal activities in the Russian Federation" as such means the professional activities of the subjects of appraisal activities aimed at establishing market or other value in relation to appraisal objects.
According to par. 2 clause 5 of the Federal valuation standard N 2 "The purpose of valuation and types of value (FSO N 2)", approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 N 255, in order to implement the provisions of Law N 135-FZ, when carrying out valuation activities, market , investment, liquidation and cadastral values. The concept of replacement cost is not enshrined in the legislation of the Russian Federation on appraisal activities.
At the same time, Art. 7 of Law No. 135-FZ, it is established that in the case of the use in a regulatory legal act of terms not provided for by Law No. 135-FZ or valuation standards that determine the type of value of the object of value "," real value "and others, the market value of this object is subject to establishment. However, it should be borne in mind that this rule applies to cases of mandatory assessment of the subject of assessment.
In turn, the revaluation of a group of similar objects of fixed assets at the current (replacement) cost in accordance with RAS 6/01 is not mandatory. Thus, the mechanism for determining the replacement cost when revaluing assets for the purposes provided for in PBU 6/01 is not regulated by the legislation of the Russian Federation on appraisal activities. Also, in the Letter under consideration, it is noted that the legislation of the Russian Federation does not prohibit legal entities from engaging third parties (third-party organizations) to provide consulting services for the revaluation of fixed assets. The regulation of consulting services is carried out by the norms of the Civil Code of the Russian Federation.
From a literal reading of the rule of clause 15 of PBU 6/01, it follows that revaluation is the right of the organization, and not an obligation, and therefore the organization independently decides whether it will revalue its fixed assets in the future or not.
It must be said that the need for a revaluation can be caused by various reasons, for example, a desire to improve the company's image. After all, if the initial cost of fixed assets increases, then the value of the company's net assets, as well as equity capital, increases, as a result of which the company becomes attractive to investors or has the opportunity to receive loans from the bank.
At the same time, an increase in the initial cost of fixed assets is associated with an increase in tax payments to the budget, in particular, the amount of tax on the property of an organization increases. In addition, the negative side of revaluation is the fact that the approximation of the cost of fixed assets to real prices, in turn, distorts the reliability of the company's financial results, because virtual profit or loss appears in the accounting. These points should be considered by the organization when deciding whether to revaluate.
The decision taken to revalue fixed assets (whether it is carried out or not) is fixed in the accounting policy of the company. Note that the rules of PBU 6/01 prohibit reassessment more often than once a year, the same explanations are given by the specialists of the Ministry of Finance of Russia in their Letter dated October 22, 2008 N 07-05-10 / 74.
Consequently, the organization in its regulatory document may establish a different frequency of its conduct, for example, once every two or three years. Moreover, the revaluation of fixed assets is always carried out at the beginning of the reporting year, therefore, the actual timing of its implementation should also be fixed in the accounting policy. It should be borne in mind that it must be completed before the end of the first reporting period of the current year (usually a quarter).
Keep in mind that if the company decides to revalue the fixed assets, then in the future, the revaluation will have to be carried out regularly. Otherwise, the cost of revalued fixed assets, at which they are reflected in accounting and reporting, may differ materially from their current replacement cost.
However, if the cost of revalued objects does not differ significantly from their replacement cost, then the regularity of revaluation can be neglected. For this, it is advisable to fix the required level of materiality in your accounting policy. Considering that PBU 6/01 does not contain such a criterion, the organization has the right to independently set the threshold for the materiality level, for example, at 5%.
Note that it does not follow from PBU 6/01 that the revaluation should be made exclusively for all fixed assets belonging to the company. Therefore, the organization independently decides on the composition of the revalued objects. Wherein the organization may overestimate:
- all OS owned by the organization;
- a group of homogeneous OS;
- several groups of homogeneous OS.
The chosen option is fixed in the accounting policy. Note that in the case of a group revaluation, it is necessary to provide for the classification of fixed assets into groups of similar objects and also bring it into your accounting policy. Due to the fact that the regulatory documents of accounting legislation do not contain criteria for including fixed assets in groups of homogeneous objects, the company has the right to use its own methods of forming these groups - for fixed assets of the same type, class, etc. You can also use the Classification of fixed assets included in depreciation groups, approved by the Decree of the Government of the Russian Federation of January 1, 2002 N 1 "On the Classification of fixed assets included in depreciation groups" (hereinafter referred to as the Classification of fixed assets). Despite the fact that the Classification of Fixed Assets is intended for tax accounting purposes, according to clause 1 of the said Resolution, it can also be applied for accounting purposes. Note that the Ministry of Finance of Russia in its Letter dated January 12, 2006 N 07-05-06 / 2 "Recommendations to audit organizations, individual auditors, auditors for auditing the annual financial statements of organizations for 2005" when grouping objects recommends proceeding from their purpose , for example:
- building;
- structures;
- transport;
- transfer devices;
- machinery and equipment and so on.
Note! If the organization has fixed assets that are not subject to revaluation, then a list of them should be provided in the accounting policy and the frequency of its updating should be indicated. It would not be superfluous to mention the person responsible for clarifying it.
It should be noted that the Methodological Guidelines for Accounting for Fixed Assets says that land plots and natural resources (water, subsoil and other natural resources) are not subject to revaluation.
The norms of clause 15 of PBU 6/01 determine that the revaluation of fixed assets is made by recalculating its initial value or current (replacement) value, if this object was revalued earlier, and the amount of depreciation accrued for the entire period of use of the object. Moreover, what methods are used for these purposes, the accounting standard is silent. At the same time, clause 43 of the Methodological Guidelines for accounting for fixed assets provides for two possible options for its implementation:
- index method;
- method of direct conversion at market prices.
The first of these methods is based on adjusting the value of fixed assets with the help of special deflator indices set by the statistics authorities. However, at present, such indices are not officially published by Rosstat, as a result of which this method is practically not used. Although, if desired, the company can apply to Rosstat with a request to develop the corresponding indices, but only on a paid basis. This is also indicated by financiers in their Letter dated July 31, 2003 N 04-02-05 / 3/63.
It is clear that in such conditions the method of direct recalculation of the asset value at market prices is usually used. What sources of obtaining market prices are used in this case, we have already noted above.
Given that the index method has not actually been canceled, the organization should fix the chosen method of revaluation in its accounting policy.
Like any other fact of economic activity, revaluation requires its documentary confirmation. At the same time, there are no unified documents for formalizing the results of the revaluation carried out, so the organization must develop such documents independently and consolidate their use in its accounting policy.
We remind you that in accordance with paragraph 2 of Art. 9 of the Federal Law of November 21, 1996 N 129-FZ "On Accounting" (hereinafter - Law N 129-FZ) independently developed forms of documents can be used by organizations only provided that they contain all the details referred to by Law N 129-FZ in the mandatory.
Usually the results of the revaluation carried out are recorded in special revaluation sheets containing the following data:
- OS name;
- OS inventory number;
- date of purchase of the OS;
- date of acceptance of the object for accounting as a fixed asset;
- the cost of fixed assets before the date of the revaluation;
- current (replacement) cost of fixed assets;
- revaluation coefficient. It is determined by dividing the current (replacement) value of the fixed asset by its value before the revaluation date;
- the amount of revaluation (markdown) of fixed assets;
- depreciation of fixed assets until the date of revaluation;
- depreciation of fixed assets after the date of revaluation;
- the amount of revaluation (markdown) of depreciation.
It should be borne in mind that the results of the revaluation carried out on the first day of the reporting year are reflected by the organization in the accounting separately. Moreover, the revaluation results are not included in the data of the financial statements of the previous reporting year, but are taken when forming the balance sheet data at the beginning of the current year. Therefore, the balance sheet data on the last day of the previous year will not coincide with the data on the first day of the reporting year. Therefore, information on the revaluation performed is necessarily disclosed by the organization in an explanatory note.
To reflect the revaluation results in the organization's accounting, you should open a special subaccount "Revaluation of fixed assets" to balance sheet accounts 83 "Additional capital", 84 "Retained earnings (uncovered loss) and to account 02" Depreciation of fixed assets ".
As defined by clause 15 of PBU 6/01, the amount of the revaluation of fixed assets is credited to the additional capital of the organization. In this case, the following entries are reflected in the accounting:
Debit 01 Credit 83, subaccount "Revaluation of fixed assets", the amount of revaluation of the initial cost of fixed assets is reflected;
Debit 83, subaccount "Revaluation of fixed assets", Credit 02 increased the amount of depreciation of the revalued fixed assets.
The amount of revaluation of an item of fixed assets, equal to the amount of its markdown carried out in previous reporting periods and referred to the account of retained earnings (uncovered loss), is credited to the account of retained earnings (uncovered loss).
The amount of the depreciation of an item of property, plant and equipment as a result of the revaluation is charged to retained earnings (uncovered loss). In this case, the following entries are reflected in accounting:
Debit 84, subaccount "Revaluation of fixed assets", Credit 01 reflects the amount of the markdown on the initial cost of fixed assets;
Debit 02 Credit 84, subaccount "Revaluation of fixed assets", the amount of depreciation of the discounted fixed assets is reduced.
The amount of the depreciation of an item of fixed assets is referred to a decrease in the additional capital of the organization formed by the amounts of the revaluation of this item carried out in previous reporting periods. The excess of the amount of the devaluation of the object over the amount of its revaluation credited to the additional capital of the organization as a result of the revaluation carried out in previous reporting periods is charged to the account of retained earnings (uncovered loss). The amount charged to the account of retained earnings (uncovered loss) must be disclosed in the accounting statements of the organization.
Upon disposal of an asset subject to revaluation, the amount of its revaluation is transferred from the additional capital of the organization to retained earnings of the company.
Example
... The organization, as of January 1, 2010, carried out a revaluation (markdown) of an item of fixed assets, the initial cost of which, according to accounting data, is 560,000 rubles. The object was purchased and put into operation in January 2009. When the object is accepted for accounting, its useful life is set equal to 5 years, depreciation is charged on a straight-line basis.
According to the documented market price of similar property, the value of the object as of January 1, 2010 is 476,000 rubles.
The amount of depreciation accrued at the time of the revaluation is 102,666.63 rubles. Revaluation factor 0.85 (476,000 / 560,000).
In the accounting of the organization, operations on revaluation of an item of fixed assets will be reflected in the following accounting entries:
Debit 84, subaccount "Revaluation of fixed assets", Credit 01 "Fixed assets"
- 84,000 rubles. - the depreciation of the object of fixed assets is reflected (560,000 - 476,000);
Debit 02 "Depreciation of fixed assets" Credit 84, subaccount "Revaluation of fixed assets",
- 15 399.99 rubles. - the depreciation of the amount of accrued depreciation is reflected (102 666.63 - 102 666.63 x 0.85).
Please note that in order to tax the profits of organizations, changes in the initial value of fixed assets are not provided for during revaluation. Thus, after the revaluation, the organization will reflect different amounts of depreciation in accounting and tax accounting, which will lead to the formation of differences between the two types of accounting and the need to apply the Accounting Regulation "Accounting for Income Tax Calculations" PBU 18/01, approved by the Order of the Ministry of Finance of Russia dated November 19, 2002 N 114n.
It is worth noting that the Ministry of Finance has prepared a bill amending PBU 6/01 and PBU 14/2007. According to the document, starting next year, enterprises will have to revalue fixed assets not at the beginning, but at the end of the year. The amount of the markdown will not be charged to retained earnings (uncovered loss), but to other expenses. And the amount of revaluation of fixed assets, equal to the amount of the previous markdown, will have to be attributed not to retained earnings, but to other income. Similar changes will affect intangible assets. In addition, the above draft order of the Ministry of Finance excluded the provision that land plots and natural resources are not subject to revaluation (clause 1 of clause 5 of the draft, amendments are made to clause 43 of the Methodological Instructions on accounting for fixed assets). The changes will correlate with the provisions of the new edition of clause 1 of Art. 257 of the Tax Code of the Russian Federation, otherwise a revaluation would be inevitable.
The business operates on the basis of fixed assets. These are key assets, apart from stocks and other securities. There are a number of procedures, mainly of an accounting nature, that can be carried out in relation to fixed assets. Overestimation is among the most common. Despite the fact that its implementation is not directly prescribed by any law, this procedure is by no means a mere formality. It can have a real impact on business performance in several ways. Therefore, the correctness of the assessment is extremely important. What are the criteria that determine the quality of this procedure? What kind of regulations govern its implementation? What can be the results of revaluation of fixed assets?
What are fixed assets
First, a little theoretical excursion. Before studying what a revaluation of fixed assets is, consider the essence of this action. Most organizations have property that is used as a resource for production, performance of work or provision of services and for other purposes. The set of its constituent elements is called fixed assets. Accounting law requires businesses to keep records of them. Based on this nuance, the definition of fixed assets can be supplemented with the wording - this is the property, the period of use of which is 12 or more months (this period is determined by the theory and practice of the relevant legislation).
Additional criteria for recognizing certain elements as fixed assets include, for example, intended for internal use (that is, property not for sale), as well as endowment with properties that imply economic benefits. In the all-Russian classifier of fixed assets, as well as in sectoral regulations, fixed assets, as a rule, include buildings (or structures), as well as machines (equipment), various kinds of devices, computers, transport, household inventory, etc.
The subtleties of accounting
For accounting of fixed assets, two main accounting accounts are used: 01 and 03. The property of the company of the corresponding type is valued on the basis of three types of value: initial, residual, and replacement. In the first, they are taken into account. Let's consider what the initial cost is in more detail.
According to the generally accepted definition among Russian accountants, the initial cost is the aggregate of the company's expenses for the purchase (or manufacture) of fixed assets, excluding VAT. Moreover, if the property was donated to the organization, then its initial value is based on the market price at the time of receipt at the disposal of the company.
In accounting, procedures are provided for in which the initial value of the property can be changed. These include the revaluation of fixed assets. If this particular procedure is involved, then the property is assigned a replacement value - it is assumed that it is more relevant than the original one, since it takes into account current prices and other factors.
The need for reassessment
Thus, the revaluation of fixed assets is an adjustment of their real value. What is this procedure for? The main point here is to provide the correct information regarding the financial statements. It may well turn out that during the revaluation it turns out that fixed assets are much more expensive or, conversely, cheaper than their current market equivalents.
At the same time, the revaluation of fixed assets is a voluntary procedure for organizations. Moreover, it can only be carried out in relation to property that belongs to the firm by right of ownership. Revaluation of fixed assets may be carried out no more than once a year.
Fixed assets in many organizations are underlying assets. The operational state they are in may be of interest to investors or shareholders (current or potential). Information about how things are actually going in the company must be reliable.
What other goals can the organization pursue by initiating procedures such as revaluation and revaluation of property, plant and equipment? This can be, for example, an increase in the size of the authorized capital. A frequent option here is an increase in the price of shares due to additional tangible assets formed during the revaluation process. By the way, in practice, this mechanism is useful for enterprises in respect of which the legislator has requirements in terms of the size of the authorized capital - there are such industries. Therefore, if a company operating in such a segment does not carry out a reassessment in time, then there is a certain risk that the regulator will issue an unwanted order to stop working.
Another factor that can objectively determine the need for an appropriate procedure is price (tariff) adjustment. By re-evaluating and identifying that the cost of production of goods has become higher, the enterprise can reasonably set higher prices and make its business model more stable.
In many cases, a lender (usually a bank), when determining the amount of a possible loan for an enterprise, analyzes the company's stability based on the value of fixed assets. Therefore, revaluation can play an important role in the aspect of attracting a profitable loan by a business.
Revaluation or analysis of property value?
The analysis of the property value is considered to be somewhat close to the revaluation of fixed assets. What is its specificity? The fact is, this kind of analysis is a procedure that is not subject to official registration and fixation in primary and accounting documents. The methodology used by companies (usually third-party firms) producing it may be significantly different from the standards adopted in the practice of revaluation of fixed assets as such.
At the same time, the analysis of the property value, as a rule, is cheaper and easier from an organizational point of view, and therefore in many cases it is preferable if the task is, for example, to show the value of fixed assets to the same bank or investors. However, if we are talking about the need to reduce the basis for calculating taxes, a revaluation of fixed assets, depreciation and other related procedures that meet all the criteria are required.
Factors of cost change
What are the main reasons for the change in the value of fixed assets? Two groups can be distinguished. First, these are inflationary factors. Over time, the goods purchased earlier, in many cases, becomes cheaper in relation to the purchasing power of the subjects of economic processes. Secondly, this is wear - operational or natural (due to the shelf life of parts and materials). Thirdly, this is a factor of technological progress - some types of resources (especially such as electronics) become significantly obsolete over time and therefore quickly lose their market value.
What happens if you do not reassess?
We noted above that the revaluation of the initial cost of fixed assets is a voluntary procedure for Russian enterprises. However, refusal to carry out it may lead to some risks. For example, if a firm, without engaging revaluation, artificially overestimates the indicators of its assets relative to real ones, then the base for property tax may increase. In turn, if the figures are overestimated and at the same time are clearly unreasonable, the company may lose its attractiveness in the eyes of investors or creditors.
Thus, revaluation of fixed assets is an optional but highly desirable procedure. In many cases, its implementation in accordance with the correct algorithm can guarantee a profitable loan, a positive assessment from existing or potential investors. Despite the fact that revaluation is a voluntary procedure, in the legislation, as in Russian accounting practice, there are guidelines and criteria that determine the optimal scenario for its implementation. What can be the recommended algorithm for performing the task related to clarifying the cost of fixed assets? Let's consider the possible scenarios, as well as the nuances accompanying them.
Revaluation algorithm
The main mechanism for carrying out the procedure in question is the recalculation of the initial, original value of the property or the previously calculated replacement value, taking into account the depreciation that was accrued over the period of use of the resource.
As a rule, the decision that the organization will revalue the cost of fixed assets must be documented in internal corporate sources. Most often, this is an order of the management corresponding to the appointment. In this document, it is necessary to reflect exactly what resources will be revalued: everything that the company has, or some individual types, the methodology for fixing the procedure on the accounting accounts, as well as the list of officials responsible for the revaluation process.
At the end of the procedure, there may be two results. The first is when the replacement cost turns out to be less than the original one. In this case, the result is a markdown. The second scenario is when the replacement cost is higher. In this case, the result will be an additional estimate. Sometimes accountants fix the revaluation factor for fixed assets. For example, if the initial cost was 100 thousand rubles, and the replacement cost was 70, then the corresponding figure will be 0.70.
It is worth noting the most important nuance. If the company has at least once carried out a revaluation of fixed assets, then a similar procedure should be carried out in the future, and moreover on a regular basis. These are the prescriptions in the Accounting Rules (PBU 6/01). However, as noted by some experts, this document does not indicate the exact frequency with which the revaluation should be carried out. It was only noted that not more often than once a year.
In the recommendation of the Ministry of Finance, at the same time, there is a clause according to which the revaluation of objects (fixed assets) should be based on the expected change in their value by 5%. That is, as soon as the company has reason to believe that fixed assets, such as computers, have fallen in price (or for some reason have risen in price) by 5%, a revaluation can be carried out. Although each company has the right to establish its own criteria. However, upon their determination, the company must make the appropriate entries in the documents reflecting the accounting policy.
Revaluation and accounting policies
Some experts note that the sources of law regulating the revaluation procedures do not require that the frequency of the corresponding procedure be recorded in the accounting policy of the firm. But if the company's management nevertheless decided to do this, then it is useful to supplement this entry with wording that reflects the possibility of revaluation in terms that may differ from the established ones.
For example, in cases where the market situation suggests a significant adjustment in the value of any type of property, plant and equipment in a particular period. In turn, the firm can make a decision that the frequency of revaluation should be changed on the basis of the same "semi-official" analysis of the market value of resources.
Note that if the company stops revising the cost of fixed assets on a regular basis, then this, as follows from one letter from the Ministry of Finance, can be regarded as a change in the provisions of the accounting policy, which, in turn, based on the requirements of accounting legislation, should have justification, supported by figures in the financial statements, and be correctly formalized in the internal documentation of the company.
At the same time, if the changes in the accounting policy of the company are such that the financial results of the organization's work turned out to be completely different, as if nothing had changed, a monetary assessment of the corresponding adjustments should be made. As a rule, in such cases, the company must reflect the dynamics of change in relevant indicators based on at least two measurements (that is, over two years). Therefore, before deciding to abandon the practice of revaluation, the organization should carry out at least two procedures of the appropriate type.
Evaluation "wholesale"
There is an interesting and useful option with a revaluation - its object is not a collection of individual objects, but a group of homogeneous ones. At the same time, the company can determine the necessary classification criteria on its own - there are no strict recommendations in the accounting rules in this regard. In some other sources of law, in particular, in the letters of the Ministry of Finance, there are landmarks by which objects can be grouped, based on their common purpose.
At the same time, all the information that reflects the procedure and criteria in question should be reflected in the accounting policy of the company. At the same time, when drawing up the necessary registers, the company must adhere to the standards and names set forth in the All-Russian Classifier of Fixed Assets. In practice, grouping of objects can be useful if the company is faced with the task of optimizing taxation. Thus, the enterprise will be able to calculate which types of fixed assets most strongly affect the amount of the taxable base.
Accounting
It will be useful to study such a nuance as accounting for the revaluation of fixed assets. We noted above that an alternative could be a "semi-official" analysis of the market value of funds, ordered from a third party. But if we are talking about a full-fledged procedure of the first type, it is necessary that all stages of accounting are strictly followed, so that the postings characteristic of such a phenomenon as the revaluation of fixed assets are applied correctly. Let's consider this aspect.
How are revaluation of fixed assets accounted for? Above, we said that the result of the corresponding procedure may be an additional valuation or a markdown. In the first case, the totals are recorded as an addition to the firm's capital. To do this, the accountant makes entries in the debit of account 01 (which is called "Fixed assets") and in the credit of account 83 ("Additional capital"). This is, of course, not the only scenario in which an account is involved. The revaluation of fixed assets may, for example, be accompanied by the result when the numbers will be recorded in the profit and loss accounts in relation to the accounting period. That is, the double entry will change by half - account 01 debit, account 91 credit ("Other income and expenses").
If the revaluation result is opposite to what we noted above (the replacement cost is lower than the original one), then the markdown is recorded. A double entry on it will look different - account 91 debit, account 01 credit. It is possible that the markdown is decided to be attributed to a decrease in the company's capital, which, in turn, was formed due to revaluation in previous periods. In this case, the double entry will be as follows - debit 83 of account ("Additional capital") and credit of account 01.
Another possible scenario is if the markdown is higher than the revaluation calculated in previous periods. Then the entry fixes the figure in the profit and loss account as an expense. It will look like this: debit 91 account, credit account 01. It may also happen that the disposal of fixed assets in respect of which the revaluation procedure was initiated. In this case, a double entry may look like this: debit account 84 ("Retained earnings"), account credit 83.
The results of the revaluation of fixed assets are reflected, therefore, in different accounts, depending on whether the calculated figure at replacement cost exceeds the previous indicator or not. This is the procedure established by the accounting rules.
As we can see, used in the course of such a procedure as the revaluation of fixed assets, the postings are quite simple in their structure. At the same time, it is very important not to be mistaken in determining the numbers that are to be recorded in the accounting. For this, it is important to choose the optimal method for carrying out the procedure in question.
Revaluation methods
What are the methods of revaluation of fixed assets? In Russian accounting practice, there are two main ones. The first is the index method. Its peculiarity is that the cost of fixed assets is calculated on the basis of deflator indices, which are established by the Rosstat authorities. The second method is direct conversion. Applying it, organizations use a whole range of different indicators: the same Rosstat data, market prices, information from special literature and the media, help from expert organizations. Many experts agree that the second method is more effective. It involves a more comprehensive procedure for the revaluation of fixed assets. The quality of the relevant procedure can directly affect the decision of the bank or other lender or investor regarding cooperation with the company.
Publication
So why revaluation is necessary?
Let's give an example: an organization a year ago purchased equipment for 850,000 rubles, for the year the accrued depreciation was 50,000 rubles. Consequently, the residual value in the amount of 800,000 rubles should be reflected in the balance sheet in the line “Fixed assets”. But it is also known that over the past year, the manufacturer has released a new, more improved generation of equipment, and the equipment purchased a year ago is automatically outdated, and now it can be sold on the market for only 640,000 rubles. If the equipment is revalued, it will be recorded on the balance sheet of the organization at a market value of 640,000 rubles, which contributes to the observance of the completeness and reliability of information in the preparation of financial statements.
In fact, the revaluation of fixed assets is a change in the initial value of the fixed assets, made by the decision of the company, in connection with the dynamics of prices for the specified property. Moreover, according to clause 15 of PBU 6/01, revaluation is a right of the organization, and not an obligation. Therefore, the tax authorities cannot oblige the organization to revalue fixed assets and use its results for the purpose of calculating property tax. However, if the organization has decided to reassess certain groups of fixed assets, then in the future their regular revaluation will be mandatory (clause 15 of PBU 6/01 and clauses 44, 45 of the Methodological Guidelines).
In practice, revaluation of fixed assets can be caused by various reasons: for example, the desire to improve the company's image, since if the initial cost of fixed assets increases, then the value of the company's net assets increases; the desire to increase equity capital, as a result of which the company becomes attractive to investors or has the opportunity to get a loan from a bank; with the competent use of modern methods of revaluation of fixed assets, it is possible to increase depreciation charges and thereby increase the cost of goods that are produced at the enterprise, when preparing the enterprise for sale and purchase, it is necessary to know the market value of the property.
At the same time, an increase in the initial cost of fixed assets is associated with an increase in tax payments to the budget, in particular, the amount of tax on the property of an organization increases. As a result of the revaluation, the amount of the collateral may change. For the borrower, this may have negative consequences, since in the event of a decrease in the value of collateral, the bank may offer to increase the amount of collateral. In addition, the negative side of revaluation is the fact that the approximation of the cost of fixed assets to real prices, in turn, distorts the reliability of the company's financial results, since virtual profit or loss appears in the accounting. These nuances of the organization should be taken into account when deciding on a revaluation.
When making a decision on revaluation of fixed assets (whether it is carried out or not), it is fixed in the accounting policy of the company. Note that the norms of PBU 6/01 prohibit revaluation more often than once a year (Letter of the Ministry of Finance of Russia dated 10.22.2008 N 07-05-10 / 74). Consequently, the organization in its regulatory document may establish a different frequency of its conduct, for example, once every two or three years.
However, if the value of revalued items differs from their replacement value insignificantly, the regularity of revaluation can be neglected. For this, it is advisable to fix the required level of materiality in your accounting policy. Considering that PBU 6/01 does not contain such a criterion, the organization has the right to independently set the threshold of the materiality level, for example, at the rate of 5%.
For the purpose of documentary confirmation of the changed value of fixed assets, the organization draws up a special statement of the results of the revaluation of homogeneous groups of fixed assets. The changed value of fixed assets is confirmed by the statement of results of revaluation of homogeneous groups. There is no unified form for this document, so the company has the right to develop it independently, approving it as one of the appendices to the accounting policy. In addition, the results of the revaluation of the fixed asset must be reflected in section No. 3 "Revaluation" of the inventory card of this object in the form No. OS-6 (approved by the Resolution of the State Statistics Committee of Russia dated 21.01.2003 No. 7).
The subject of revaluation of fixed assets are:
- buildings, structures;
- working power machines and equipment;
- measuring and control devices and devices;
- Computer Engineering;
- vehicles;
- tool;
- transmission devices;
- perennial plantings;
- production and household equipment;
- other types of fixed assets that are in operation are on conservation, in reserve;
- prepared for write-off, but not drawn up in the prescribed manner by the relevant acts;
- Construction in progress;
- equipment to be installed.
The current (replacement) cost of fixed assets is the amount of cash that must be paid by the organization on the date of the revaluation if it is necessary to replace any object. It is determined by the organization, including on the basis (clause 43 of the Methodological Guidelines):
- data on similar products;
- information on the price level available to state statistics bodies, trade inspections and organizations;
- data on similar products received from manufacturing organizations
- data on the price level published in the mass media (mass media) and special literature;
- technical inventory bureau estimates;
- expert opinions on the current (replacement) cost of fixed assets.
- index method;
- direct recalculation method at documented market prices.
Since the index method has not actually been canceled, the organization should fix the chosen method of revaluation in its accounting policy. In addition, the method of direct recalculation of the value of fixed assets at market prices is used, and the recalculation algorithm itself should be fixed in the accounting policy.
The results of the revaluation of fixed assets carried out as of the end of the reporting year shall be reflected in the accounting separately. The procedure for reflecting the results of revaluation of an item of fixed assets in accounting and reporting depends on whether this item was revalued earlier or this revaluation is the first for it.
Table 1. Reflection of revaluation in accounting
| Revaluation result | Contents of operation | Debit | Credit |
| In case of revaluation | No markdown has been made before | ||
| Reflected the revaluation of the original cost | 01 "Fixed assets" | 83 "Additional capital | |
| Accrued depreciation on fixed assets increased | 83 "Additional capital | 02 "Depreciation of fixed assets" | |
| Earlier, there was a markdown of the fixed assets | |||
| Reflected revaluation of fixed assets in the amount equal to the previously carried out markdown | 01 "Fixed assets" | 91.1 "Other income" | |
| Reflected revaluation of depreciation within the previously posted depreciation | 91.2 "Other expenses" | 02 "Depreciation of fixed assets" | |
| Revaluation of replacement cost in excess of the previous markdown | 01 "Fixed assets" | 83 "Additional capital | |
| Revaluation of depreciation in excess of the previous depreciation amounts | 83 "Additional capital | 02 "Depreciation of fixed assets" | |
| In case of markdown | No re-assessment has been made before | ||
| Recognized markdown on historical cost | 91.2 "Other expenses" | 01 "Fixed assets" | |
| Decreased accrued depreciation on fixed assets | 02 "Depreciation of fixed assets" | 91.1 "Other income" | |
| An additional assessment of the OS was carried out earlier | |||
| Reflected depreciation of replacement cost within the amount of the previous revaluation | 83 "Additional capital | 01 "Fixed assets" | |
| Reflected depreciation markdown within the previously carried out revaluation | 02 "Depreciation of fixed assets" | 83 "Additional capital | |
| Depreciation of replacement cost in terms of excess of the amount of the previous revaluation | 91.2 "Other expenses" | 01 "Fixed assets" | |
| Depreciation of depreciation within the amount of the previous revaluation | 02 "Depreciation of fixed assets" | 91.1 "Other income" | |
We would like to draw your attention to the fact that the results of revaluations carried out by the organization in accounting are not reflected in tax accounting. The Tax Code stipulates that the initial cost of fixed assets can only change in cases of completion, retrofitting, reconstruction, modernization, technical re-equipment, partial liquidation and other similar reasons (clause 2 of article 257 of the Tax Code of the Russian Federation). Consequently, when a taxpayer carries out a revaluation (devaluation) of the value of fixed assets at market value, the positive or negative amount of such revaluation (devaluation) is not recognized as income (expense) accounted for for tax purposes.
Example 1. OOO "Zvezda" decided to revalue fixed assets. The cost of fixed assets at the end of the previous reporting year amounted to 1,225,000 rubles. The current (replacement) cost of objects of this homogeneous group at the end of the reporting year is 1,375,000 rubles. The resulting difference is recognized as significant: (1,375,000 - 1,225,000): 1,225,000 = 0.122.
Consider the same example, provided that the current (replacement) cost is 1,265,000 rubles. In this case, the revaluation decision is not made, since the resulting difference is not significant: (1,265,000 - 1,225,000): 1,225,000 = 0.033.
Example 2. The organization for the first time revaluates property, plant and equipment. The historical cost of the group of fixed assets as of December 31, 2011 was RUB 13,535,500, their market value was RUB 11,724,250. The amount of accrued depreciation before revaluation was 5,456,300 rubles. In accounting and tax accounting, the straight-line depreciation method is used. The revaluation factor is defined as the ratio of market value to original value.
Let's calculate the coefficient of revaluation of fixed assets:
11 724 250: 13 535 500 = 0,87.
Restated depreciation amount:
5,456,300 x 0.9 = 4,746,981 rubles.
The amount of the depreciation of the group of fixed assets:
13 535 500 - 11 724 250 = 1 811 250 rubles.
Amount of depreciation discounted:
5,456,300 - 4,746,981 = 709,319 rubles.
The total amount of the markdown will be:
1 811 250 - 709 319 = 1 101 931
Debit 91.2 "Other expenses" Credit 01 "Fixed assets"
- 1 811 250 rubles. - the amount of the depreciation of the initial cost of the group of fixed assets is reflected;
- 709,319 rubles. - previously accrued depreciation has been reduced.
The results of the revaluation of a group of fixed assets are not taken into account in tax accounting. Therefore, a deductible temporary difference arises in accounting, since it leads to the formation of deferred income tax, which should reduce the amount of income tax payable to the budget in the next reporting period or in subsequent reporting periods. The presence of this difference obliges the organization to accrue a deferred tax asset (clauses 11, 14 of the Accounting Regulations "Accounting for calculations of corporate income tax" PBU 18/02, approved by Order of the Ministry of Finance of Russia dated November 19, 2002 N 114n). The accrual of the specified asset is accompanied by the posting:
Debit 09 "Deferred tax assets" Credit 68 "Calculations of income tax"
- 220 386.2 rubles. (The depreciation of the group of fixed assets amounted to 1,101,931 (1,811,250- 709,319) rubles x 20%) - a deferred tax asset was accrued.
Starting from 2012, the amount of monthly depreciation charged in tax accounting for a group of objects will exceed its value accepted in accounting. In this connection, the amount of the deductible temporary difference will decrease, which will entail the partial repayment of the deferred tax asset (clause 17 of PBU 18/02):
Debit 68 "Calculations of income tax" Credit 09 "Deferred tax assets"
- the deferred tax asset has been partially repaid.
Example 3. The organization for the first time revaluates property, plant and equipment. The historical cost of the group of fixed assets as of December 31, 2011 was RUB 13,535,500, their market value was RUB 15,124,250. The amount of accrued depreciation before revaluation was 5,456,300 rubles. In accounting and tax accounting, the straight-line depreciation method is used.
15 124 250: 13 535 500 = 1,117.
5,456,300 x 1,117 = 6,094,687 rubles.
The sum of the value added for a group of objects:
15,124,250 - 13,535,500 = 1,588,750 rubles.
Amount of increase in accrued depreciation:
6 094 687- 5 456 300 = 638 387 rubles.
In accounting as of December 31, 2011, these transactions will be reflected as follows:
- 1,588,750 rubles. - reflected the revaluation of the initial cost of the group of fixed assets;
- 638 387 rubles. - the previously accrued depreciation has been increased.
Consider more complex accounting cases, when an item of fixed assets, for example, was subject to depreciation, and subsequently was revalued.
Example 4. LLC "Zvezdochka", by the decision of the head of the organization, carried out a revaluation of fixed assets at the beginning of 2011.
According to the accounting data, the data on the fixed asset were as follows:
- initial cost - 650,000 rubles;
- current value - 533,000 rubles;
- depreciation - 150,000 rubles;
- depreciation is charged on a straight-line basis.
533 000: 650 000 = 0,82.
The restated depreciation amount will be:
150,000 x 0.82 = 123,000 rubles.
Amount of depreciation markdown:
150,000 - 123,000 = 27,000 rubles.
Fixed asset depreciation:
650,000 - 533,000 = 117,000 rubles.
The total amount of the depreciation of the fixed asset will be:
117,000 - 27,000 = 90,000 rubles.
The initial data can be presented as follows:
- OS cost - 533,000 rubles;
- current value - 692,900 rubles;
- depreciation for the year amounted to 65,000 rubles.
123,000 + 65,000 = 188,000 rubles.
Let's calculate the coefficient of revaluation of the fixed asset:
692 900: 533 000 = 1,3.
Amount of depreciation, taking into account revaluation:
1.3 x 188,000 = 244,400 rubles.
The amount of revaluation of fixed assets:
692,900 - 533,000 = 159,900 rubles.
Amount of revaluation depreciation:
244,400 - 188,000 = 56,400 rubles.
The total amount of the revaluation of the fixed asset:
159,900 - 56,400 = 103,500 rubles.
Note:
At the beginning of the year, the amount of the markdown in accounting is reflected according to the old rules, namely, on account 84 "Retained earnings (uncovered loss)" and has the following form:
Debit 84 "Retained earnings" Credit 01 "Fixed assets"
- 117,000 rubles. - the amount of the initial revaluation of the value of the fixed asset;
Debit 02 "Depreciation of fixed assets" Credit 84 "Retained earnings"
- 27,000 rubles. - the amount of the depreciation markdown.
However, at the end of the year, the following rules apply: the amount of revaluation of a fixed asset in an amount equal to the previous markdown is credited to the account for other income and expenses. And the excess amount is charged to the additional capital account:
Debit 01 "Fixed assets" Credit 91.1 "Other income"
- 117,000 rubles. - reflected the revaluation of fixed assets in the amount equal to the previously carried out markdown;
Debit 91.2 "Other expenses" Credit 02 "Depreciation of fixed assets"
- 27,000 rubles. - reflected the revaluation of depreciation within the previously carried out markdown;
Debit 01 "Fixed assets" Credit 83 "Additional capital"
- 42 900 rubles. (159,900 - 117,000) - revaluation of replacement cost in excess of the amount of the previous markdown;
Debit 83 "Additional capital" Credit 02 "Depreciation of fixed assets"
- 29 400 rubles. (56 400 - 27 000) - revaluation of depreciation in excess of the amount of the previous markdown.
Failure to recognize a positive revaluation amount in income in tax accounting gives rise to a taxable temporary difference. And this, in turn, entails the accrual of a deferred tax liability (clauses 12, 15 PBU 18/02):
Debit 68 "Calculations of income tax", Credit 77 "Deferred tax liabilities"
- 18,000 rubles. (RUB 90,000 x 20%) - a deferred tax liability has been accrued.
The increase in replacement fixed assets in accounting contributes to an increase in the amount of depreciation charged in subsequent years. And it will exceed its value accepted in tax accounting. As a result, the amount of taxable temporary difference will begin to decrease, and the deferred tax liability will be partially extinguished (clause 18 of PBU 18/02). Therefore, the following entry will be made in accounting on a monthly basis:
Debit 77 "Deferred tax liabilities" Credit 68 "Calculations of income tax"
- the deferred tax liability has been partially settled.
Example 5. OOO "Zvezda" at the beginning of the year carried out a revaluation of fixed assets. It was overvalued. The initial data for such an object is presented as follows:
- initial cost - 400,000 rubles;
- current value - 460,000 rubles;
- accrued depreciation - 82,000 rubles.
Fixed asset revaluation factor:
460 000: 400 000 = 1,15.
Amount of depreciation after revaluation:
82,000 x 1.15 = 94,300 rubles.
The amount of revaluation of depreciation will be as follows:
94,300 - 82,000 = 12,300 rubles.
Fixed asset revaluation amount:
460,000 - 400,000 = 60,000 rubles.
The total amount of the revaluation will be:
60,000 - 12,300 = 47,700 rubles.
At the end of 2011 (December 31, 2011) the property, plant and equipment were revalued again. There was a markdown of the main medium.
Let's present the data on the object at the end of 2011:
- depreciation charged for the year - 40,000 rubles;
- fixed asset value - 460,000 rubles;
- current value - 368,000 rubles.
368 000: 460 000 = 0,8.
Accumulated depreciation:
94,300 + 40,000 = 134,300 rubles.
Let's recalculate depreciation after the markdown:
134 300 x 0.8 = 107 440 rubles.
The depreciation markdown will be as follows:
134300- 107440= 26 860
The amount of the depreciation of the value of the fixed asset will be:
460,000 - 368,000 = 92,000 rubles.
The total amount of the depreciation of the fixed asset:
92,000 - 26,860 = 65,140 rubles.
At the beginning of the year, operations for revaluation of fixed assets will be reflected in accounting as follows:
Debit 01 "Fixed assets" Credit 83 "Additional capital"
- 60,000 rubles. - revalued OS;
Debit 83 "Additional capital" Credit 02 "Depreciation of fixed assets"
- 12 300 rubles. - revaluation of depreciation for fixed assets.
At the end of 2011, as we remember, the fixed asset was discounted. In this case, the following rules for reflecting the revaluation in accounting will apply, namely, the amount of the revaluation equal to the amount of its markdown carried out in previous reporting periods is credited to the accounts for other income and expenses (account 91). If the revaluation exceeds the amount of the previous markdown, then this amount must be attributed to account 83 "Additional capital".
Let's reflect the results of the given example in the form of the following transactions:
Debit 83 "Additional capital" Credit 01 "Fixed assets"
- 60,000 rubles. - the depreciation of the replacement cost is reflected within the amount of the previous revaluation;
Debit 02 "Depreciation of fixed assets" Credit 83 "Additional capital"
- 12 300 rubles. - reflected the depreciation markdown within the previously carried out revaluation;
Debit 91.2 "Other expenses" Credit 01 "Fixed assets"
- 32,000 rubles. (92,000 - 60,000) - depreciation of the replacement cost in terms of exceeding the amount of the previous revaluation;
Debit 02 "Depreciation of fixed assets" Credit 91.1 "Other income"
- 14 560 rubles. (26 860 - 12 300) - depreciation markdown within the amount of the previous revaluation;
Debit 09 "Deferred tax assets" Credit 68, subaccount "Calculations of income tax",
- 3 488 rubles. (17,440 (= 65,140-47,700) rubles x 20%) - a deferred tax asset has been accrued.
Are revaluation of land plots carried out? Many organizations register land plots purchased long ago, therefore, their cost is very often low.
But when the need to get a loan arises, many want to increase the value of the organization's assets. And the organizations were faced with the question of whether it is possible to revalue land plots and, accordingly, increase the value of assets.
And until 2011, it was impossible to revalue land plots (paragraph 3, clause 43 of the Methodological Guidelines for Accounting for Fixed Assets, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 N 91n).
On January 1, 2011, paragraph 3 of clause 43 of the Methodological Guidelines for Accounting for Environmental Protection was canceled, which stated that land plots and natural resources (water, subsoil and other natural resources) should not be overestimated. Since PBU 6/01, as a document of great legal force, does not establish such a restriction, organizations can revalue such fixed assets.
Consequently, land plots are now subject to revaluation, which can be carried out no more than once a year at the end of the reporting year. The organization has the right to revaluate the value of the land plot in accounting in order to reflect its real value, however, for the purpose of calculating income tax, the results of the revaluation of property, in accordance with Art. 257 of the Tax Code, are not taken into account (the Ministry of Finance of Russia in a Letter dated July 8, 2011 N 03-03-06 / 1/412).
Proceeding from the fact that the tax base for the tax on the property of organizations is determined according to the accounting data, when a positive amount of revaluation of fixed assets occurs, an additional tax burden arises in the form of property tax.
We remind you that land plots and other natural resources (water bodies and other natural resources) are not subject to taxation on the property of organizations (subparagraph 1 of paragraph 4 of article 374 of the Tax Code of the Russian Federation), therefore, their revaluation will not affect the tax burden in any way " ...
How to reflect the revaluation results in the financial statements?
Balance sheet. Section III "Capital and reserves" of the balance sheet now includes line 1340 "Revaluation of fixed assets", which reflects, in particular, the revaluation of fixed assets. In this case, the amounts of additional capital are indicated in the balance sheet separately on line 1350, excluding the amounts that appeared as a result of the revaluation of non-current assets.
Profits and Losses Report. Starting from the annual reporting for 2011, the revaluation results to be credited to other income or expenses are reflected in table 1 of the profit and loss statement in line 2340 "Other income" and line 2350 "Other expenses", respectively.
If, following the revaluation results, there has been a change in additional capital, the amounts of such a change are reflected for reference in table 2 of the profit and loss statement in line 2510 "Result from the revaluation of non-current assets not included in the net profit (loss) of the period". Here you need to show the amounts accrued on account 83 for the reporting period during revaluation.
Statement of changes in equity. Special lines "Property revaluation" appeared in this form. They are included in the breakdown of the indicators "Capital increase - total" and "Capital decrease - total" both for the reporting year and for the previous year (lines 3212, 3222 and 3312, 3322, respectively).
At the same time, it should be borne in mind that now the specified lines do not reflect the data in the "Retained profit (loss)" column. Indeed, starting from the reporting for 2011, the markdown is attributed to account 91-2, and not to account 84. Therefore, the generated indicators for accounts 91-1 and 91-2 should be reflected in lines 3211, 3221 and 3311, 3321, respectively, that is, in composition of net profit.
