PRIZES

ACCOUNTING AND TAX ACCOUNTING

Payment of premiums

The procedure for paying the annual bonus The company may prescribe:

- v employment contract(paragraph 5, part 2, article 57 of the Labor Code of the Russian Federation);

In a collective agreement (part 2 of article 135 of the Labor Code of the Russian Federation);

In the Regulations on remuneration or on bonuses (or in another local normative act) (part 2 of article 135, part 1 of article 8 of the Labor Code of the Russian Federation);

In the order for the payment of a bonus (part 1 of article 8 of the Labor Code of the Russian Federation).

In the document on accrual and payment of bonuses the source of payment is indicated.

Basis for the award is the command of the leader. The order is signed by the head and employees are introduced to the order against signature.

Holiday pay from premiums

Vacation pay must be calculated that case, if, while the employee was on vacation, he was accrued a bonus based on the results of work for the previous year, and billing period and the period for which the bonus was accrued have been worked out in full.

This is due to the fact that when calculating vacation pay, annual bonuses for last year must be taken into account regardless of the date of their accrual.

In order not to recalculate vacation pay, It is better to accrue remuneration at the end of the year as early as possible. For example, December 31 of the current year. In this case, you will not need to do any recalculations.

Bonus Accounting

Reflection of annual bonuses in accounting depends on payments

Through the costs of ordinary species activities;

At the expense of other expenses.

Wiring:

DEBIT 20 (23, 25, 26, 28, 29, 44, 08) CREDIT 70- accrued bonus at the expense of expenses for ordinary activities;

DEBIT 91 sub-account "Other expenses" CREDIT 70 -- the premium is accrued at the expense of other expenses.

Insurance Contributions from Premiums

Regardless of which taxation system the organization applies, the amount of premiums is subject to contributions for compulsory pension (social, medical) insurance.

Production bonuses are subject to insurance premiums.

The date of payment of the premium is the date of its accrual. in accounting. When to charge in this case insurance premiums from premiums?

Insurance premiums should be accrued on the day the premium is accrued. in accounting to each specific employee and regardless of the date of its payment and the date of issuance of the order on bonuses to employees.

Contributions are accrued on the amount of any awards for insurance against NS and PZ.

Calculate contributions "for injuries" can be simultaneously with the calculation of other contributions.

Letter of the Ministry of Finance of Russia dated June 20, 2017 No. 03-15-06/38515

personal income tax from premiums

For the amount of bonus based on the results of work for the year personal income tax is accrued and withheld, since this payment is the income of the employee.

The premium is included in tax base for personal income tax the month in which it was paid.

Bonuses accrued for a period of work of more than a month(including annual) for personal income tax purposes, cannot be attributed to labor costs (clause 2, article 223 of the Tax Code of the Russian Federation).

It says that the date of receipt of income in the form of wages is the last day of the month for which the income is accrued, and the specified bonuses are accrued for the period exceeding one month.

In this case, the date of receipt of income is the day of payment(transfers to the employee's account) bonuses and personal income tax must be transferred on the same day.

Prizes from Gifts

Pall income is subject to taxation both in cash and in kind, including gifts. The gift may be in the form of a cash prize.

Amounts exempted from personal income tax not exceeding 4000 rubles. with a year limit. If the total value of gifts to an employee for the year did not amount to 4,000 rubles, then personal income tax does not need to be withheld.

The basis for calculating the tax will be the amount exceeded the established limit of 4,000 rubles.

income tax

When can a premium be included in income tax expenses?

1. The bonus is provided for by the employment contract (paragraph 1 of article 255 and paragraph 21 of article 270 of the Tax Code of the Russian Federation);

2. The bonus must be paid for performance indicators (clause 2, article 255 of the Tax Code of the Russian Federation).

The annual bonus is included in income tax expenses, if one of two conditions is met:

The employment contract specifies the amount and conditions for calculating the bonus;

"Employees are paid bonuses provided for by the Regulations on Bonuses, approved by Order No. ___ dated ___________."

If the annual premiums do not reduce tax profit, then in the account there are permanent differences(clause 4 PBU 18/02), which lead to the formation of a permanent tax liability (clause 7 PBU 18/02).

What premiums cannot be expensed?- in the letter of the Ministry of FinanceN 03-03-06/1/75456

Dismissed Employee Award

Let's say that an employee quit before the annual bonus was accrued, and the bonus was accrued for performance.

In this case, the payment of an annual bonus is provided in an employment contract with an employee.

In the event of his dismissal, payment of all amounts due to him is made on the day of dismissal (Article 140 of the Labor Code of the Russian Federation).

It is possible that the amount of the premium is not yet known at this time. Then the bonus provided for by the collective or labor agreement and accrued after the dismissal of the employee can be taken into account in expenses.

It is calculated proportionally period for which the employee worked.

With the accrual method The timing of recognition of expenses in the form of annual bonuses depends on whether the direct or indirect costs they relate.

Direct costs are taken into account as products (works, services) are sold, in the cost of which they are taken into account (paragraph 2, clause 2, article 318 of the Tax Code of the Russian Federation).

Indirect costs are recognized at the time of accrual.

Example

On March 31, 2017, on the basis of an order, all employees of the company were awarded a bonus based on the results of work for 2016.

The amount of the bonus is 100% of the salary.

The salary of an employee is 15,000 rubles. The amount of the bonus based on the results of work for the year is 15,000 rubles.

DEBIT 26 CREDIT 69 subaccount “Settlements with the FSS on contributions to social insurance»

435 rub. (15,000 rubles × 2.9%) - social insurance contributions to the FSS have been accrued;

DEBIT 26 CREDIT 69 sub-account "Settlements with FFOMS"- 765 rubles. (15,000 rubles × 5.1%) - contributions were accrued for health insurance in FFOMS;

DEBIT 26 CREDIT 69 sub-account "Settlements with the FSS on contributions for insurance against accidents and occupational diseases"- 30 rub. (15,000 rubles × 0.2%) - contributions for insurance against accidents and occupational diseases have been accrued.

In April 2017, the payment of the premium and the withholding of personal income tax are reflected:

DEBIT 70 CREDIT 68 sub-account "Calculations for personal income tax"- 1950 rub. (15,000 rubles × 13%) - personal income tax withheld;

DEBIT 70 CREDIT 50- 13 050 rub. (15,000 - 1950) - premium paid.

In March 2017, income tax expenses includes both the premium and insurance premiums from it.

In tax accounting, these amounts are reflected in the period of their accrual, that is, in the first quarter.

Premiums under the simplified tax system

Companies on the USN "Income" the tax base is not reduced by the amount of annual bonuses (clause 1 of article 346.14 of the Tax Code of the Russian Federation).

And companies on the simplified tax system "Income - Expenses" the bonuses provided for by the employment contract are included in the composition of expenses if the bonuses are paid for labor indicators.

Annual performance bonuses are included in expenses at the time of their payment (clause 2 of article 346.17 of the Tax Code of the Russian Federation).

Companies on UTII

At application of UTII accrual and payment of bonuses do not affect the calculation of the single tax, since UTII is calculated based on imputed income.

And if the company combines OSN and UTII and the bonus is accrued to an employee who is engaged in activities subject to UTII and in activities on the general system, then the amount of this bonus must be distributed.

Quarterly and monthly bonuses

Such bonuses can be paid from any source. Usually they are paid from the costs of ordinary activities.

Monthly and quarterly bonuses can be:

Production (for example, monthly bonuses that are part of the salary);

Non-production (for example, monthly bonuses to employees with children).

If an employee is on probation

For employees who are probationary period, all provisions of a collective or labor agreement apply (part 3 of article 70 of the Labor Code of the Russian Federation).

The payment of the premium can be issued by order in any form or take standard form No. T-11 (for one employee) or No. T-11a (for a group of employees) as a basis.

You can develop your own form of the document.

According to the salary agreement between the organization and the bank, the bank pays a fee of 0.5% of the amount of each transfer on the day the funds are transferred to the card. How to account for this remuneration and is it subject to VAT?

1. Since these receipts are not income from sales, therefore:

In accounting - take into account these amounts as part of other income on account 91;

In tax accounting - include this remuneration in non-operating income (Article 250 tax code RF).

2. This remuneration is not subject to VAT. Since the receipt of this amount is not associated with payment goods sold, works, services. See 4. Recommendation for details.

The rationale for this position is given below in the materials of the Glavbukh System vip version

1. Article: The company received a reward from the bank for attracting customers

May have problems

As for the amount of compensation received, in our opinion, it should be included in the non-operating income of the seller (Art. 346.15 and 250 Tax Code of the Russian Federation).

P.V. Yakovenko,

2. ORDER OF THE MINISTRY OF FINANCE OF RUSSIA dated October 31, 2000 No. 94n: On approval of the Chart of Accounts accounting financial and economic activities of organizations and instructions for its application (as amended on November 8, 2010)

Account 91 "Other income and expenses"

Account 91 "Other income and expenses" is intended to summarize information on other income and expenses of the reporting period (paragraph as amended, put into effect starting from the annual financial statements for 2006 - see the previous edition).

The credit of account 91 "Other income and expenses" during the reporting period reflects:

Receipts related to the provision for a fee for temporary use (temporary possession and use) of the organization's assets - in correspondence with the accounts of settlements or cash;

Receipts related to the granting for a fee of rights arising from patents for inventions, industrial designs and other types of intellectual property - in correspondence with the accounts of settlements or cash;

Receipts related to participation in the authorized capitals of other organizations, as well as interest and other income on securities - in correspondence with settlement accounts;

Profit received by the organization under a simple partnership agreement - in correspondence with account 76 "Settlements with different debtors and creditors" (sub-account "Settlements on due dividends and other income");

Proceeds from the sale and other write-offs of property, plant and equipment and other assets other than cash in Russian currency, products, goods - in correspondence with accounts for accounting for settlements or funds;

Receipts from operations with packaging - in correspondence with the accounts of accounting for containers and settlements;

Interest received (receivable) for the provision of the organization's funds for use, as well as interest for the use by a credit organization of funds held on the organization's account with this credit organization - in correspondence with the accounts of financial investments or funds;

Fines, penalties, forfeits for violation of the terms of contracts received or recognized to be received - in correspondence with the accounts of settlements or cash;

Receipts related to the gratuitous receipt of assets - in correspondence with the account for accounting for deferred income;

Receipts in compensation for losses caused to the organization - in correspondence with the accounts of settlements;

Profit of previous years, revealed in reporting year, - in correspondence with settlement accounts;

Amounts of accounts payable for which the term has expired limitation period, - in correspondence with accounts payable;

Other income (paragraph in the wording put into effect starting with the annual financial statements for 2006 by order of the Ministry of Finance of Russia dated September 18, 2006 N 115n - see the previous version).

The debit of account 91 "Other income and expenses" during the reporting period reflects:

Expenses associated with the provision for a fee for temporary use (temporary possession and use) of the organization's assets, rights arising from patents for inventions, industrial designs and other types of intellectual property, as well as expenses associated with participation in the authorized capital of other organizations - in correspondence with expense accounts;

The residual value of assets subject to depreciation, and actual cost other assets written off by the organization - in correspondence with the accounts of the corresponding assets;

Expenses associated with the sale, disposal and other write-off of fixed assets and other assets other than cash in Russian currency, goods, products - in correspondence with cost accounting accounts;

Expenses on operations with containers - in correspondence with cost accounting accounts;

Interest paid by the organization for providing it with funds (credits, loans) for use - in correspondence with the accounts of settlements or cash;

Costs associated with paying for services rendered credit organizations, - in correspondence with settlement accounts;

Fines, penalties, forfeits for violation of the terms of contracts, paid or recognized for payment - in correspondence with the accounts of settlements or cash;

Expenses for the maintenance of production facilities and facilities under conservation - in correspondence with the cost accounting accounts;

Compensation for losses caused by the organization - in correspondence with the accounts of settlements;

Losses of previous years recognized in the reporting year - in correspondence with accounts for accounting for settlements, depreciation charges, etc.;

Provisions for depreciation of investments in securities, under cost reduction material assets, for doubtful debts - in correspondence with the accounts of these reserves;

Sums accounts receivable for which the limitation period has expired, other debts that are unrealistic to collect - in correspondence with accounts receivable;

Exchange differences - in correspondence with accounts of cash, financial investments, settlements, etc.;

Expenses associated with the consideration of cases in courts - in correspondence with accounts of settlements, etc.;

Other expenses (paragraph in the wording put into effect starting with the annual financial statements for 2006 by order of the Ministry of Finance of Russia dated September 18, 2006 N 115n - see the previous version).

To account 91 "Other income and expenses" sub-accounts can be opened:

91-1 "Other income";

91-2 "Other expenses";

91-9 "Balance of other income and expenses".

Sub-account 91-1 "Other income" takes into account receipts of assets recognized as other income (paragraph in the wording put into effect starting from the annual financial statements for 2006 by order of the Ministry of Finance of Russia dated September 18, 2006 N 115n - see the previous version).

Sub-account 91-2 "Other expenses" takes into account other expenses (paragraph in the wording put into effect starting with the annual financial statements for 2006 by order of the Ministry of Finance of Russia dated September 18, 2006 N 115n - see the previous version).

Sub-account 91-9 "Balance of other income and expenses" is intended to identify the balance of other income and expenses for the reporting month.

Entries on sub-accounts 91-1 "Other income" and 91-2 "Other expenses" are made accumulatively during the reporting year. On a monthly basis, by comparing the debit turnover on subaccount 91-2 "Other expenses" and the credit turnover on subaccount 91-1 "Other income", the balance of other income and expenses for the reporting month is determined. This balance is monthly (final turnovers) debited from sub-account 91-9 "Balance of other income and expenses" to account 99 "Profit and loss". Thus, synthetic account 91 "Other income and expenses" balance on reporting date does not have.

At the end of the reporting year, all sub-accounts opened to account 91 "Other income and expenses" (except for sub-account 91-9 "Balance of other income and expenses") are closed by internal entries to sub-account 91-9 "Balance of other income and expenses".

Analytical accounting on account 91 "Other income and expenses" is carried out for each type of other income and expenses. At the same time, the construction analytical accounting for other income and expenses related to the same financial, business transaction, should provide an opportunity to identify financial result for each operation.

Account 91 "Other income and expenses" corresponds with accounts:
	by debit		on credit
	fixed assets		Installation equipment
	Depreciation of fixed		Investments in non-current
				Profitable investments v		materials
	material values		Farm animals and
	Intangible assets			Installation equipment
	Investments in non-current		material assets
		Preparation and acquisition
	materials		material assets
	Farm animals and		Primary production
		Semi-finished products
	Provisions for impairment		own production
	material assets		Auxiliary
	Preparation and acquisition		production
	material assets		Marriage in production
	Deviation in value		Serving
	material assets		production and economy
	value added tax
		Finished products
	acquired values		Goods shipped
	Primary production				Settlement accounts
	own production		Currency accounts
	Auxiliary		Special Accounts v
	production			Marriage in production		Transfers on the way
		Financial investments
	production and economy		Allowance for impairment
	Financial investments		investments in securities
	Allowance for impairment		Settlements with suppliers and
	investments in securities		contractors
	Settlements with suppliers and		Settlements with buyers and
	contractors		customers
	Reserves for doubtful		Reserves for doubtful
				Settlements for short-term		Settlements for short-term
	credits and loans		credits and loans
	Settlements for long-term		Settlements for long-term
	credits and loans		credits and loans
	Settlements with the budget		Settlements with accountable
	Calculations for social
	insurance and security		Settlements with personnel according to
	Settlements with personnel according to		other operations
		Settlements with founders
	Settlements with accountable		Settlements with different
			debtors and creditors
	Settlements with personnel according to		On-farm
	other operations			Settlements with different		Own shares (shares)
	debtors and creditors		Reserves for upcoming
	On-farm		expenses
		revenue of the future periods
	Own shares (shares)		Profit and loss
	Shortfalls and losses from
	damage to valuables
	revenue of the future periods
	Profit and loss

Non-operating income

Non-operating income includes all other receipts that are not sales income. In particular, these are:

• income from equity participation in other organizations (dividends);
• income from the purchase and sale of currency;
• donated property(works, services) or property rights, except for the cases specified in article 251 Tax Code of the Russian Federation;
• fines and penalties for violation by counterparties of the terms of contracts, as well as the amount of compensation for loss or damage;
• income in the form of interest on granted credits and loans;
• income received under a simple partnership agreement;
• income of previous years, which are revealed in the current year;
• the cost of materials and spare parts that are obtained during the dismantling or liquidation of buildings, equipment and other property of the organization;
• sum and term papers difference;
• profit adjustment amounts arising after an increase (for tax purposes) of contract prices due to their inconsistency with the market level.

A complete list of non-operating income is given in article 250 Tax Code of the Russian Federation. He is open. This means that types of income that are not directly named in it also increase the income tax base.

Elena Popova,

state councilor tax service RF I rank

The list of operations for which VAT must be charged depends on the taxation system that the organization applies.

BASIC

All organizations and entrepreneurs that apply the general taxation system are VAT payers. Foreign organizations operating in Russia are also recognized as VAT payers. This follows from article 143 and paragraph 2 paragraph 2 of Article 11 of the Tax Code of the Russian Federation.

Foreign organizations registered with tax office, pay the tax yourself. This follows from the provisions paragraph 1 article 143, article 83 , paragraph 7 article 174 of the Tax Code of the Russian Federation. If they are not tax registered in Russia, then VAT for them list organizations acting as tax agents at:

• purchase goods (works, services) from them ( P. 2 tbsp. 161 NK RF);
• sales in Russia of their goods (works, services, property rights) on the basis of agency agreements, agency agreements or commission agreements ( P. 5 st. 161 NK RF).

Charge VAT on the following transactions:

• sale of goods (works, services) on the territory of Russia and property rights(at the same time, the gratuitous transfer of goods, works and services is also considered a sale);
• transfer in the territory of Russia of goods (performance of work, provision of services) for own needs, the costs of which are not taken into account when calculating income tax ;
• performance of construction and installation works for own consumption ;

An exception is the compensation by which the customer reimburses the contractor (executor) for the cost of lost or damaged property. The Ministry of Finance of Russia recognizes that such amounts are not related to payment for the work (services) sold. Therefore, they do not need to be included in the VAT tax base ( letter of the Ministry of Finance of Russia dated 29 July 2013 No. 03-07-11/30128 ).

Chief Accountant advises: there are arguments that allow contractors (performers) not to pay VAT on compensation additional costs which are reimbursed by the customer in excess of the contract price. They are as follows.

If additional costs (for example, travel expenses contractor, the buyer's expenses for the elimination of defects in the delivered goods, etc.) are not included in the cost of the main work under the contract (initial estimate) and are reimbursed by the customer separately in the amount of actual costs, then the amount of compensation cannot be qualified as sales proceeds. The fact is that when additional expenses are reimbursed, the customer does not transfer ownership of any goods, results of work performed, services rendered (

There is no need.

When a professional footballer moves from one club to another, transfer contract. In particular, it stipulates the conditions and amount of compensation payments (transfer payments) associated with the transfer of an athlete. When executing this contract for the sale of goods (works, services) in the meaning determined by article 39 The tax code of the Russian Federation does not occur. Nor can such relations be considered as an operation for the transfer of property rights. Hence, compensation payments received under transfer contracts are not subject to VAT.
The legitimacy of this approach has been confirmed decision of the Presidium of the Supreme Arbitration Court RF from 27 February 2007 No. 11967/06 and letter of the Ministry of Finance of Russia dated 22 November 2010 No. 03-07-07/74 , in which the financial department shares the position of the Supreme Arbitration Court of the Russian Federation.

It should be noted that earlier the controlling departments took a different position. Representatives of the Ministry of Finance of Russia (in oral explanations) and the Russian Ministry of Taxation for Moscow in letter dated 2 November 2001 No. 02-11/50841 equated the compensation payments under the transfer contract to the payment for the professional training of the athlete. That is, to the revenue from the sale of services, which is subject to VAT ( sub. 1 p. 1 st. 146 NK RF). Some courts have upheld this view (see, for example, Decree of the Federal Antimonopoly Service of the Urals District of 23 August 2006 No. F09-7230/06-S2). However, with the release decisions of the Presidium of the Supreme Arbitration Court RF from 27 February 2007 No. 11967/06 and the advent letters of the Ministry of Finance of Russia dated 22 November 2010 No. 03-07-07/74 the previous clarifications have lost their relevance, and arbitration practice on this issue should become homogeneous.

Olga Tsibizova,

head of the department's indirect taxes

Consider the basic rules for the recognition and disclosure of information under IFRS on all kinds of remuneration provided to employees by employers.

IAS 19 Employee Benefits prescribes rules for recognizing and disclosing the different types of benefits that employers provide to their employees.

For example, you may have read or heard about the rewards that Google provides to its employees. To name a few of them (besides the usual salaries): free haircuts, gourmet cuisine, high-tech toilets, health care on site, travel insurance, fun things to do near the office, paid maternity leave, etc.

Google even provided "indemnity in case of death at work"- If a Google employee dies while on the job, their spouse continues to receive 50% of the employee's annual salary for the next decade.

But now let's look at all this from the point of view of the CFO. There are no problems taking into account such remuneration as wages or free haircuts. But what about this death benefit?

The problem here is that the remuneration is not paid while the employee is working in the company ... only then. And Google doesn't really know when employees die, and therefore when the liability is due.

And here IAS 19 plays its decisive role. It explains how to take into account different kinds employee benefits and how to represent them in financial reporting.

Why IAS 19?

The main objective of IAS 19 is to define the accounting and disclosure rules for employee benefits. IAS 19 requires a company to recognize:

• a liability if the employee rendered a service in exchange for remuneration with payment in the future; as well as
• expenses if the company derives economic benefit from the services rendered by the employee in exchange for remuneration.

This is a clear demonstration matching principle- recognition of expenses in the period of recognition of the corresponding income.

Thus, Google must recognize:

• a liability for his posthumous remuneration when the worker actually works (and not when he dies);
• expense when the results of an employee's work are consumed.

Classification of employee benefits.

IAS 19 classifies employee benefits into 4 main categories:

• Short-term rewards;
• Post-employment benefits;
• Other long-term remuneration;
• Severance allowances.

Short-term employee benefits= employee benefits (other than termination benefits) that are expected to be fully paid before the end of the 12-month period following the end of the annual reporting period in which employees render the related service.

Post-employment benefits= employee benefits (other than severance pay and current employee benefits) that are payable after the end of employment.

Other long-term benefits ("other long-term benefits")= all employee benefits other than current employee benefits, post-employment benefits and termination benefits.

Termination benefits= employee benefits given when an employee leaves the company as a result of:

• (a) the company's decision to terminate an employee before the employee's normal retirement date; or
• (b) an employee's decision to accept an offer of remuneration in exchange for leaving the company.

Now, what category do you think Google's posthumous reward falls into? Let's find out further.

What is short-term employee benefits?

Short-term employee benefits include all of the following (if payable within 12 months after the end of the reporting period):

• wages, salaries and social security contributions;
• annual paid leave and paid sick leave;
• employee participation programs in the company's profits ("profit-sharing") and bonuses (premiums); as well as
• non-monetary benefits (such as medical care, housing, cars, and free or subsidized items for employees).

All of Google's spending on free haircuts or gourmet meals probably falls into the latter category.

How to account for short-term employee benefits?

The Company recognizes short-term employee benefits as an expense in profit or loss (unless another IFRS requires or permits the benefits to be included in the cost of an asset).

Expenses are recognized in the amount of short-term employee benefits that are expected to be paid.

The accounting entry looks like this:

• Debit. Employee benefit expense (profit or loss) or cost of another asset (statement of financial position).
• Credit. Liability to employees or accrued expenses or cash if paid.

Short-term paid holidays: the expected value of current paid leave is recognized:

• when an employee provides services, which gives him the right to accumulate future paid holidays (in the case of accumulation of unused paid holidays);
• or when the employee took vacation.

Employee profit sharing and bonuses: an entity must recognize a liability for profit sharing and bonuses if

• the company has a legal or constructive (implied by it) obligation to make such payments; and
• a reliable estimate of this obligation can be made.

The above obligation exists if and only if the company has no actual alternative but to pay the consideration on this obligation.

What is post-employment benefits?

Post-employment benefits include benefits such as various pensions, retirement benefits, life insurance and post-retirement health care.

There are two main types of pension plans:

• Defined Contribution Programs;
• Defined Benefit Programs

It is extremely important to understand the difference between the two and classify your pension plan correctly, as each of them has a different accounting procedure..

What are defined contribution pension plans?

Defined contribution plans are post-employment benefit programs under which a company pays fixed contributions into a separate organization (pension fund).

However, the company assumes no legal or constructive obligation to make additional contributions if the fund does not have sufficient assets to pay all employee benefits due for employee services in the current and past periods.

How to account for defined contribution pension plans?

An employer must recognize its contributions to a defined contribution plan as an expense in profit or loss (unless another IFRS requires or permits the remuneration to be included in the cost of an asset).

If contributions are not expected to be fully repaid before 12 months after the end of the reporting period, they must be discounted.

What are defined benefit pension plans?

Defined benefit programs are post-employment benefit programs that are not defined contribution plans. Under such a program, the employer is required to pay a certain amount of compensation to the employee, and all investment and actuarial risk is thus borne by the enterprise.

This is where we come to the answer to the question about Google: without any further details, it can be assumed that Google's posthumous benefit is accounted for as a defined benefit plan under IAS 19 because:

• it is paid at the end of employment (after the employee dies);
• Google's commitment is not limited to contributions to any fund; instead, Google's commitment depends on the future wages and therefore the actuarial risk falls on Google.

Accounting for defined benefit programs is probably one of the most difficult questions in IFRS because it involves the inclusion of actuarial assumptions in the valuation of liabilities and expenses. Therefore, there are actuarial gains and losses.

In addition, liabilities are valued for the time value of money, as they may be repaid many years after employees have rendered the related service.

How to account for defined benefit pension plans?

Employers must complete the following steps to account for a defined benefit program:

Step 1: Determine the deficit or surplus.

The deficit or surplus is the difference between the present value of the defined benefit obligation and the fair value of the program assets at the end of the reporting period. To determine it, the company must:

• estimate the final value of the reward.
• use projected unit credit method to estimate how much workers earned for their work in the current and previous periods and include an estimate of demographic and financial variables ( "actuarial assumptions") into the calculations.
• discount the consideration amount to determine the present value of the obligation and the cost of services in the current period.
• subtract the fair value of any program assets from the resulting present value of the liability.

Step 2. Determine the amount for the statement of financial position.

Although it is sufficient to determine the amounts of benefits to account for a defined benefit plan, IAS 19 requires them to be presented as a single figure on the statement of financial position - the net amount of a defined benefit liability (asset) that is primarily a deficit or surplus. calculated in step 1, but adjusted for the effect of the asset ceiling.

Asset ceiling ("asset ceiling") represents the present value of any economic benefits accruing from the return of amounts from the program or the reduction of future contributions to the program.

Step 3: Determine the amount for the income statement.

The Company records the following amounts in the income statement:

• The cost of services of the current period= increase in the present value of defined benefit liabilities as a result of the provision of services by employees in the current period;
• Cost of past services= change in the present value of the defined benefit obligation in prior periods as a result of a program change or reduction;
• Any gain or loss on settlement of the obligation;
• Net interest income or expense on a defined benefit obligation (an asset).

Step 4: Determine the revaluation for the statement of other comprehensive income.

The Company records the following revaluation in the statement of other comprehensive income:

• Actuarial gains and losses= changes in the present value of defined benefit liabilities due to experience adjustments or changes in actuarial assumptions;
• Income from program assets, excluding amounts included in the net interest on the net defined benefit liability (asset).
• Any change in the impact of the asset limit.

What are other long-term benefits?

Other long-term benefits include the following items (unless expected to be settled within 12 months of the end of the period in which the employee provides the related service):

• long-term paid holidays such as sabbatical;
• anniversary or other long-term awards;
• long-term disability benefits;
• profit sharing and bonuses; as well as
• deferred reward.

How to account for other long-term benefits?

Because other long-term benefits are not subject to the same uncertainty as defined benefit plans, they are slightly easier to account for.

However, the entity must follow the same steps as for defined benefit schemes. The only difference is that all items such as the cost of employee services and revaluations net liability(assets) with defined benefits are recognized in profit or loss. Therefore, they are not recognized in other comprehensive income.

What is severance pay?

Termination benefits are something completely different than the previous 3 categories. Why? Because they are not provided in exchange for an employee's service; instead of this they are provided in exchange for stopping work.

However, be careful, because severance pay sometimes includes both a termination fee and an employee's service fee at the same time.

For example, a company is closing one of its manufacturing enterprises and offers a bonus of CU1,000. to all employees who will be laid off. But since this company needs qualified employees to complete the closing procedure, it offers a bonus of CU3,000. to every employee who will remain with the company until the closing date.

In this small example, the CU1,000 bonus paid to all laid-off employees is a severance pay, and the additional CU2,000 paid to all employees who stay until closing are employee service fees, in primarily classified as other non-current in accordance with IAS 19.

How to account for severance pay?

The key question here is WHEN the liability and termination benefit costs should be recognized. It will be:

• when the company can no longer refuse to pay these benefits (either there is a severance pay program or the employee accepts an offer of severance pay),
• when an entity recognizes restructuring costs (see IAS 37) and therefore offers termination benefits to employees.

The next question is HOW to recognize severance pay. It depends on the specific conditions of the rewards:

• if termination benefits are expected to be paid in full within 12 months of the end of the reporting period, then they are subject to current employee benefit requirements (therefore they are recognized as an expense in profit or loss on an undiscounted basis);
• if termination benefits are not expected to be settled in full within 12 months after the end of the reporting period, then they are subject to the requirements of other long-term employee benefits (therefore, they are recognized as an expense in profit or loss on a discounted basis).

Significant items of expenditure of any company are salaries of employees, bonus funds, expenses for medical and pension insurance. If Russian rules accounting regulate only the procedure for reflecting the cost of staff salaries and contributions to the pension fund, international standards describe the procedure for accounting for all types of remuneration and financial compensation paid to an employee.

Accounting and reporting of employee benefits are carried out in accordance with IAS 19 Employee Compensation, approved in 1983. Since then, this standard has undergone many changes. The latest revisions were accepted in December 2004. In addition to IAS 19, IFRS 2 Equity Payments was developed in February 2004. Until that time, part of the provisions of IFRS 2 were disclosed under IAS 19, but then they were supplemented and separated into a separate standard, which came into force on January 1, 2005.

IFRS 19 Employee Benefits applies to all types of remuneration and financial compensation paid by an employer to an employee in exchange for services rendered. The standard divides all employee benefits into three main groups: short-term benefits, post-employment benefits and other long-term benefits.

Short-term employee benefits

Short-term benefits include any payment to employees made up to twelve months after the end of the period in which the work was performed. For instance:

• wages accrued as the work is performed;
• non-monetary remuneration (for example, medical costs, subsidies for housing construction, providing company car, payment for travel and meals);
• annual leave and sick leave;
• profit sharing and bonuses.

Short-term employee benefits are recognized in the financial statements in the period when the related work was performed. Benefits are written off as an expense in the income statement and are recognized as a liability to the employee until payment is made.

At the time of payment of the short-term employee benefit, the previously recognized liabilities of the company are extinguished. Non-accumulative leave expenses should be reported in the period in which the leave was taken by the employee. If the staff of the company has the right to accumulate unused vacation or medical insurance, the costs are recognized over the period the work is performed.

Often, accumulated vacations can be compensated: an employee can receive monetary compensation instead of unused vacation days. In this case, the company is required to make additional accruals to the recognized accumulative vacation liability.

The amount of additional accruals is determined based on the practice of using accumulated vacations. For example, if on average per year each employee of the company does not use two days of vacation and receives additional payments for this, then the amount of the required additional accruals, according to IAS 19 Employee Benefits, should be equal to payments for two days of vacation for each employee.

Personal experience
Sergey Moderov,
The company reflects the expenses for the formation of the employee's vacation fund during the period when the employee works in the company. If he did not take advantage of this vacation, then the costs are reflected as a liability of the company to the employee. At the moment when the employee uses the accumulated vacation, the obligations are repaid.

Bonus payments, the accrual of which depends on the company's profit, are recognized in the year in which the corresponding profit is shown in the financial statements. In order to be able to recognize the cost of the expected payment of premiums, two requirements must be met:

• the existence of an agreement obliging the company to make such payments. Employment contracts impose obligations on employees that must be taken into account when reporting bonus payments. For example, if an employee terminates an employment contract, then the bonus, defined as a percentage of the annual profit of the enterprise, is not paid to him. In this case, when assessing the obligation to pay bonuses, it is necessary to predict staff turnover and, accordingly, reduce the amount of obligations to pay bonuses to employees;
• the premium obligation can be measured reliably. It is necessary to pay attention to the fact that the participation of employees in profit is regarded as a payment for services, therefore the company's costs for the payment of bonuses to personnel are recognized as an expense, and not as a distribution of net profit.

Post-employment benefits to employees

Most of the post-employment benefits include pensions. Agreements under which a company pays employee benefits are called retirement plans. In accordance with IFRS 19, post-employment benefits are recognized in the financial statements as:

• the company's employee severance pay obligations and assets, if contributions have already been made to employee severance pay funds (pension funds); operating expenses of those reporting periods in which they were paid to employees.

Under the standard, all company pension plans can be divided into two categories: defined contribution and defined benefit.

Defined Contribution Plan

Under a defined contribution pension plan, the employer makes regular contributions to the pension fund. They can be calculated as a percentage of the employee's salary or as fixed amounts. The amount of the pension due to be paid is determined by the amount of funds accumulated by the date of the employee's retirement. If the performance of the pension fund is unfavorable, then the employer is not obliged to cover the shortage of funds for the payment of pensions.

Personal experience
Sergey Moderov
The state pension plan, which is mandatory for all enterprises, should be accounted for in the same way as group pension plans. But, in my opinion, it would be more correct to reflect payments to state pension funds as part of tax payments and account for them as period expenses. The fact is that the companies themselves regard such payments as a tax, and not as a pension provision for employees. The same businesses that really deal with issues pension provision employees, use the services of commercial pension funds.

Mikhail Gribov, Senior Specialist of the International Projects Department of Baker Tilly Rusaudit
In Russia, public pension plans are classified as defined contribution plans because they involve fixed contribution payments. Once such contributions have been paid, the company is not under any obligation to make additional contributions unless the fund has sufficient funds to provide employee pensions. Accordingly, the company recognizes in the financial statements paid contributions as expenses of the reporting period. If contributions are not paid, they are treated as a liability of the company less any contributions previously made.

The company's expenses on pension plans are recognized in the income statement and reduce the company's operating income. This type of expense is treated as an operating expense.

When using a defined contribution program in explanatory note the following information must be disclosed:

• the nature of the program being used (ie, in this case, a defined contribution program);
• expenses of the reporting period;
• any contributions due or prepaid at the reporting date.

Defined Benefit Plan

The fundamental difference between defined benefit pension plans is that the amount of retirement benefits is determined as a percentage of the last salary and is guaranteed by the employer. Benefits are independent of contributions paid and are not directly related to contributions made under such a program. The amount of contributions to the pension plan depends on the average salary during the entire career of the employee and the last salary. The company bears the risk associated with the management in cash deducted from future pension payments. If the pension money management investment program makes a loss, the company is obliged to make up for the shortfall in funds. This obligation of the enterprise can follow both from concluded contracts with the personnel, and from traditional obligations 1 .

The profit received from the investment of pension funds remains at the disposal of the enterprise. As a rule, at the expense of the received profit, deductions to the pension program are reduced. When implementing pension plans with defined benefits, the company independently determines the amount of pension contributions.

Personal experience
Sergey Moderov
In American practice, the use of defined benefit pension plans is widespread. An example would be General Motors, which created its own pension fund. If the performance of the fund is unsatisfactory, then the company will cover any losses of the fund. In Russian practice, there are also known cases of creating their own pension funds, for example, the Gazprom company created the NPF Gazfond.

The costs of managing defined benefit plans fluctuate from year to year, which can lead to significant accounting challenges. This is due to the fact that the company reflects pension accruals based on a number of assumptions - the so-called actuarial assumptions:

• life expectancy of an employee after retirement;
• last salary;
• inflation rate;
• return on investment;
• new participants in pension programs, etc.

It should be noted that the provisions of the standard dealing with the accounting for defined benefit plans are the most complex. Due to the fact that in Russian practice there are few examples of the creation of pension plans with defined benefits, we will not consider them in detail. Note that the use of defined benefit plans is available not only large companies. In world practice, there are cases when several companies merge to form a defined benefit pension plan and bear joint and several liability for the effectiveness of the created pension program.

Other long-term employee benefits

Other long-term employee benefits include:

• long-term paid holidays;
• seniority remuneration;
• long-term disability benefits;
• bonuses and other remuneration payable twelve months after completion of work.

Long-term benefits are recognized as a liability (or asset, if deductions have already been made) of the company to employees at the present value of the expected benefits.

Expert opinion
Sergey Moderov
Eligibility for the award after a specified period of time should be assessed as of the date the agreement is entered into. If an employee has worked for a year and continues to work, the bonus fund is replenished by the fair value of the liability. Until the liability is settled at each reporting date, it is remeasured at fair value with the allocation of changes to the profit or loss of the period.

If the present value of the future payment obligation exceeds the fair value of the assets this plan, then the difference is recognized as a liability of the company for additional charges. If the bonus is not paid or the employee is dismissed before the bonus is issued, the accruals made to the bonus fund will be credited to the profit of the period when the agreement was terminated or a decision was made not to pay the bonus.

Regarding long-term rewards net worth contributions to the bonus fund, as well as the expected income (statutory rate of return) on the contributions made, are recognized by the company as an expense in the income statement. If the employee does not achieve the set goals and the bonus is not paid, the deductions made are written off in the income statement as other company income.

Russian practice of accounting for employee remuneration

It should be noted that there are no analogues of IFRS 19 “Employee Benefits” in Russian accounting. According to Maria Sukonkina, head of the IFRS consolidated financial statements department of AK Transnefteprodukt, RAS regulates only the procedure for recording personnel costs and contributions to the State Pension Fund.

Expert opinion
Igor Averchev, senior project manager of the company "MAG CONSULTING"
Most of the provisions of IFRS 19 are devoted to accounting for defined benefit plans, which is practically not found in Russian companies. Most companies, to use the terminology of IFRS 19, implement defined contribution pension plans, that is, make fixed contributions to the state pension fund.

Principles similar to IAS 19 can be found in documents governing the activities of commercial pension funds. For Russian enterprises creating your own pension programs for employees is currently very rare, but it can be expected that this Western experience will be used in Russia in the near future.

Share-based payments

Sergey Moderov, department head financial accounting on international standards Institute of Entrepreneurship Problems (St. Petersburg)

IFRS 2 Share-Based Payments is more focused on companies that use share-based executive compensation schemes 2 . The application of this standard is also necessary in cases where companies transfer own shares in exchange for goods or services of other enterprises. The purpose of the standard is to determine how payments using shares are reflected in the financial statements and their impact on financial condition company and its financial results.

Share payments

Under IFRS 2, all share payments are carried at fair value.

The fair value of the services rendered by an employee of the company is estimated by one of the methods - direct or indirect. The direct method involves measuring the fair value of services rendered by an employee of the company or goods received by the company. It is mainly used when a company purchases goods in exchange for its own shares or equity instruments.

In most cases, it is not possible to determine the fair value of services, so an indirect valuation method should be used.

In accordance with the indirect method, the cost of services rendered by the employee is considered to be equal to the fair value of the shares or other equity instruments transferred to him at the date the parties agree on the terms of the transaction. If the agreement for a transaction involving payments using equity instruments is subject to shareholder approval, then the fair value of the equity instruments must be measured at the time of shareholder approval.

The fair value of equity instruments transferred to an employee is considered to be equal to their price for stock exchange. If such information is not available (the company's shares are not listed on the stock exchange), then a certified appraisal company must be involved in the fair value assessment. Motivation schemes are widespread when an employee is given not shares of the company, but options to purchase them. Options are also measured at fair value. The standard recommends using the Black-Scholes model 3 to measure fair value.

Cash-settled share-based transactions

It is not uncommon for an employee to receive a cash reward, but the payout is tied to the company's stock price. For example, subject to the achievement of the set goals, the employee is entitled to remuneration in the amount of the value of 1% of the company's shares. In this case, the shares are not transferred to the employee, but the corresponding cash bonus is paid. The enterprise should reflect such obligations to the personnel in its financial statements and regularly reassess them at each reporting date. The change in the value of liabilities is charged to the company's profit or loss for the reporting period.

Conditional and unconditional grants of equity instruments

An unconditional right to receive an equity instrument implies that the services have already been rendered by the employee. Therefore, at the date the unconditional grant of equity instruments is entered into, the entity recognizes receipt of services in full and records the associated liability and increase authorized capital in your reporting.

Much more common, however, are reward schemes whereby equity instruments are provided to employees on the condition that the company's goals are met. For example, part of an employee's incentive package may include the right to purchase company shares at a fixed price (an option to purchase shares) in three years, subject to a 10% increase in the company's value. In other words, the employee will provide services to the company for some period. In order to fairly reflect the cost of employee benefits, the value of the equity instruments transferred should be recognized as an expense on a straight-line basis and the increase in the company's liability should be shown. If the condition is not met, then the recognized obligations to the employee are written off to other income of the company, including reporting period when the performance of the employee was assessed and a decision was made not to pay the bonus.

Information disclosure

For equity-based awards, the entity's accounts must describe the transactions that occurred during the period to grant equity instruments. It is also necessary to reflect the terms of the agreements concluded, the term of their execution and the method of settlement on them (in cash or equity instruments).

1 When accounting pension contributions and the cost of remuneration of employees, the enterprise must take into account not only those obligations that have a legal justification (contracts, agreements, intercompany resolutions), but also any other payments that have developed in practice. For example, if a company pays a lump sum bonus to employees who are retiring, although this is not stipulated in the employment contract, then such bonuses will be considered a traditional obligation.

2 For more information on using equity-based motivation tools, see the article “How to Motivate Top Managers” ( "Financial Director", 2005, No. 3) . - Note. editions.

3 For more details, see the article “Evaluation of investment projects using the real options method” ( "Financial Director", 2004, No. 7-8). - Note. editions.