There are expenses, but no income. What to do with expenses if there is no revenue. What to do with expenses if there is no income Why my income has become small

First of all, it should be noted that revenue represents money received by the enterprise as a result of the sale of products, goods or services. A decrease in revenue is characterized by a decrease in cash flow, received by the enterprise from the sale of products (goods, services), which can be caused by a number of objective or subjective reasons.

Revenue is very important for an economic entity, as it is one of the main sources of financing activities. In this regard, the management of the organization must regularly monitor any changes in this indicator and respond to them in a timely manner.

REFERENCE. There are situations when the management of a company deliberately reduces sales revenue (for example, in order to conquer new markets, the price of a particular product is reduced, which subsequently affects the amount of revenue).

What factors influence this indicator?

It should be noted that the amount of revenue is influenced by many different factors, which can be divided into two large groups:

Reasons why the fall occurs

The following are the most common reasons for a decrease in revenue:

1. Product obsolescence– sooner or later the market becomes saturated with a certain type of product, which causes a decrease in sales volumes and revenue.

   IMPORTANT. An entrepreneur should promptly update the range of products produced, giving it new quality characteristics or creating another product.

2. Seasonal drop in demand– there are specific types of goods, the demand for which fluctuates depending on the time of year. For example, swimsuits will be sold much more actively in the summer. However, in winter the demand for them drops sharply.
3. Increase in cost– for example, an increase in the price of raw materials and materials can significantly increase the cost of manufactured products. At the same time, it is not always possible for a commodity producer to raise the price, as this can reduce the competitiveness of the product. As a result, there is a decrease in sales revenue.
4. Weak advertising and marketing policy– today active advertising is one of the main factors contributing to an increase in sales.
5. Decrease in production volumes– for example, during a crisis, many enterprises significantly reduce production volumes, which ultimately affects the amount of revenue, etc.

For clarity, let’s look at the reasons for the decline in revenue using the example of a construction company and a store. In construction, revenue may fall for the following reasons:

If revenue has fallen in a store, this may be due to the following reasons:

• incompetence and rude treatment of sellers;
• weak promotional activities;
• lack of “tasty” offers, various discounts, promotions and bonuses;
• narrow range of products;
• unreasonably inflated prices (in this case we are talking about stores designed for a wide range of consumers), etc.

Step-by-step instructions: what to do if your income level has decreased?

So, if revenue falls, the following steps should be taken:

1. First, it is necessary to analyze the current state of revenue at the enterprise, as well as identify the degree of deviation of its actual indicators from the planned ones.
2. It is necessary to understand the main reasons that caused the decrease in revenue. This stage is very important, since timely identified causes of failures in the enterprise’s activities will allow the necessary measures to be quickly taken to eliminate them.
3. Having identified the main reasons for the decline in revenue, you should begin to select specific ways to increase it.

   The following ways to increase sales income can be identified:

   • reduction of production costs;
   • increase in production volumes;
   • conducting an effective advertising policy;
   • entering new markets;
   • expansion of the range of goods, etc.
4. Implementation of specific measures to increase revenue. This stage involves:
   • setting specific goals;
   • control over the implementation of assigned tasks;
   • analysis of the results obtained.

What not to do?

It should be noted that there are a number of prohibited techniques that are not recommended to be used when revenue is falling. Otherwise, the situation can only get worse. So, let's look at them in more detail:

To summarize, systematic decline in revenue is a serious cause for concern. At the same time, you should not make hasty decisions. First, you need to carefully analyze and weigh everything, and only then take specific actions.

You, of course, know the situation when you invest and invest money in advertising, in renting premises, rearranging equipment in a store, but sales have not grown and are not growing. You have a good product (or service), reasonable prices, but customers don’t understand this and prefer cheaper and lower quality products. Where's the justice?

There are no sales, which means no profit, and your business may soon turn into a hobby that you do at your own expense. What to do? To improve something, you first need to find out what exactly and what problems exist in your business.

Another important problem for small and medium-sized businesses is when a network company comes to their region with its multimillion-dollar advertising and marketing budget and begins to offer goods and services at a lower price. Such companies have huge discounts on bulk purchases and can afford to hire the best specialists in all areas. Your business is like a drop in the ocean for them, and they can even afford to work for a very long time at zero or even in the minus, waiting for local firms like you to not stand it and leave the market.

How to resist online Godzillas? What will keep you afloat?

There is only one answer - a well-built sales and marketing system will not only allow you to survive in the market, but will also ensure good sales growth for your company.

In this case, there is a very apt saying: There is a whole ocean of opportunities to earn a big income. The problem is that most people approach this ocean with a teaspoon.

Most small businesses don't pay much attention to marketing at all. This is the biggest mistake that is made.

So that you know what is stopping your business from growing, here are 10 key problems inherent in any business, and if you solve them, you will get amazing results!

1. Businessmen don't know their numbers.

Check yourself - do you know what your revenue and profit were for the past month? How much did you keep for yourself “to live on”, and how much did you invest back into the business? Believe me, these are not the numbers that influence increased sales! The overwhelming majority of entrepreneurs have no idea how much each client costs them, how much they earn from each client, from each product, from each group of goods. What material result does each advertising campaign bring? There are no reports, no systems to track the effectiveness of advertising. As a result, huge amounts of money are wasted on unnecessary advertising.

Without knowing the numbers, it is very difficult to make decisions. As a result, the decision is made not based on how much advertising earned, but simply “how much did we earn in total.” But this is completely wrong! Knowing the numbers of how much profit this or that advertisement brought in, you can decide which advertisement to invest in next time.

2. Trying to compete on price.

This is another challenge for SMEs - trying to compete on price. What does an entrepreneur do when he sees a similar product from competitors? That's right, he reduces the price of his product and thereby spoils the market for himself and his competitors. Endless dumping does not lead to anything good.

Few people understand that sometimes selling at a higher price is easier, and if you use two- or three-step sales, it turns out to be even better.

Selling at a high price is much easier and more profitable. Let there be fewer clients, but there will also be fewer problems, costs will be reduced, and as a result there will be more money. Build your sales in such a way that customers value you not for your low price, but for the value you give them.

3. Lack of work with the existing customer base, with a constant desire to increase it.

This problem lies in the fact that the entrepreneur already has a decent base - 500-1000-1500 clients, but he does not know what to do with it. A client came, bought something, was added to the database and left. That's it, this is where the contact with the client ends.

What to do next? The base doesn’t actually bring in any money, but, as you know, your own customer base is actually a “golden asset” for any business. It has been proven that selling to an existing client is 5-7 times cheaper than attracting a new one! Everyone wants to sell to new clients, but few work with old ones, although with the right approach you can earn many times more from them.

4. The system for converting leads into actual buyers is like a leaky bucket.

The essence of the problem is that no one really deals with the clients who apply - the client came, looked and left, the money is lost. If you focus on closing every person who comes in or calls to buy, you'll immediately make extra money for your business!

Remember, if the client made an effort and called you or came, he is actually ready to make a purchase, you just need to push him to do it with the right actions.

5. The entrepreneur has no desire to change anything in his business.

By nature, it is human nature to be lazy. Few people are ready to “move mountains” today just to get results tomorrow. Everyone wants results now and immediately! And strategies to increase sales work gradually and not immediately. Therefore, many are limited by the existing state of affairs and available income. People are simply wallowing in the swamp of their business and do not understand how to take their business to the next level.

6. Many businessmen, instead of working “on” their business, work “in” their business.

Entrepreneurs spin like a squirrel in a wheel, and the more they spin, the more clients come to them, the amount of work grows, it requires more and more additional time, and there are only 24 hours in a day. The result is a vicious circle.

It turns out that the person simply hired himself to work, but thinks that he has a “business”.

You need to understand that business for business's sake is the wrong approach. Business should be done to achieve your goals!

The problem can be solved by building new management systems and “distance” from the business of its owner.

7. Direct sales have practically stopped working.

Everyone starts by trying to sell directly, but now this method no longer works. If you only use this method in your business, alas, you are doomed. Real sales are made when the two-step sales system is used. For example, you can not just sell, but first train clients, then next time they will come to you and buy.

8. Your site doesn't sell.

This problem is especially relevant for small businesses. An entrepreneur either does not have his own website, or formally has this website, but in fact it does not contribute to sales. A website is quite a powerful resource for business nowadays. Having a good “selling” website can attract enough customers, even in a small city.

By the way, in the West they already say that if you are not on the Internet, then you are not in business!

9. Perfectionism.

This problem lies in the fact that you first try to make all processes ideal, and then just launch them, and then everything will be fine. Making it perfect can be done endlessly and you will never start the process. You need to make some kind of prototype and launch it, and then you can improve it. Remember how software products are released - first a beta version, then they begin to release new and new versions, improving the shortcomings, while simultaneously carrying out the sales process.

10. “I know this won’t work for me.”

There are entrepreneurs who are initially confident that one strategy or another is ineffective. Often, they didn't even try to do something. That's just what they think. In fact, everything works, you just need to take it and do it, take it and do it. The effect depends on the number of attempts.

For those who do not want to test new strategies, there is only one answer - if you want to get paid like everyone else, do like everyone else! If you want to get like others, do it differently!

So now you know what is stopping your business from growing. All that’s left to do is implement strategies to increase sales and solve problems, one after another, systematically and persistently.

Get caught in the gap

Get caught in the gap

A cash gap is when a company temporarily does not have money to pay salaries, rent or goods to suppliers. It’s as if there is money, but not from the company, but, for example, from a client who pays for your services in installments or from the same supplier who took money in advance for goods that have not yet been delivered.

A cash gap always hurts. Everyone calls and asks “Where is my money?”, and you can’t do anything, you blush and blink your eyes.

“It seems like it’s time to get some salve for cash flow gaps.”

Most often, ruptures occur for two reasons:

1. Profit is calculated incorrectly

Typically, profit is calculated something like this: how much money came into the account minus expenses for the month, and all that remains is the company’s profit. With this approach, it won't take long to fall into a cash gap.

To correctly calculate profit, you need a profit and loss statement. It takes into account obligations incurred with counterparties, taxes, loans and depreciation. In simple terms - how much your company owes and how much you owe. It doesn’t matter whether you have already been paid or not. If you did the work, you owe it, if you didn’t do it, you owe it.

2. They don’t plan for the future.

2. They don’t plan for the future.

A partner calls and says that the supplier is offering a big discount if you purchase the goods today. Without thinking twice, you agree. After 5 days you have to pay rent and pay salaries, but there is no money. The thoughtless spending led to a cash gap.

Ointment for cash gaps - payment calendar. It shows who will pay, when and to whom, and how much money will be in the account on any given day. The calendar shows in advance whether there will be a cash gap. This gives time to prevent it.

All articles Recognition of expenses without income: accounting and taxation (Sysoev N.I., Kharchenko S.V.)

The article discusses how to legally recognize expenses associated with organizing a business aimed at generating income, if in the corresponding period of their implementation the income itself was not received.

A comparative analysis and explanations are given on the most pressing issues related to the procedure for recognizing expenses without income in tax and accounting.

The features of recognition of expenses in tax and accounting are considered using the example of three situations:
1) when the organization does not carry out activities;
2) when an organization opens a new enterprise or a new type of activity;
3) when the organization operates, but did not receive income in a given period.
The results of the work can be applied both at the development stage and during the work of commercial organizations.
The practical significance of the article lies in recommendations for improving the accounting process for recognizing expenses in accounting and tax accounting in various commercial organizations, regardless of the field of activity, legal status and form of ownership.

The Tax Code of the Russian Federation determines the composition of income and expenses and what does not apply to income and expenses. All this leads to contradictions with financial accounting. The Tax Code of the Russian Federation implements the rule of the American engineer H. Gant, which states: “Everything that is expediently spent is an expense.” The meaning of H. Gantt's rule sharply contrasts with the traditional opinion expressed by D. Nicholson and D. Rohrbach: “The cost of production should include all the costs of running an enterprise if they want to get the actual cost.” The appearance of ch. 25 of the Tax Code of the Russian Federation “Organizational Profit Tax”, effective from 01/01/2002, finally separated the accounting of financial results and the accounting of the same results for profit tax purposes. The legality of such a division poses a major practical problem.
On the one hand, the composition of expenses recognized for tax purposes, with the entry into force of Ch. 25 of the Tax Code of the Russian Federation is initially not limited, but, on the other hand, the list of costs that are not recognized for corporate income tax purposes is also not limited.

In practice, this has led to significant problems, from resolving fundamental issues related to Art. 252 of the Tax Code of the Russian Federation, the taxpayer’s ability to recognize expenses in each specific case will depend.
According to paragraph 1 of Art. 252 of the Tax Code of the Russian Federation, in order to be recognized for profit tax purposes, expenses must simultaneously satisfy three main criteria:
- expenses must be incurred to carry out activities aimed at generating income;
— expenses must be economically justified;
— expenses must be documented.

It is important to answer the question whether it is possible to recognize expenses associated with organizing a business aimed at generating income if in the corresponding period of their implementation the income itself was not received.
The position of official bodies on this issue is ambiguous. Thus, in Letter of the Ministry of Finance of Russia dated October 13, 2006 N 03-03-04/1/691, financiers came to the conclusion that during the period of absence of statutory activities, the organization does not have the right to write off expenses to reduce taxable profit. According to financiers, all expenses incurred should be compensated from contributions (contributions) of the founders (participants).
The opposite position is expressed in Letters of the Ministry of Finance of Russia dated December 8, 2006 N 03-03-04/1/821 and the Federal Tax Service of Russia dated April 21, 2011 N KE-4-3/6494, which state that Ch. 25 “Organizational Profit Tax” of the Tax Code of the Russian Federation does not make the procedure for recognizing expenses dependent on whether the organization had sales income in the current reporting period or not. An organization has the right to take into account expenses for profit tax purposes both in the period of receipt of income and in the period in which the organization does not receive income, provided that the activities carried out are generally aimed at generating income.
The Tax Code of the Russian Federation allows an organization to independently distribute costs associated with production into direct and indirect (Clause 1, Article 318 of the Tax Code of the Russian Federation). The order of distribution of costs affects the amount of expenses that can be taken into account when calculating income tax in a specific reporting or tax period. Thus, direct costs are included in the cost of production and are written off as they are sold. In turn, indirect costs are fully taken into account in the current reporting period (clause 2 of article 318 of the Tax Code of the Russian Federation).
Methods for allocating expenses in Ch. 25 of the Tax Code of the Russian Federation is not contained, therefore the organization has the right to use the method that is most beneficial to it. Some federal courts, for example, the Federal Antimonopoly Service of the Northwestern District (Resolution dated October 4, 2011 N A56-55568/2010), come to this conclusion. However, there is another point of view. Back in 2010, the Supreme Arbitration Court of the Russian Federation recalled that “The Tax Code of the Russian Federation does not consider the distribution of expenses as a process that depends solely on the will of the company’s management.” That is, expenses cannot be attributed to direct or indirect without any justification.
This approach worked to the advantage of the tax authorities; they began to limit the composition of indirect costs in the production of products. They justified their position by the fact that “the right to independently determine the list of expenses requires the taxpayer to justify the decision” (Letter of the Federal Tax Service of Russia dated February 24, 2011 N KE-4-3/2952@). In particular, according to tax authorities, direct expenses include:
— fuel and electricity;
- package;
- work and services performed by auxiliary units.
Some types of raw materials are difficult to distribute between main and auxiliary production. Therefore, organizations enshrine in their accounting policies the provision that specific types of raw materials are taken into account monthly as part of indirect costs in the amount of actual costs.
A situation may arise when, from the beginning of the year, the organization decided to change the list of direct expenses, fixing it in its accounting policies. Due to these changes, part of the costs that were previously direct will be considered indirect from the beginning of the year. According to the Ministry of Finance, costs that fall on work in progress and unsold products will not be taken into account. In the new tax period, they will also have to be written off as goods (work) are sold. And you can write off at a time only those expenses that have been incurred since the beginning of the new tax period (Letters of the Ministry of Finance of Russia dated 09.15.2010 N 03-03-06/1/588, dated 05.20.2010 N 03-03-06/1/336).

The organization determines independently whether costs are classified as direct or indirect for each production cycle.

If certain resources, according to technological regulations, are not included in the production cycle and are not an integral part of it, then the costs for them can be taken into account as part of indirect costs.
An organization has the right to write off direct expenses for profit tax purposes only in the period when revenue is reflected in taxable income, therefore it will not be possible to recognize direct expenses without sales, and therefore without revenue (Letter of the Ministry of Finance of Russia dated 04/09/2010 N 03-03-06/ 1/246). But the Tax Code of the Russian Federation allows indirect and non-operating expenses to be written off at a time in the period in which they were incurred (clause 2 of Article 318 of the Tax Code of the Russian Federation). That is, in the absence of revenue, indirect expenses are recognized as losses, which will reduce the income received later (Letter of the Ministry of Finance of Russia dated 03/06/2008 N 03-03-06/1/153).
The Letter of the Federal Tax Service of Russia dated April 21, 2011 N KE-4-3/6494 states that expenses are recognized as any economic expenses confirmed by documents drawn up in accordance with the legislation of the Russian Federation, provided that they were incurred to carry out activities aimed at generating income . In response to the question about a newly created organization, the main activities of which are production and transmission of thermal energy, but currently has no income, due to the norm of paragraph 5 of Art. 270 Tax Code of the Russian Federation, expenses associated with the creation of depreciable property, as well as its reconstruction, are not taken into account when determining the tax base for corporate income tax.
No matter how well the norms of Ch. 25 of the Tax Code of the Russian Federation, problems with its application in practice would still arise. This is due to the unlimited variety of activities and business transactions, and to the interpretation of the same words in different ways.
Unfortunately, Ch. 25 of the Tax Code of the Russian Federation is another example of insufficient elaboration.
In accounting, the problem is different. The Russian Ministry of Finance issued Order No. 33n, which put into effect the Accounting Regulations “Organization Expenses” PBU 10/99 from 01/01/2000. This Regulation not only replaced the concept of “cost” with the term “expenses”, but also marked a revolution in views on the costs of an organization in the domestic theory of accounting. According to clause 2 of PBU 10/99, expenses are understood as a decrease in economic benefits as a result of the disposal of assets (cash, other property) and (or) the occurrence of liabilities leading to a decrease in the capital of this organization, with the exception of a decrease in contributions by decision of participants (owners of property) .

To recognize expenses in accounting, the conditions established by clause 16 of PBU 10/99 must be met:
— the expense must be made in accordance with a specific contract, the requirements of legislative and regulatory acts, and business customs;
— the amount of expense can be determined;
- there is confidence that as a result of a particular transaction there will be a decrease in the economic benefits of the organization.
Please note that in order to recognize an expense, all of the above conditions must be met. If at least one of the conditions is not met, then the organization’s accounting records recognize not an expense, but a receivable.
Paragraph 17 of PBU 10/99 establishes that expenses are subject to recognition in accounting, regardless of the intention to receive revenue, operating or other income and the form of the expense (cash, in kind and other).
In accounting, all expenses of an organization, depending on the nature, conditions of implementation and directions of its activities, in accordance with paragraph 4 of PBU 10/99, are divided into expenses from ordinary activities and other expenses. Other expenses are in turn divided into expenses:
— operating rooms;
- non-operating;
- emergency.
Even before receiving income, the newly created organization incurs expenses for renting office space, expenses for paying salaries to officials and employees of the organization, producing seals, letterheads, purchasing office furniture and equipment. If an organization plans to begin its activities in the month of its registration, then it must take into account these expenses in its account. 26 “General business expenses”, and if it is a trading organization, then on the account. 44 “Sales expenses”. If the organization does not receive income in the month of its registration, then these expenses must be written off as a debit to the account. 97 “Future expenses”, since in the debit of the account. 90 “Sales”, such expenses cannot be written off, or if there is no connection with income, they can be debited to the account. 91 “Other income and expenses.”
If the enterprise carries out production activities, then in the accounting policy for accounting purposes it is necessary to indicate the procedure for accounting and writing off direct (account 20 “Main production”) and indirect expenses (costs of general production and general economic purposes, which are reflected in the debit of account 25 “General production expenses " and 26 "General expenses" respectively), as well as the cost calculation method (custom, standard, etc.).
According to the Chart of Accounts for accounting the financial and economic activities of organizations, the expenses recorded on the account. 26 “General business expenses” are written off, in particular, to the debit of the account. 20 “Main production”, 23 “Auxiliary production” (if auxiliary production produced products and work and provided services to the outside), 29 “Service production and farms” (if service production and farms performed work and services to the outside). These expenses, as semi-fixed ones, can also be written off as a debit to the account. 90 “Sales” (“direct costing”). Consequently, general business expenses can be written off either to the account. 90 “Sales”, or to production accounts. The write-off method chosen by the enterprise must be provided for in the accounting policy.
However, many accountants doubt the legality of closing the account. 26 on account 90 in case the proceeds are written off according to the account. 90 "Sales". Therefore, in practice, other options appear - write off expenses from the account. 26 in the absence of revenue in the debit of the account. 91 “Other income and expenses”, so that later, when the revenue is received, write off as a debit to the account. 90 "Sales".

Since this situation is not directly regulated in accounting regulations, the organization must make an independent decision and consolidate it in its accounting policies. But it is necessary to pay attention to the fact that the use of the account. 91 “Other income and expenses” is incorrect, since administrative expenses are expenses for ordinary activities, and not other expenses, and the fact that the organization does not yet receive revenue does not change their qualification.
Based on the foregoing, we can conclude that if an organization incurs costs for the development of project documentation associated with the creation of depreciable property, then these costs form the initial cost of such property in the established Chapter. 25 of the Tax Code of the Russian Federation according to the procedure and are taken into account for profit tax purposes through the depreciation mechanism.
Other costs, including the maintenance of office space, salaries of management personnel, etc., even in the absence of income, may be classified as indirect expenses recognized for tax purposes in the current reporting period, if the criteria of paragraph 1 of Art. 252 of the Tax Code of the Russian Federation.

Bibliography

Blank I.A. Profit management. 2nd ed., expanded. and additional Kyiv: Nika-Center, Elga, 2002. 752 p.
2. Larionov A.D., Nechitailo A.I. Accounting and tax accounting of financial results. St. Petersburg: Legal Center "Press". 2002. 318 p.
3. Tax Code of the Russian Federation (part two) dated 05.08.2000 N 117-FZ.
4. Nikolaeva S.A. Income and expenses of an organization: practice, theory, prospects. M.: Analytics press, 2000. 208 p.
5. On approval of the Accounting Regulations “Income of the Organization” PBU 9/99: Order of the Ministry of Finance of Russia dated 05/06/1999 N 32n.
6. On approval of the Accounting Regulations “Expenses of the Organization” PBU 10/99: Order of the Ministry of Finance of Russia dated 05/06/1999 N 32n.
7. Economic theory / Ed. IN AND. Vidyapina, A.I. Dobrynina, G.P. Zhuravleva. M.: UNITA-DANA, 2000. Ch. 12.

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It happens that an organization in some there is no income during the reporting or tax period, but there are expenses. It would seem that no questions should arise. After all, neither accounting nor tax legislation provides for any special features for accounting for expenses in the absence of income.
However, many are afraid that the losses reflected in the income tax return or in the return under the simplified tax system will attract the attention of the tax authorities: the accountant may be called to a loss-making commission, request clarification on the issue of the occurrence of losses, offer to submit an updated “break-even” declaration, etc.
In addition, the presence of losses over several years is one of the criteria for selecting an organization for an on-site tax audit (Clause 2, Section 4 of the Concept for the Planning System for On-site Tax Audits, approved by Order of the Federal Tax Service of Russia dated May 30, 2007 N MM-3-06/333@ (ed. dated 04/08/2011)). And even if you reflect losses only in accounting, but not in tax accounting, you may also have questions (Clause 2 of the Publicly Available Criteria for Self-Assessment of Risks for Taxpayers, approved by Order of the Federal Tax Service of Russia dated May 30, 2007 N MM-3-06/333 @ (edited on 04/08/2011)). It is unlikely that they will be called to the commission, but they will most likely ask for an explanation (in connection with which discrepancies arose).
Few people like this kind of attention. Therefore, accountants doubt whether it is worth showing expenses if there is no income. Let's consider how to proceed.

Are the costs direct? No problem

You determine the list of direct expenses in your accounting policy (Clause 4 - 6 PBU 1/2008 “Accounting Policy of the Organization”, approved by Order of the Ministry of Finance of Russia dated October 6, 2008 N 106n; clause 1 of Article 318 of the Tax Code of the Russian Federation; Letter of the Federal Tax Service of Russia dated 24.02 .2011 N KE-4-3/2952@). There will be no problems with them either in accounting or tax accounting.
In accounting, they are reflected in account 20 “Main production” and form work in progress. In tax accounting, they can be reflected in special registers. As goods (work) are sold, the cost of which includes direct costs, they are written off as expenses of the current period both in tax (Clause 2 of Article 318 of the Tax Code of the Russian Federation) and in accounting.
It turns out that direct costs are taken into account when calculating the financial result only if there is income.
If your organization provides services, you have the right to take into account direct expenses in full in the current period in tax accounting<4>. But you can, in general, not do this in order to avoid losses.

Understanding indirect costs

In accounting

Expenses are recognized in the reporting period in which they arose, regardless of the intention to receive revenue or other income (Clause 17, 18 PBU 10/99 “Expenses of the organization”).

Note
Many accountants doubt the correctness of writing off expenses from account 26 to account 90 in a situation where there is no revenue. After all, expenses must be written off to the debit of account 90 simultaneously with the recognition of revenue on the credit of this account. Therefore, sometimes they use another option - they write off expenses as a debit to account 91 “Other income and expenses.” There is no mistake in this, but note that administrative expenses are expenses for ordinary activities, not other expenses, and the fact that the organization does not yet receive revenue does not change their qualification.
The option you choose must be stated in the accounting policy (Clause 7 of PBU 1/2008).

By not reflecting expenses in accounting in a timely manner, you risk that your company will be held accountable for a gross violation of the rules for keeping records of income and expenses (Article 120 of the Tax Code of the Russian Federation; Article 15.11 of the Code of Administrative Offenses of the Russian Federation).
Previously, many experts, and even the tax authorities themselves, in oral recommendations advised collecting expenses in the absence of income in account 97 “Future expenses” and writing them off to the financial result as revenue is received. Many accountants did this, writing it down in their accounting policies. Accordingly, in the period when there was no income, expenses were not taken into account and losses were not generated.

For reference
For gross violation of the rules for keeping records of income and expenses, your organization may be fined (Article 120 of the Tax Code of the Russian Federation):
(if) the violation was committed during one tax period - by 10 thousand rubles;
(if) the violation was committed during several tax periods - by 30 thousand rubles;
(if) the violation led to an understatement of the tax base - by 20% of the amount of unpaid tax, but not less than 40 thousand rubles.
In addition, for gross violation of accounting and reporting rules, your manager may be fined in the amount of 2 thousand to 3 thousand rubles. (Article 15.11 of the Code of Administrative Offenses of the Russian Federation).

But using account 97 to disguise losses is wrong. After all, by reflecting expenses on it, you violate the requirement for timely reflection of facts of economic activity and create a hidden reserve, which contradicts the requirement of prudence (Clause 6 of PBU 1/2008).

This leads to distortion of financial statements (in this situation it looks like break-even) and misleads users. In the same year, due to changes made to the Accounting Regulations, in the situation considered, account 97 cannot be used at all.

In tax accounting

In tax accounting, indirect expenses are included in the expenses of the current period in full (Clause 2 of Article 318 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated July 28, 2009 N 03-03-06/1/495). As a result, in the absence of income, a loss will be formed - a negative difference between income and expenses. The loss is reflected in the income tax return and carried forward to the future. The Ministry of Finance also agrees with this (Paragraph 2 of the Letter of the Ministry of Finance of Russia dated 08/25/2010 N 03-03-06/1/565; Letters of the Ministry of Finance of Russia dated 05/21/2010 N 03-03-06/1/341, dated 04/21/2010 N 03 -03-06/1/279, dated July 17, 2008 N 03-03-06/1/414).
However, tax authorities often remove expenses when there is no income, but the courts do not support them. They believe that what matters is not the result of the activity - profit or loss, but the focus of the activity on generating income (Clause 9 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 N 53; clause 3 of the Definition of the Constitutional Court of the Russian Federation dated June 4, 2007 N 320-O-P ).
If you do not reflect your expenses in tax accounting, there will be no claims against you.
However, keep in mind that including these expenses in the declaration of another period will be quite problematic.

Enter the site

When checking, they may be removed due to the fact that they do not relate to the current period (Clause 1, Article 54, Article 272 of the Tax Code of the Russian Federation). The Ministry of Finance has repeatedly stated that expenses not included in the “unprofitable” declaration cannot be taken into account as current expenses in the following periods (Letters of the Ministry of Finance of Russia dated 05/07/2010 N 03-02-07/1-225, dated 04/23/2010 N 03 -02-07/1-188).
Therefore, if the tax authorities deduct expenses for you that you did not reflect earlier, you can only take them into account by submitting clarifications for the periods to which they relate, and then you will still have to show the losses.

Advice
If the loss is small, it may actually make sense to file a break-even return to save yourself the hassle. And accounting should be done correctly. But if the amounts of loss are significant, then it is better to declare them so that you can then take them into account in the future.

We provide the inspection with an explanation of where the losses come from.

Banal replies like “serious consequences of the financial crisis” should not be used. It is better to describe in detail why you have no income and what expenses you are showing.
For example, like this:

Or you can make an “explanatory” like this.

Is it possible to deduct VAT in the absence of calculated tax?

Deductions reduce the total amount of calculated tax (Clause 1, Article 171 of the Tax Code of the Russian Federation). Therefore, regulatory authorities believe that if there is no calculated tax, then there is nothing to deduct the input tax from. As soon as the calculated tax appears (that is, sales), it will be possible to reduce it by tax deductions (Letters of the Ministry of Finance of Russia dated December 8, 2010 N 03-07-11/479, dated July 29, 2010 N 03-07-11/317, dated June 22 .2010 N 03-07-11/260). However, the courts in this matter side with organizations, allowing tax deduction even when there is no sale (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 05/03/2006 N 14996/05; Resolution of the Federal Antimonopoly Service dated 12/15/2010 in case N A55-3486/2010). Moreover, there are court decisions that clarify that the calculated tax in the absence of sales exists, it is simply equal to zero (Resolutions of the Ninth Arbitration Court of Appeal dated December 11, 2008 N 09AP-15622/2008-AK; Seventeenth Arbitration Court of Appeal dated June 22, 2007 N 17AP-3945/07-AK).
But if the prospect of disputes with tax authorities does not appeal to you and you do not intend to return taxes from the budget, then it is easier, of course, to postpone deductions for the period when your sales begin (realization appears).

Expenses, of course, need to be reflected in a timely manner both in accounting and tax. You should not follow the lead of the tax authorities. After all, the responsibility of an accountant is to properly keep records of his activities. The tax authorities' arguments about the unjustification of such expenses have no legal basis.
So take your tax loss easy. And over the next 10 years, you can reduce the income tax base by its amount (Paragraph 2, paragraph 8, Article 274, Article 283 of the Tax Code of the Russian Federation).
If you apply the simplified tax system with the object “income minus expenses,” then you can take into account your expenses (except for expenses for the purchase of goods) after payment, even in the absence of income. The amount of loss generated in this case can also be written off over the next 10 years (Clause 7 of Article 346.18 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated January 23, 2009 N 03-11-06/2/5).
And if in a few years you have the opposite task - to reduce profits in order to pay less tax - these same losses from previous periods will be very useful to you.

VAT, Revenue

There are expenses, no income

Sometimes organizations do not receive revenue for some time, but have expenses associated with their activities. Let's consider how such expenses are reflected in accounting and how they are recognized for the calculation and payment of income tax and value added tax.

Typically, such problems are primarily encountered by organizations that start working from scratch. To carry out their activities, they acquire production facilities and equipment, purchase raw materials and supplies, and recruit workers. This requires a certain time, during which firms incur expenses, but do not produce and sell goods, works, services and, therefore, have no revenue.

Organizations that operate, but for one reason or another do not receive revenue for some time, sometimes find themselves in the same situations. Often, an organization is in this position for one or more reporting periods, and then accountants are faced with problems accounting for these expenses. Therefore, further we will talk about how such expenses are reflected in accounting and how they are taken into account for taxation.

How to record expenses in accounting

To recognize expenses in accounting, the Accounting Regulations “Expenses of the Organization” (PBU 10/99) have been developed. This document should be used as a guide when recording expenses in accounting accounts. Let us recall that in accounting all expenses are divided into expenses for ordinary activities, operating expenses, non-operating expenses and extraordinary expenses. Expenses for ordinary activities include expenses incurred by an organization in the production and sale of products, the acquisition and sale of goods, the performance of work and the provision of services. These are the costs of purchasing raw materials, materials, wages of workers, costs of maintaining and operating equipment, general business and other expenses.

All expenses in accounting are shown in the period in which they occurred, regardless of whether or not the organization received sales revenue in this period, and whether or not it had operating and other income. Accounting reflects any expenses, both in cash and in kind, regardless of whether they are paid or not in this period. This follows from clauses 17 and 18 of PBU 10/99. The Regulations specify the general conditions for recognizing expenses. The specific procedure for recording expenses in the accounting accounts depends on the type of expenses and on what activities the organization is engaged in. Let's consider how expenses should be reflected if there is no revenue:

1. firms that produce products but do not receive revenue;
2. companies that have just been formed and have not yet started production;
3. firms that are engaged in dealer, brokerage and other activities (except trading).

The first organizations spend raw materials, pay wages to employees and depreciation, maintain a management apparatus, even if they do not receive revenue. These expenses are reflected in accounting in the usual manner.

Expenses for the purchase of raw materials and materials, for the payment of wages to main employees are debited to account 20 “Main production”. Accrued depreciation is taken into account in the same account. According to clause 24 of the Accounting Regulations “Accounting for Fixed Assets” (PBU 6/01), depreciation is accrued regardless of the organization’s performance and is reflected in accounting in the reporting period to which it relates. General business expenses are first recorded in account 26 “General business expenses”, and then written off to the debit of account 20 “Main production”.

Example. Progress LLC is engaged in the production of electrical appliances. In October 2002, it did not receive any revenue. However, the following expenses were incurred this month. Raw materials were consumed for the production of goods in the amount of 120,000 rubles, salaries were accrued to the main employees in the amount of 70,000 rubles, and salaries to management staff were accrued in the amount of 15,000 rubles. In addition, this month depreciation was accrued on equipment intended for production - 22,000 rubles.

The accountant of Progress LLC must make the following entries:

Debit 20 Credit 10 subaccount "Raw materials and supplies"

• 120,000 rub. — materials spent on the production of goods are written off;

Debit 20 Credit 70

• 70,000 rub. — wages accrued to key employees;

Debit 20 Credit 02

• 22,000 rub. — depreciation has been accrued on equipment intended for production;

during October

Debit 26 Credit 70

• 15,000 rub. — wages accrued to employees of the management apparatus;

at the end of October

Debit 20 Credit 26

• 15,000 rub. — general business expenses are written off as production costs.

Note. Newly formed organizations generally initially have expenses for the maintenance of the management apparatus, which are accounted for in account 26. But gradually other expenses appear in such organizations. For example, they purchase equipment and from the 1st day of the month after it is registered, they charge depreciation, hire workers to install this equipment, etc. Organizations cannot take into account these expenses immediately on account 20 “Main production”, since this account reflects the costs of production. In this case, the product is not produced. Therefore, before the start of production, it is advisable to charge all expenses (including general business expenses) to account 97 “Future expenses”, and then, when the organization begins to produce products, they can be written off as a debit to account 20.

Example. LLC "Miracle" was registered in July 2002 as a furniture production organization. It actually started production in October. In August, woodworking equipment worth RUB 240,000 was purchased. (including VAT - 40,000 rubles), which was registered at the same time. In the same month, salaries were accrued to management staff - 10,000 rubles.

The following expenses were incurred in September. Depreciation on equipment was accrued in the amount of RUB 3,600. The salary of the management staff was accrued - 10,000 rubles.

The accountant of Miracle LLC must make the following entries:

in August 2002

Debit 08 Credit 60

• 200,000 rub.

  Accounting for expenses and input VAT if there is no income

  (240,000 - 40,000) - equipment was capitalized;

Debit 19 Credit 60

Debit 60 Credit 51

• 240,000 rub. — paid for equipment;

Debit 01 Credit 08

• 200,000 rub. — equipment is accepted for accounting as part of fixed assets;

Debit 68 subaccount "VAT calculations" Credit 19

• 40,000 rub. — accepted for VAT deduction;

Debit 26 Credit 70

in the end of the month

Debit 97 Credit 26

in September

Debit 97 Credit 02

• 3600 rub. — depreciation was accrued for woodworking equipment;

Debit 26 Credit 70

• 10,000 rub. — salaries were accrued to employees of the management apparatus;

in the end of the month

Debit 97 Credit 26

• 10,000 rub. — general business expenses are written off as deferred expenses;

in October, when Miracle LLC will begin production

Debit 20 Credit 97

• RUB 23,600 (10,000 + 3600 + 10,000) - expenses previously included in deferred expenses are written off as production costs.

Note. The same should be done by organizations that are engaged in agency, brokerage, dealer and other similar activities (except for trade). These organizations have only general business expenses, which are usually written off as a debit to account 90 “Sales”. However, in our case, it is impossible to take into account general business expenses in this account. In accordance with the Instructions for using the Chart of Accounts, the debit of subaccount 90-2 “Cost of sales” includes only those expenses for which revenue is recognized in this account. In this case, the organization has no revenue. Therefore, we propose to write off such expenses to account 97 “Deferred expenses”, although these expenses are not such, and subsequently, when sales revenue appears, assign them to subaccount 90-2 “Cost of sales”. But how to write off these expenses as expenses - immediately in full or gradually over a certain time - organizations must decide for themselves. Typically, such distribution is provided for by the organization's accounting policies. If this happened in the organization for the first time, then the expenses are written off at the discretion of the accountant.

Example. Domik LLC provides agency services for the sale of apartments. In September 2002, it had no revenue, but in October it received revenue in the amount of 50,000 rubles. In September, wages were accrued to employees in the amount of 40,000 rubles.

The accountant of Domik LLC must make the following entries:

in September 2002

Debit 26 Credit 70

• 40,000 rub. — wages accrued to employees;

at the end of September

Debit 97 Credit 26

• 40,000 rub. — general business expenses are written off as deferred expenses;

in October 2002

Debit 62 Credit 90 subaccount "Revenue"

• 50,000 rub. — revenue from the provision of services is reflected;

Debit 90 subaccount "Cost of sales" Credit 97

• 40,000 rub. — costs previously included in deferred expenses are written off to cost.

How are expenses taken into account for tax purposes?

And one more question will immediately arise before the accountant if there are expenses in the reporting period, but no sales revenue. How can expenses be reflected in tax accounting in this case and can they be taken into account when calculating profit for the reporting period? To answer this question, let us turn to Chapter 25 “Income Tax” of the Tax Code of the Russian Federation. Let us recall that the profit on which tax is calculated is determined as the difference between the income received and the expenses incurred. Expenses are determined depending on which method the organization uses: accrual or cash. Organizations operating “on an accrual basis” divide all expenses into direct and indirect (Article 318 of the Tax Code of the Russian Federation). In our case, direct expenses are the costs of raw materials, materials, wages to employees who are involved in the production of products, depreciation on the equipment on which the products are manufactured. General expenses are considered indirect. Indirect expenses completely reduce the tax base of the reporting period in which they are incurred. Direct costs are also included in the costs of the current reporting period, with the exception of those that relate to the balances of work in progress, finished products in the warehouse, products shipped but not sold in the reporting period. This procedure is established by Article 318 of the Tax Code of the Russian Federation, and it now does not link expenses with income. Why now? Yes, because such a change was made to this article in May 2002 by Law No. 57-FZ. Initially, Article 318 had a different wording. It indicated that expenses of the current reporting period reduce income from production and sales of this reporting period.

That is, the question arose: if there is no income, is it possible to take into account expenses in this period? It is quite possible that tax authorities would consider such expenses unlawful. Now, nothing prevents organizations from including in the tax base all expenses of the current period in the absence of sales revenue.

Note. As for organizations that use the cash method, they recognize expenses after they are actually paid. That is, expenses are taken into account for tax purposes in the reporting period in which they are actually paid, regardless of whether there is revenue in this reporting (tax) period.

Is it possible to deduct VAT if there is no revenue?

Attention! Apparently, accountants’ doubts about whether it is possible to claim VAT as a deduction in tax returns in the absence of revenue are related to Article 173 of the Tax Code of the Russian Federation. It states that VAT paid to the budget is defined as the difference between the calculated tax amount and tax deductions. That is, at first glance, it seems that VAT is deductible only when there is VAT calculated on revenue for products sold. However, it is not. In order to offset VAT, you only need to fulfill the conditions specified in Article 172 of the Tax Code of the Russian Federation. That is, the organization that paid VAT to the supplier must have an invoice, documents confirming the payment of tax amounts, and the purchased goods must be capitalized. Having fulfilled these conditions, the organization has the right to claim VAT for deduction, despite the fact that it did not carry out the sale. As for the provisions of Article 173 of the Tax Code of the Russian Federation, it states that the amount of tax deductions may exceed the total amount of calculated tax. Therefore, in this case, the amount of tax on revenue will be zero, and all VAT deducted will be refunded.

Accounting for deferred expenses