Enterprises in the Russian Federation have the right to form reserves, and take into account the costs of creation when determining income tax. In the article, we will consider account 96: its use, postings and corresponding accounts.

Account 96: its use

To summarize information that gives an idea of ​​the organization's future expenses distributed during the year, account 96 "Reserves for future expenses" is intended. Its purpose is the uniform inclusion of costs for future production costs, sales costs.

Reserves for future expenses consist of:

• holiday expenses;
• lump sum payments employees;
• current repair of equipment, OS;
• development of new industries;
• other possible expenses of the organization.

When reserves are formed, costs are charged to the following accounts, depending on the final purpose of the assignment:

Reserve name	Target	Accounts in use
For holiday pay	Funds are allocated for the provision of vacations to employees throughout the year	70, 69
For the payment of remuneration to employees for long service and other	Creation of reserves for lump-sum payments to employees, allocation of funds for the remuneration of seasonal workers	70, 69
OS repair	The possible amounts required for the current maintenance (repair) of property and equipment are determined	20,23
Land reclamation	Designed for environmental protection activities	20, 23
Warranty repair and maintenance	Reimbursement of expenses to buyers for the malfunction of the purchased goods under warranty service	51

Account 96: Typical Postings

The figure below shows account 96 “Reserves for future expenses” and its typical postings. To enlarge the image, click on it.

Account 96 “Reserves for future expenses”. postings

Reflection of reserves in accounting

Recently, the formation of reserves has become mandatory for legal entities. The exception is organizations that have the right to keep simplified accounting (small businesses).

The procedure for the formation of reserves is not fixed by law. Organizations have the right to develop an algorithm themselves and register it in accounting policy. If, for example, the number of employees is significant, it is allowed to create reserves for upcoming vacations quarterly or throughout the year.

If in accounting the creation of reserves has become mandatory, then in tax holding procedures are at the discretion of management. The adoption of such a decision should also be reflected in the accounting policy. The reserve created in tax accounting allows you to reduce the taxable base. You should decide on the maximum amount of deductions and the monthly percentage. A calculation is made that contains information about the planned amounts of monthly expenses based on the data on the total annual costs for reserves of a certain type.

Provisions for vacation pay and other benefits

Management has the right to take into account future expenses intended to pay off the debt on payment of holiday amounts to its employees and distribute them evenly throughout the year.

When determining the annual amount of the reserve for holidays, all expected payments should be taken into account, including contributions to the PF and the FSS, and the percentage of deductions to the reserve should be calculated based on the possible vacation amounts and the annual wage fund.

Example. The annual payroll, together with insurance payments in the organization, is planned in the amount of 900,000 rubles. The estimated amount of vacation and related contributions is 80,000 rubles. It is required to calculate the percentage of deductions to the reserve.

The monthly amount for replenishing the reserve is determined as the ratio of holiday amounts to payroll for the year, divided by the number of months (12) - 80,000/900,000/12*100% = 0.74%.

The amount of monthly deductions is 900,000 rubles * 0.74% \u003d 6,660 rubles - this amount is required to be transferred monthly to the reserve for upcoming vacation payments.

The following entries will appear in the account:

Dt 20 - Kt 96 (6,660 rubles) - monthly reserve formation

When an employee leaves, the following postings appear:

Kt 96 - Dt 70 - accrual of holiday amounts;

Kt 96 - Dt 69 - insurance premiums on holidays.

If it is necessary to allocate amounts for long service payments to employees, planned expenses are also reserved for 12 months.

After the expiration of the period, an inventory of reserves is required. The procedure is necessary to compare actual and planned costs. If unused reserved amounts are found, they should be included in the taxable base. In case of insufficient funds, additional payments for vacations and insurance premiums are made to the expenses.

Provisions for the repair of fixed assets (OS)

Each equipment on the balance sheet of the enterprise may suddenly fail or require additional investments in the form of current repairs. For such unforeseen needs, reserves are created for OS repair. The terms of the equipment and the estimated amount are taken as the basis.

Factors affecting the estimated amount:

• cost of spare parts;
• wages and insurance premiums for workers involved in repairs;
• costs for third party services.

The maximum amount of deductions to the reserve cannot be higher than the funds spent on the repair of fixed assets based on data for the last 3 years. Deductions for expenses are written off evenly throughout the reporting period.

If the actual amount of expenses turned out to be less than planned, then the previously made deductions to the reserve should be taken into account as income for the year. If real costs are exceeded, additional amounts are included in other expenses.

Creating a reserve for the repair of fixed assets in tax accounting is a right, not an obligation, of a taxpayer. Beneficial for large organizations with a large amount of equipment.

Reserves for warranty service

It is typical for trade establishments to provide guarantees to buyers when purchasing goods. Trade organizations received the right to create reserves for possible future warranty service.

The amount of the reserve should not exceed the amount of repair costs for the past 3 years. If at the end of the year the reserved amounts are not spent, then they are taken into account as non-operating income of the organization.

Designed to summarize information on the status and dynamics of the amounts planned for the subsequent even write-off of expenses for various production needs. Let's figure out how reserves for future expenses are accounted for, what costs are accumulated on it, and what records are used to write them off .

Reserves for future expenses: account 96

The creation of reserves (fact and criteria) are fixed in the accounting policy of the organization. The reservation of amounts documented by the relevant calculations and accounting forms is reflected in the account. 96, corresponding with accounts for the production and sale of products: D / t 20, 23, 51, 69, 70, 76, 91, 97, 99 - K / t 96.

So, the amounts of reserves divided by items of planned future costs are recorded on this account. Most often, companies practice creating reserves for:

• Payment for vacations (+ insurance contributions to funds) in the coming periods;
• Payment of annual remuneration based on years of service;
• Expenses for seasonal work;
• Costs for the repair of fixed assets, land reclamation, environmental protection measures;
• Expenses for warranty repair and maintenance of facilities, etc.

The actual expenses incurred, included in the previously formed reserve, are reflected in the d-tu account. 96 and written off to production costs in correspondence with cost accounts.

Analytical accounting for accounts. 96 is carried out separately for each created reserve. The correctness of the formation and use of reserve amounts is periodically checked in accordance with calculations, estimates and other accounting documents. If necessary, their dimensions are adjusted. At the end of the year, an inventory is mandatory for reserve operations.

Reserves for future expenses in the balance sheet: line and its name

The reserves formed by the company for future expenses in the balance sheet are recorded in the lines estimated liabilities:

• In the 4th section "Long-term obligations" - p. 1430;
• In the 5th section "Current liabilities" - p. 1540.

The created reserves are reflected in the indicated lines as long-term or short-term liabilities, based on the period of their circulation. For example, the accrued reserve for staff vacations of the current year will be fully used in reporting period and, therefore, is considered as a short-term estimated liability, reflected in line 1540. Long-term liabilities include operations for the restructuring of production, i.e. those planned to take place over a period exceeding 12 months.

Reserves for future expenses: postings

Accounting for reserves of future expenses and payments begins with the creation of a reserve:

Operation	Account correspondence		Base
Accrual of a reserve for future expenses for the main production (output of products, payment for vacations in future periods, deductions to funds)			Production plans, staff vacation schedule, accounting statement-calculation of the amount of costs
Provision for expenses on auxiliary productions			Estimate and technical documentation Help-calculation
Creation of a repair fund
Monthly service payments (29), e.g. future expenses for the repair of leased property, expenses for sale in trade (44)
Formation of a material incentive fund within the company			Mark in the UE, reference-calculation
Assigning the amounts of contributions for overhaul to the reserve			Plans for the formation of target deductions
Creation of a reserve from other income receipts			Economic justification, calculations
Accrual from deferred expenses

At the end of the reporting period, on the basis of documented transactions, the accountant carries out itemized write-offs for production costs, ensuring their uniformity and based on the calculation methodology adopted by the company. Main accounting records are:

Operation	Account correspondence		Base
Write-off of expenses for completed current repairs (stages)			Acts of work performed
Write-off of costs for auxiliary and service industries
Coverage of fixed assets depreciation costs
Calculation of vacation pay for personnel from reserve funds			Vacation schedules, personnel orders, personal accounts
Insurance premiums accrued on this amount of vacation pay			Calculation of deductions

Reserves for future expenses: account closure

In the process of production, the size of the created reserves may change, therefore, by the end of the year, an overrun of reserve funds or an excess of actually incurred expenses over the reserve is possible. The excess of the reserve can be written off at the expense of current expenses (if justified). If at the end of the year there is a balance of reserve funds, then it is canceled or transferred to the next financial year. It is important to fix the operations for maintaining and closing the 96th account in the accounting policy of the organization.

Reserves for future expenses. Other income

• At the end of the reporting period:
  The balance of the reserve not used during the period is written off back to the source of its (reserve) formation;
  It is carried out on the basis of an accounting statement.
• The same entry, in accordance with paragraph 22 of PBU 8/2010, reflects the write-off of the corresponding reserve in the accounting for exploration assets (expenses for the development natural resources), provided that production is recognized as unpromising.

In the latter case, the previously accrued (see check 2), but remaining unexhausted, reserve is simultaneously written off: Dt 96 Kt 91.1, - the write-off of the reserve is carried out in accordance with paragraph 22 of PBU 8/2010. So, if the source of the formation of the reserve for future expenses was an expense item, then, accordingly, the balance of the unused reserve should be credited to income. It's just a matter of matching income to expenses. Therefore, I consider it insufficiently logical approach, according to which the balances of reserves are written off to other expenses, regardless of the expenses at which these reserves were formed - at the expense of other expenses or, nevertheless, the expenses of core activities. In my opinion, this topic should remain in the realm of professional judgment, and not rigid official regulations.

In general, the posting scheme for accounting for tangible prospecting assets is as follows:

1. (10, 20, 23, 60, 68, 69, 70...) – for the amount of expenses corresponding to the accounts incurred in connection with the development of natural resources;
2. - Estimated liabilities (at the end of the life of the facility), - are created in accordance with Sec. III (clause 15-20) RAS 8/2010;
3. - by the amount of expenses accumulated on account 08.9 related to material prospecting assets, which are accepted as such for accounting by this entry;
4. – for the amount of periodically accrued depreciation of prospecting assets;
5. – for the amount of depreciation of prospecting assets accumulated over the period of prospecting (depreciation is written off at the expense of the initial cost of the relevant prospecting assets);
6. – by the amount of the residual value of tangible prospecting assets, provided that the extraction is recognized as commercially viable, or if the extraction is recognized as unpromising. In the latter case, the previously accrued (see check 2), but remaining unexhausted, reserve is simultaneously written off: Dt 96 Kt 91.1, - the write-off of the reserve is carried out in accordance with paragraph 22 of PBU 8/2010.

• 08.9 - Investments in exploration assets (expenses for the development of natural resources)
• 08.10 - Tangible exploration assets.

For details on how a reserve is created in the amount of the estimated cost of dismantling, liquidation of the facility and restoration of the site at the end of the life of the facility, see a separate article.

Due to the requirements of the current legislation (local regulations, court decisions, agreements), in the course of the company's actions, the latter may encounter obligations, in relation to which the amount and term are not defined.

We are talking about valuation obligations, which are reflected in RAS 8/2010. Used for accounting account 96 "Reserves for future expenses".

What it is

The account is used for in order to create a reserve of planned costs. Thus, they ensure an even distribution of expenses in order to pay income tax and other areas. There are sub-accounts for personnel remuneration, seasonal work, equipment preparation activities, repair work with fixed assets, etc.

With proper management of account 96, the enterprise is endowed with the opportunity to avoid problems with the law and rationally plan its own budget.

The word "reserve" has French roots and is translated as reserve. In the framework of modern accounting practice, it has been operated since the 19th century and involves the share of an asset that is written off as an expense, that is, it must always be filled with the funds presented in the balance sheet asset.

If there is no corresponding content, then use the contract account. The formation of a reserve is an indisputable right belonging to the owner of the enterprise. But this direction should not imply affecting all the interests of the budget.

What is used for

Account 96 is intended for use and generalization of information related to the status and movement of amounts reserved in order to include expenditure areas in certain categories of costs.

By credit certain amounts are reserved, and debit- regulation of actual expenses for which the reserve was previously formed.

The correctness of the formation and application is regularly checked on the basis of these calculations, estimates and rules.

Score 96 wears passive character. Formation is carried out by credit, write-off - by debit.

Accounting procedure

In order to recognize and record provisions under accounting, take into account a number of conditions mandatory to comply with:

• the organization in the course of past circumstances has an obligation that must be urgently fulfilled;
• it is highly probable that the economic benefits required to fulfill this obligation will be reduced;
• a reasonable estimate of the amount of the estimated liability.

If each position is complied with, the account reflects obligations for:

• payment vacation pay for employees;
• repair costs associated with fixed assets;
• the cost of warranty service of commodity items;
• court proceedings;
• restructuring of the company.

The legislative framework

In the process of carrying out activities, the accountant is guided by norms and features:

• local regulations adopted within the enterprise;
• orders and orders from the authorities;
• government regulations;
• regional opinions;
• accounting rules (PBU).

All laws are extensive and involve consideration of the situation from several positions.

Formation, write-off, typical accounting entries

Based on the nature of the estimated liabilities, the amount is attributed to expenditure areas by type of activity, as well as to other expenses. With regard to maintaining analytical accounting according to the account, it is carried out according to the directions of obligations. The credit balance is reflected in the liabilities side of the balance sheet. line 1430.

By debit

1. Dt 96 Kt 23- write-off of expenses for completed current repairs, write-off of costs that are aimed at auxiliary production.
2. Dt 96 Kt 28- displaying the write-off of costs for the elimination of defects.
3. Dt 96 Kt 29- the costs of service industries are written off due to preliminary formation.
4. Dt 96 Kt 51— an increase in the RPR settlement account based on a bank statement.
5. Dt 96 Kt 52- increase in reserves of expenses at the expense of cash.
6. Dt 96 Kt 70- accrual of payment for vacation pay to workers.
7. Dt 96 Kt 97- write-off of repair costs.
8. Dt 96 Kt 99- accrual excess amount for the repair of OS facilities.
9. Dt 96 Kt 10-1- write-off of the cost of materials used.
10. Dt 96 Kt 69-3- Calculation and payment of tax contributions.
11. Dt 96 Kt 91-1- attribution to the financial results of the amounts that have been accrued in the current year.

By loan

In the credit direction, the account includes a large number of transactions.

1. Dt 20 (23) Kt 96- reflection of deductions to the reserve intended for the repair of fixed assets.
2. Dt 20 Kt 96- accrual of monetary amounts, the formation of reserves for the payment of vacation pay and the reflection of deductions for the subsequent repair of fixed assets.
3. Dt 23 Kt 96- there has been an accrual.
4. Dt 29 (44) Kt 96- reflection of the amount of monthly deductions for repair operations on fixed assets.
5. Dt 44 Kt 96- reflects payments for repair work on fixed assets of the tenant.
6. Dt 84 Kt 96– the formation of a financial aid fund within the enterprise.
7. Dt 86 Kt 96- Contributions from the Capital Improvement Fund.
8. Dt 97 Kt 96- a reflection of the fact that the actual costs of repair work exceed the reserve that was created for the repair of fixed assets.

In practice, a large number of postings are used, which should be taken into account and taken into account in accounting activities.

Features of closing 96 accounts

The reserve is calculated not 100% accurate. It changes due to exposure a number of factors:

• dismissal of employees;
• changes in salary and ancillary deductions;
• changes in the actual vacation schedule;
• other prevailing circumstances.

When the reserve is exceeded, the amount "on top" is subject to write-off through current expenses. If the expenditure has not occurred in full, it is carried over to the next year or reversed.

What conclusion can be drawn

Account 96 plays an important role in the balance sheet and the activities of the organization as a whole. It has sub-accounts that operate in different directions of expenses, and is responsible for the stocks of the enterprise in order to correctly allocate the budget.

The account corresponds with a large number of other directions and is used in the formation of postings. They characterize the principles of the enterprise and accounting.

Account 96 of accounting is a passive account Reserves for future expenses, serves to summarize information about the reserved amounts of future expenses of the organization. We will study how to calculate and reflect in the postings the creation of a reserve for the payment of vacation pay to employees and a reserve for warranty repairs.

The organization's future cost reserves consist of:

• Upcoming expenses for vacation pay for employees;
• Costs for current repairs of equipment and fixed assets;
• Warranty and repair costs;
• Other expenses of the organization.

The enterprise has the right to independently establish the procedure for calculating the reserve for paying vacation pay to employees, indicating in the accounting policy, taking into account paragraphs 15 and 16 of PBU 8/2010:

When determining the calculation base for the reserve for the repair of fixed assets or equipment, it is necessary to take into account data on the sale of products in the reporting period, the estimated percentage of defects, statistics in the field of warranty repairs, and so on.

Note that the annual amount of the reserve for guaranteed repairs should not exceed the arithmetic average of the amount of actually performed guaranteed repairs for the previous three years.

Having determined the annual amount of the reserve, you can calculate the amount of monthly deductions: the annual amount is divided by 12. If the amount of the reserve is deducted once a quarter, then the total annual amount is divided by 4.

The amount in excess of the organization's vacation reserve can be written off at the expense of current expenses. And the rest of the amount of the organization's vacation reserve can be carried over to the next year.

If the reserve for the repair of fixed assets and equipment is not used up in the current year, then the balance can be closed on account 99.01 “Profits and losses on activities with OSNO:

We also note that in balance sheet the amount of the reserve is reflected in line 1540 “Reserves for future expenses”.

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Postings on account 96

Typical postings of transactions on account 96 “Reserves for future expenses” are shown in the table below:

dt account	CT account	Wiring content
96	70	Reflected the amount of the reserve for the payment of accrued vacation workers
96	69	The amount of accrued social benefits is reflected
96	76	The cost of services of third-party enterprises written off at the expense of the organization’s reserve is reflected, for example: warranty repairs, warranty service
96	91	Unused amount of the reserve for future expenses, included in other income
08	96	Reflected the amount of the organization's reserve for investing in non-current assets during construction work
20 (23,29)	96	The accrued amount of the reserve is included in the cost of the main production ( auxiliary production or service industry)
25 (26)	96	We include the accrued amount of the reserve in the composition of general production or general business costs
44	96	The accrued amount of the reserve is included in the selling expenses

Examples of operations on account 96 in accounting

Let us study in more detail examples of operations on account 96 “Reserves for future expenses”.

Example 1. Creating a reserve for vacation pay based on wages

The accounting policy of Vesna LLC reflects the creation of a reserve for paying vacation pay to employees based on wages. In this case, the reserve is accrued at the end of each month.

To calculate the reserve, we use the formula: (OT + insurance premiums) / 28 * 2.33, where

• 28 - the number of vacation days per year for each employee, according to the collective agreement;
• 2.33 - the number of vacation days for 1 month worked.

Hence:

• Insurance premiums - 30.2%;
• Salary in January - 250,000 rubles;
• January reserve: (250,000 + 75,500) / 28 * 2.33;
• Vesna LLC formed a reserve for vacation pay in January in the amount of 27,086 rubles.

Postings on the creation of a reserve in Vesna LLC for deferred vacations on account 96:

Example 2. Creating a reserve for vacation pay based on average earnings

The accounting policy of Zima LLC reflects the creation of a reserve for vacation pay based on average earnings and the number of unused vacation days. The salary of employees for the past 2016 is 2,750,000 rubles. The rest of the holidays for 2016 is 30 days. The average number of days per month in 2016 is 29.3 days.

To calculate the reserve, we use the formula: (average daily earnings + insurance premiums) * vacation balance.

Reserve calculation:

• Average daily earnings: 2,750,000 / 29.3 / 12 = 7,821.39 rubles;
• Insurance premiums: 7,821.39 * 30.2% = 2,362.06 rubles;
• Reserve as of December 31, 2016: (7,821.39 + 2,362.06) * 30 = RUB 305,503.50

Zima LLC has generated entries for the creation of a reserve for holidays on account 96:

Example 3. Creating a reserve for warranty repairs

Let's say Autumn LLC sells its products with a repair guarantee within 12 months from the date of sale. After analyzing the sales of goods, it was revealed:

• 12% of goods sold are repairable;
• 8% of the sold goods are subject to replacement;
• The average cost of repairs per unit of goods is 650 rubles;
• The average cost of replacing a product is 4,500 rubles;
• During 2017, it is planned to release 5,000 units of goods.

Thus:

• Calculation of the amount of the reserve for 2017: (5,000 * 12% * 650) + (5,000 * 8% * 4,500) = 2,190,000 rubles.
• The amount of monthly accruals to the reserve is: 2,190,000 / 12 = 182,500 rubles.

Postings on account 96 to create a reserve.