If direct costs exceed sales proceeds. Indirect costs. What are indirect costs

Indirect costs. Accounting and distribution in the calculation of income tax

Indirect costs, which include: accounting and distribution of indirect costs in organizations engaged in various activities. A detailed list of expenses that the company can safely attribute to indirect. \u003e\u003e\u003e

In tax accounting, the costs of an organization for production and sales are divided into two groups:

• direct costs;
• indirect costs.

Organizations that are not classified as trading should only allocate costs to direct and indirect costs if they calculate income taxes on an accrual basis. Organizations using a cash basis are not required to allocate expenses to these groups.

Depending on which group of expenses certain expenses belong to, the moment of their recognition in the tax base differs. Write off indirect costs in full in the period to which they relate. Direct costs need to be apportioned. That part of them that relates to the balance of work in progress or unsold goods, the organization's current expenses will not increase.

Merchants allocate costs to direct and indirect costs regardless of the method of calculating income tax (accrual or cash basis). Direct costs include:

• the cost of purchasing goods sold in the reporting ( tax period);
• costs of delivery of goods to the buyer's warehouse (if these costs are not included in the price of goods).

Direct expenses are taken into account when calculating income tax as the goods are sold. All other expenses (except for non-operating expenses) are indirect. Indirect costs reduce the income from the sale of the current month.

The procedure for dividing the costs into direct and indirect costs largely depends on what activities the organization is engaged in:

• production of products, performance of work;
• provision of services;
• trade.

Let's talk about each of these activities in more detail.

Indirect costs of manufacturing organizations

Indirect costs, what does it refer to in manufacturing organizations? For industrial organizations, an approximate list of direct costs is established by paragraph 1 of Article 318 Of the Tax Code RF. These include:

• material costs. These are the purchase costs of: raw materials and materials used for the production of products (performance of work); components to be installed; semi-finished products requiring additional processing;
• the costs of remuneration of employees involved in the production of products (performance of work), as well as the contributions accrued for these payments for compulsory pension (social, medical) insurance and insurance against accidents and occupational diseases;
• depreciation deductions for fixed assets used in the manufacture of products (performance of work).

The rest of the costs (except for non-operating costs) are indirect costs.

The organization must establish the exact list of direct costs associated with production and sale independently. Develop such a list and fix it in the accounting policy for tax purposes. Formation of the list of direct costs must be economically justified. It is necessary to distribute costs taking into account the specifics of the technological process and industry specifics. At the same time, only those expenses that cannot be attributed to direct ones for objective reasons can be recognized as indirect. For example, the costs of raw materials and supplies that are included in the unit cost are always direct and cannot be attributed to indirect costs. Similar clarifications are contained in the letter of the Federal Tax Service of Russia dated February 24, 2011 No. KE-4-3 / 2952. The legality of such a conclusion is confirmed by arbitration practice (see, for example, the definition of the Supreme Arbitration Court of the Russian Federation dated May 13, 2010 No. VAS-5306/10).

Determining the list of direct costs for tax accounting, an organization can use a similar list that it uses in accounting.

Include costs that relate to direct costs in the tax base as products are sold (work performed), in the cost of which they are included. Consider indirect costs in the costs of the period when they are accrued.

Indirect costs of service providers

Organizations that provide services can allocate costs to direct and indirect in the same manner as production. They should also form a list of direct costs and fix it in the accounting policy. The rest of the costs are indirect costs. However, there is a significant difference between the rules for recognizing expenses from industrial organizations and organizations that specialize in the provision of services.

A service is an activity, the results of which have no material expression and are realized and consumed in the process of its implementation. In this regard, organizations providing services (for example, consulting companies) are not obliged to distribute direct costs between the costs of the current tax (reporting) period and the cost of services not accepted by customers at the end of this period (letter of the Ministry of Finance of Russia dated June 15, 2011 No. 03-03-06 / 1/348). All costs incurred (both direct and indirect costs) they are entitled to recognize in the current tax (reporting) period. At the same time, this procedure for accounting for direct costs must be established in the accounting policy.

Indirect costs of trade organizations

Indirect costs, what does it refer to in trade organizations? For trade organizations, the list of direct costs is fixed. It is given in article 320 of the Tax Code of the Russian Federation. Direct costs include:

• purchase price of goods. The organization has the right to determine the procedure for its formation independently. So, the purchase price of goods can include the costs associated with the purchase of goods. These are, for example, warehouse, insurance and other costs paid by another organization. Fix the chosen option in the accounting policy for tax purposes;
• costs associated with the delivery of goods to the warehouse of the organization (if they are not included in the purchase price).

All other costs of trade organizations, except for non-operating costs, are indirect costs.

Write off direct costs as the purchased goods to which they relate are sold. Consider indirect costs when calculating income tax at the time of their accrual.

Advice
Equate direct expenses in tax accounting with expenses that form the purchase value of goods in accounting. In this case, temporary differences will not arise and the procedure for conducting accounting and tax accounting will become closer.

Accounting for indirect costs in the absence of income

If there is no income in the reporting period, the organization can recognize only indirect costs. Direct costs that relate to the balances of unsold products cannot be taken into account when calculating income tax. It turns out that if the organization has not sold anything, then it has no direct costs. As for indirect costs, they are not tied to the received revenue in any way and can be taken into account in the current period. This follows from paragraph 2 of Article 318 of the Tax Code of the Russian Federation.

Moreover, if a specific expense does not bring direct income to the organization, this does not mean that it is unreasonable. It is enough that it is necessary for the activity, the result of which will be the received income. Thus, the indirect costs of the organization can be taken into account in reducing the tax base even in the case when the income in the reporting period has not yet been received.

Indirect costs (costs) - these are expenses that cannot be directly included in the cost of the manufactured product (goods or services). They are distributed evenly between the rest of the expenses and are included in a certain base.

According to the tax code, each company independently determines which costs in its budget are indirect and which are direct.

Direct and indirect costs

According to the code, direct costs include the costs of producing products, performing work and providing services.

Indirect costs include:overhead and general expenses.

Direct costs:

• Everything production costs.
• Payment of wages and all costs to employees.
• Compensation costs, bonuses, allowances.

Indirect costs include:

1. Salary pay.
2. Cost of materials spent.
3. Volume of completed works.
4. Electricity and lighting.
5. Security enterprises.
6. Rent of spacewhich are subleased.
7. Advertising.
8. Personnel costs (salary, supplements and bonuses).
9. Depreciation of major funds.
10. Office expenses.
11. Amortization of intangible assets.
12. Mobile connection.
13. The Internett and email.
14. Postal service.
15. Business trip.

The main difference between distributed money - this is that all indirect costs are related to the current tax period, but all direct costs are related to the current period. The exception is organizations that provide services to the population.

The taxpayer has the full right to attribute the entire volume of expenses of the reporting (tax) period to a decrease in income and to work in progress.

Organizations that, in addition to providing services, perform any work or are engaged in production activities, may attribute part of the indirect costs to the reporting (tax) period.

Who divides the costs?

The division of expenses is regulated by the code of the Russian Federation, namely, article 318.

The procedure for the distribution and sorting of funds received and spent is a very important matter, since the amount of money paid in tax will depend on this, and if the law is ignored, criminal liability for tax evasion or non-payment may occur.

Not everyone is involved in dividing income into categories... For organizations that keep records of earnings through the cash register, the need for accounting disappears.

The same category of taxpayers includes organizations that provide services to the population, all incomes are automatically considered indirect. All others must maintain separation in their accounting policies.

The division of income with strict observance of all the provisions of Article 318 is not necessary, since some of its provisions are advisory in nature, therefore, the accountant himself has the right to decide which income is classified as indirect and which in direct.

Features of indirect costs

Indirect costs include all costs not included in the number of direct costs.

• Distribution is made by an accountant and the assignment of an expense to a particular category depends on many factors.
• The article does not specify on what principle to make the distributionso the company often takes advantage of this, and distribution occurs with the greatest benefit to production.

This approach is not beneficial for tax authorities, therefore, conflict situations often arise that are resolved only in court.

For instance: electricity and steam are included in the list of production costs by many companies, i.e. indirect costs.

The same applies to containers for the transport of raw materials, packaging, stickers, the work of auxiliary institutions and workers.

This approach is not beneficial to the tax service... The argument is that electricity is related to products, as well as its constituent components, and therefore must be included in the list of direct costs.

Disputes are also caused by wages of workers directly involved in the manufacture of goods, fuel, water, etc.

Consolidation of the list of direct and indirect costs in accounting policy

Each company that does not have a cash register and does not provide only services to the population is obliged to keep records of income and expenses in the company's accounting policy.

This requirement is mandatory and beneficial to the company itself.

If the accounting policy is not provided to the tax authorities, the decoding of expenses will be made by taxpayers.

To prevent this from happening, the documentation is drawn up correctly, and the attribution of expenses to the category of indirect ones is fully reasoned.

List of direct costs:

• Costs of purchased raw materialse, materials, services or works.
• Amounts at tariff rates, salaries of workers (according to the employment contract or as a percentage of the company's profit).
• Premiums and allowances, as well as any other incentive payments to staff.
• Accruals compensating for harmresulting from work, medical services and others.
• Services provided to employees free of charge: food, payment utilities, housing and more.
• Special clothing and footwear, protective suits and other equipment necessary for work.
• Salary, vacations, travel tickets, insurance.
• Supplements, tuition fees, refresher course.
• Reimbursement and compensation for workers' costs.

Anything that is not included in the list of direct costs according to the law can automatically be classified as indirect.

Features of accounting for wages and salaries

Manufacturing products in accounting has several main costs:

• Salary.
• Social payments.
• Material costs.
• Depreciation.
• Other expenses.

Remuneration is the main column. For correct calculation allowances, bonus additions and basic labor income, special calculation sheets are applied.

An individual approach is applied for each employee, taking into account:

• opening hours;
• volume of performed products;
• quality products;
• labor intensity process;
• skills, encouragement;
• allowances, retirement.

Ultimately, the final score is formed.

In addition to the calculation system, which depends on the hours of production, there are calculations based on the volume of sales, by contract and others.

The payment received is a direct expense and is recorded by the tax service. There are categories of workers that can be classified as indirect. These are those who are not in the company on a permanent basis, are not documented and do the work as needed.

It is profitable for the company to have an informal workforce, whose salary is placed in a "white envelope", since the tax will not have to be paid.

Such a salary has no benefit for the employee, since no seniority is formed, there are no pension accruals, and he risks losing his job without a good reason at any time.

Some large companies list their employees' wages as direct costs.

Indirect costs of manufacturing organizations

All expenses that are not recorded as direct expenses are included. As well as income regulated article 265 of the Tax Code.

Their accounting depends on the method of filling out the accounting - manual or automatic.

If the manual method is used, then the accountant independently enters into the Declaration all indirect costs, when, by whom and in what amount they were committed.

If this is an automatic distribution, then they will be calculated by the computer independently.

Trade organizations have the right to include in direct costs only the costs of products sold, which has already entered store shelves or was purchased.

If the product has not yet been sold, then the costs are included in the article of the unfinished trade process.

Indirect costs of service providers

Almost everything belongs to the indirect costs of such organizations.

It is fixed article 318 of the Tax Code of the Russian Federation.

All costs will be taken into account during the period they are incurred, the division into indirect and direct, as well as the costs of products sold and those in the manufacturing stage is not relevant.

Indirect costs of trade organizations

Direct costs of trade organizations include:

• The cost of purchasing goods and services. This is formed from: the contractual (wholesale) price of the goods and the costs of preparation for sale (packaging, labeling, packing, etc.).
• Selling costs (its delivery to the place of sale or to a reseller).

All other types of waste are indirect.

Accounting for indirect costs in the absence of income

The lack of income is due to two reasons:

• The first is: the company is doing its business correctly, but it has no buyers or the sale does not generate revenue. Taxation for such industries can only become disastrous and significantly worsen financial affairs.
• The second reason: the organization is doing the work, but the payment will happen after a while.

For instance, construction companies. Profit from the construction of an object and its lease will occur only after significant costs and a long period of time.

If the profit is calculated on a cash basis, then when taxes are deducted, the company goes into negative territory.

Sometimes tax inspectors do not collect taxsince the company has no income.

Leading experts in the country argue that it is prohibited to levy tax on a company that has no profit. This does not always come true.

How to justify an indirect expense?

If the indirect taxes are significant or significant, this gets the attention of the tax office.

The tax office will require within five calendar days to provide documents and extracts confirming the validity of the indirect costs.

The more detailed and convincing the report is, the less likely it will be necessary to recalculate the budget..

It is worth submitting statements and receipts and journals. For an expense to be classified as indirect, convince the service that it does not meet any of the criteria that refer it to direct.

Fare

Shipping costs are charged at the same time and to indirect costs, and to direct.

If we are talking about the delivery of goods to the buyer, that is, to wholesalers, stores or directly to your home, then this applies to indirect.

If we talk about the transportation of materials used at the production stage, then according to the article, this direct consumption.

To reduce the tax, you can evenly distribute the costs that went to the delivery of goods within the production among all expenses - refer to both sold and non-sale goods.

What are the indirect costs?

The costs of using and operating equipment, non-production costs, the cost of some goods.

Many industrial companies attribute to indirect costs: heating, electricity, depreciation, administrative and management staff, individual wages, lighting.

Indirect costs depend on the country where the organization realizes itself.

Turnover of the enterprise - the higher the income, the more space is allocated to indirect costs. From the field of activity: service sector or production sector.

When managing the accounting of an enterprise, much attention is paid to the distribution of costs between direct and indirect. With the right approach, you will avoid problems with the Tax Service and significantly reduce tax payments.

The main thing - compliance with the Tax Code of the Russian Federation and justification of accounting policies.

The classification of costs by the way they are reflected in the reporting into direct and indirect is widely used in modern Russian financial and tax accounting. It is this terminology that is adopted in the system of legislative regulation of accounting in the Russian Federation.

Direct costssuch costs are considered that can be directly and economically attributable to any product. Direct ones include:

direct material costs;

direct labor costs (direct labor costs);

other direct costs.

Direct material costs- these are the costs of raw materials, materials and purchased semi-finished products that are included in and become part of the finished product, their cost per unit of product can be determined directly and economically. Examples of direct material costs can be considered kinescopes and cases - when assembling televisions, boards and panels - in the manufacture of furniture, the purchase value of goods for sale - in trade.

If the cost of materials per unit of product is taken into account economically unprofitable (nails, glue, rivets, etc.), they are referred to supporting materials,expenses on them - to indirect general production costs, which are taken into account for the period and are distributed among certain types of products by special methods.

Direct labor costs- labor costs that can be directly and economically attributed to a particular finished product. We are talking about the wages of workers in assembly, piecework and similar jobs, where the time worked by an employee can be directly correlated with a specific product. The work of mechanics, supervisors and other support personnel is an indirect overhead cost.

The total cost of the organization may include other direct costs- for example, when the production of a specific product or order requires the rental of special equipment or a special kind of preparatory or restoration work for this equipment (setting up a machine for a specific product, special cooling, disposal of waste materials, etc.) In this case, the rent or the amount of expenses for the maintenance and operation of machinery and equipment will be attributed to other direct costs.

Direct material and direct labor costs are always variable, other direct costs can be fixed.

The amount of direct variable costs per unit of output does not depend on the volume of production. It can only be changed by increasing the intensity of labor and by saving material resources (revising the regulatory specifications).

Costs that cannot be considered direct are classified as indirect. Indirect costs are a set of costs that cannot be attributed to one specific product or type of product (depending on what is the object of the calculation), and they are distributed in one way or another between the products according to the developed methodology, which should be reflected in the accounting policy of the enterprise ... Indirect costs are distributed to one product in proportion to some base, which is chosen as the indicator that best characterizes the consumption of this type of resources (costs). In traditional industries (where it is easy to register physical output per unit of time), one hour of direct labor is most often taken as the distribution base. Where recording this indicator is impossible or impractical, it is possible to allocate each cost item - on a separate basis (for example, electricity costs - in proportion to the machine-hours worked). Allocation of overhead costs allows you to generate the full cost price, but depending on the allocation base, the results will vary.

In other words, indirect costs are all other than direct costs. Indirect costs can be variable (electricity, supply costs, indirect wage) or permanent (rent, insurance, taxes, depreciation). The structure of direct and indirect costs is shown in Fig. 4.

The division of indirect costs into production and non-production costs is also fundamental for accounting. In Russian financial and tax accounting, it is customary to reflect these two categories of costs in different accounts. For this, accounts 23 "Auxiliary production", 25 "General production costs" and 26 "General business expenses" are used.

Figure: 4. Direct and indirect costs

In management accounting, it is customary to divide into two groups - general production costs (ODA) include all indirect costs arising in production and service divisions - these are the costs of organizing, maintaining and managing production. All costs of non-production units are classified as non-production ones, since they are caused by management functions that are not related to the production organization function.

The attribution of costs to direct and indirect is determined by the adopted in the organization accounting policies and costing methods. For example, in some industries that produce homogeneous products (energy, coal and oil industries), all costs can be direct. In the service sector (for example, in financial consulting), on the contrary, it is rather difficult to identify direct costs, and all costs can be considered indirect. In general, in manufacturing enterprises and in the service sector (industries with high added value), indirect costs are significant, their shares in the cost structure exceed the shares of direct costs. In general, we can say that the ratio of direct and indirect costs is a function of the organization's industry affiliation and is associated with the technological features of production.

Any organization that manufactures and / or sells products has costs. If an entrepreneur uses the accrual method in determining profit and costs, then the Tax Code in Art. 318 and 320 requires separating costs in relation to direct or indirect costs.

• What is the point of this division in terms of paying taxes?
• What costs are considered direct and what are indirect?
• Who makes the final decision in this matter - tax authorities and entrepreneurs?
• Is this separation always necessary?

Let's clarify this material.

Why are costs allocated

The distribution of the organization's expenses on this basis is important for internal accounting policy, since it is directly reflected in taxation. They are included in the tax base when calculating income tax.

When calculating this tax, all expenses are important, and all of them will be taken into account sooner or later. But for business, time is often of the essence, and for direct and indirect taxes, the time of recording is different.

• Direct costs need to be recognized for tax accounting exactly when they occurred. They have to be distributed between the sold and the product and the pending implementation, completed or unfinished work. So, if the cost of expenses is included in the sale of goods or payment for work, then it will be possible to write off them only upon completion, perhaps it will last for several months or even years.
• Indirect costs the accounting department has the right to write off in the same accounting period, they are fully referred to as tax deductible.

IMPORTANT NUANCE! Expenses for the provision of services, even if they are attributed to direct ones, are recognized in the current period, and not distributed, since the service is consumed in the process of its provision, its result is not expressed materially (the basis is clause 5 of Art. 38, Art. 313, para. 3 clause 2 of article 318 of the Tax Code of the Russian Federation, letter from the Ministry of Finance of Russia dated June 15, 2011 No. 03-03-06 / 1/348).

What are direct and what are indirect costs

The Tax Code does not provide clear regulations on which costs to be attributed to which type. The right to count certain types of costs straight provided by the organizations themselves, only they must substantiate it in their internal documentation, and the manager must approve.

FROM indirect expenses are simpler - all expenses that are not considered direct or non-operating are considered indirect.

In production and trade, the composition of these types of costs differs significantly.

Direct and indirect costs in the production of goods and services

When determining what type to include production costs, the manager should take into account that the direct, as a rule, should include those costs that are used for the release of goods (services) and their promotion, sales. The specifics of the activity, the industry-specific features of the production process are also important. Approximate transfer of direct costs manufacturing firms might look like this.

1. Material costs:
   • payment for purchased raw materials;
   • production materials costs;
   • purchase of equipment and components;
   • the cost of semi-finished products if they are processed in the production process.
2. Financial costs:
   • salaries for staff;
   • contributions to social and insurance funds.
3. Depreciation costs - a natural decrease in the value of fixed assets due to their "workability" over time.

NOTE! If an organization subcontracts outside people for the production of work, then the payment for this activity is also considered direct costs, since it has a direct connection with production, despite the fact that it is not included in the approximate list in Article 318 of the Tax Code.

Non-operating expenses are accounted for separately.

All other types of expenses not directly related to production are considered as indirect.

IMPORTANT! Sometimes there are “borderline” situations of cost allocation, in such cases it is necessary to justify the management. However, it should be remembered that, according to the law, indirect costs cannot be classified as costs that are objectively related to production, for example, funds for the purchase of raw materials, taking into account the cost of a unit of output.

Direct and indirect costs in trade

Trade relations provide for a fixed list of direct costs, approved by Art. 320 of the Tax Code of the Russian Federation. Here, the "initiative" of the leadership is illegal. According to the legislation, in trading activities to direct costs should include such.

1. Costs when purchasing goods: the way it is determined lies with the organization itself, in particular, these are:
   • purchase price;
   • packing costs;
   • the cost of packaging and containers;
   • payment for warehouse services, etc.
2. Delivery costs to the buyer's warehouse, if these funds are not included in the cost of the goods. In other cases, transportation costs are more correctly considered indirect, since they are not related to the sale of goods.

Non-operating expenses are also subject to separate accounting.

The rest of the costs will be calculated indirect - they directly reduce the profit of a given reporting tax period.

What is more profitable for the organization?

From a monetary point of view, it is more practical for any manager to attribute as many costs as possible to indirect costs: after all, then the base for income tax in a specific period will decrease (clause 2 of article 318 of the Tax Code). Tax authoritiesnaturally support the opposite position.

A list of direct costs must be approved in the regulatory framework of the organization, it does not have to coincide with the recommendation, but there must certainly be a justification for this distribution. If chosen, the management has the right to classify as indirect costs only those costs that cannot be considered direct.

NOTE! From the point of view of tax authorities, in disputable situations, the expense should be recognized as direct - this list is open, - rather than unreasonably expanding the number of indirect costs. A tax, usually recognized as indirect, can be considered direct, but the opposite is unacceptable.

There are expenses, no income

It happens that in one or more of the reporting periods, the organization was unable to achieve profit or even found itself at a loss. How to record expenses in such cases?

The answer is logical: since there are no incomes, it means that there were no direct costs for production or sales during this period. This is due to the requirements of the Tax Code for direct costs:

• justification from the point of view of economics;
• confirmation by documents;
• focus on financial gain.

Since profits - financial benefits - were not received by the organization in this period, only indirect costs should be recognized, they are not related to earned revenue.

An expense that even did not bring profit in a given period can also be justified, for example, directed to future income. Thus, there are no contradictions for recognizing expenses in a non-profitable period as indirect (letters of the Ministry of Finance of the Russian Federation dated 08.25.2010 No. 03-03-06 / 1/565, dated 05.21.2010 No. 03-03-06 / 1/341, dated 08.12.2006 No. 03-03-04 / 1/821).

NOTE! If it is not possible to prove the economic justification (focus on future profit) of the expense in the period when there is no financial income, then it cannot be recognized either direct or indirect (letters of the Federal Tax Service of Russia for Moscow dated 12.11.07 No. 20-12 / 107022, dated 26.12.06 No. 20-12 / 115144).

Calculating direct costs

For a direct cost to have an effect on the reduction of the tax base in the current period, it must relate to the products sold in this period or work in this period perfect. Costs cannot be accounted for as direct costs and cannot be written off if:

• production has not been completed;
• products are manufactured, but are in stock;
• products have already been shipped but not yet sold, etc.

We calculate the amount that manufacturing firm has the right to deduct from the tax base. The following formula is suitable for this:

PRUNP \u003d SPR - PRNPR - PRS - PRNR

• PRUNP - direct expenses that reduce income tax in reporting period;
• SPR - the sum of all direct costs;
• ПРНПр - direct costs of production in progress at the end of the period;
• PRS - direct costs of products contained in warehouses;
• PRONR - direct costs of products that have passed the shipment, which have not yet been sold, that is, the ownership of it has not yet passed from the seller to the purchaser.

For trade organizations formula the calculation of direct costs will be slightly different:

PRSP \u003d (PRDP + OPP) - PROS

• PRSPP - direct costs that reduce income tax in a given tax period;
• PR - direct costs for a given period;
• PPP - direct costs that have been transferred from the previous period;
• PROS - direct costs of the balance in the warehouse (including goods on their way to the warehouse, as well as only those that are going to the buyer, but have not yet been redeemed by him).

In the current economic situation, careful control over the issues of accounting for expenses, which are directly related to the optimization of taxation and the efficiency of organizations, is simply necessary. The accounting procedure and rules for submitting information on the costs of commercial companies, other than insurance and credit, and the classification of costs are described in the Regulation on accounting PBU 10/99 "Expenses of the organization" and Instructions to the Chart of accounts of financial and economic activities of organizations. They are designed to bring 2 types of accounting as close as possible - tax and accounting, although this is not always beneficial for organizations.

In the regulations that regulate the accounting of government organizations, the concepts of “income” and “expenses” are not clearly disclosed. Expenditure reporting is formed in accordance with the Orders of the Ministry of Finance and the federal standard "Conceptual framework for accounting and reporting for public sector organizations." Failure to understand the difference between indirect and direct costs, erroneous reporting can sharply limit the circle of sponsors, creditors, become a significant obstacle to the development of an organization's activities, increase the tax burden and distort tax accounting data.

Direct costs - what are they?

Effective cost management is a strategic goal of any enterprise. Competent use of the rules of accounting and formation of costs will optimize them and reduce tax payments. The expenses of a commercial enterprise, according to Accounting Regulation 10/99, are called a decrease in economic benefits after the disposal of any assets, for example, money, property, and the formation of liabilities that lead to a decrease in capital (except if the decrease in contributions is due to the decision of the participants, owners of property). Costs are often identified with costs and expenses. Expenses in government organizations mean a decrease in the useful potential of assets, a decrease in economic benefits for the reporting period as a result of the occurrence of liabilities, consumption of assets, but without taking into account the decrease in capital due to the seizure of property by the founder or owner.

The classification of income and expenses of commercial enterprises is set out in PBU 10/99, and in budgetary organizations it is regulated by the Budget Code of the Russian Federation. The concept of direct and indirect costs in tax accounting is slightly different. Here they are recognized as justified and documented, economically justified costs for the implementation of the taxpayer's activities. In order for an expense to be recognized in tax accounting, it is necessary to fulfill 3 conditions: the justification of the costs, documentary evidence, the target direction - for the implementation of activities aimed at generating income. But accounting has its own requirements in this regard:

• expenses incurred in accordance with the contract, the requirement of legal acts, principles of business turnover;
• the amount can be determined;
• confidence that as a result of a particular operation, a decrease in the economic benefits of the enterprise will be achieved.

That is, the costs in accounting and tax accounting are different. For example, tax accounting does not take into account all expenses that are recognized by accounting.

Direct costs include costs that can be attributed to a specific object of taxation, those that affect the cost and are fixed as they are realized finished goodsdirectly related to the release of products or the performance of work, the provision of services. They must be written off in the period when the products are sold, even if the money was received in the next tax period. In accounting, a clear division of expenses into direct and indirect is not provided for by legislation, although in practice it is this classification that is often used.

Advice: When forming reporting, it is important to remember that after the changes in Ch. 25 of the Tax Code of the Russian Federation by Law No. 58-FZ, the composition of direct and indirect costs is determined in the same way for the purposes of accounting and tax accounting. However, in some cases, indirect costs may still differ (for example, the cost of work in progress, goods shipped, finished goods).

Indirect costs - what is it?

Indirect costs include documented costs that cannot be directly attributed to a specific operation, tied to any one type of product. They are distributed by types of goods and work performed indirectly (conditionally) or written off in full to financial results at the end of the reporting period.

On the one hand, they are necessary for the development of the organization and the normal conduct of production, and on the other, they represent an important reserve for reducing the cost of production. Indirect costs require allocation among several tax bases for income tax. They are written off as a decrease in profit immediately. In accounting, indirect costs are divided into general production (related to the maintenance and management of production), general business (management of the company as a whole), or into expenses for ordinary activities and other expenses.

What is the purpose of the division into direct and indirect costs?

According to the Tax Code of the Russian Federation, taxpayers who determine expenses and income on an accrual basis must classify costs as direct and indirect. Their composition largely depends on the characteristics, specifics of production and technological processes. The correct division into different types is one of the measures of tax optimization, because indirect costs in tax accounting are recognized as costs of the reporting period and do not affect the assessment of work in progress. Direct costs often remain unaccounted for in the process of work in progress and among the rest of unsold products. Consequently, the amount of indirect income tax expense increases.

Therefore, it is more profitable to attribute as many costs as possible to indirect ones, but this division must necessarily be economically justified. At the same time, if during the reporting period the company receives little or no income at all, a large number of indirect expenses will lead to the formation of a loss, and a positive economic effect from the distribution of expenses for different types will not be achieved. Also, the classification of costs is necessary for their optimal distribution, reducing tax burden and creating competent correct reporting. According to paragraph 1 of Art. 318 of the Tax Code of the Russian Federation, a company can independently determine which costs are to be recognized as direct (all the rest will be classified as indirect). It is very important to make the correct classification and fix the chosen rule in the accounting policy of the organization.

What are direct costs?

Earlier in ch. 25 of the Tax Code of the Russian Federation contained strict regulation of direct and indirect costs. Direct costs were considered material costs of remuneration of employees involved in the production or performance of work, depreciation on funds used in production, and the amount of the unified social tax. But since January 1, 2005, the Federal Law "On Amendments to Chapters 23 and 25 of Part Two of the Tax Code Russian Federation and some other legislative acts on taxes and fees ”. According to it, each company gets the right to independently determine direct costs, fixing their list in the accounting policy for tax purposes. That is, the list of direct costs in legislative acts is advisory in nature. They are referred to the costs of the current reporting period as services and products are sold:

1. Material costs for the purchase of raw materials, materials for production, the provision of services, if they are a necessary component, as well as the purchase of components, semi-finished products that undergo additional processing.
2. Salary of employees who are involved in the production process and performance of work, pension insurance costs, mandatory social insurance in connection with motherhood, due to temporary disability, etc.
3. The amounts of the gradual transfer of the cost of fixed assets to the cost of goods and services (depreciation), which are used in the production of goods or the provision of services.

Advice: companies that have a long production cycle and have large work in progress should be especially attentive to the classification of expenses as a method of tax optimization.

What are indirect costs?

Before making changes to Ch. 25 of the Tax Code of the Russian Federation, indirect costs were not allocated to manufactured products, services already rendered or work performed, but were written off as expenses in the reporting period when they were incurred. After the amendments to the tax legislation were introduced in January 2005, including with the aim of optimizing the calculation of costs, the resources spent for the manufacture of certain types of products are considered indirect costs. They are distributed according to the place of origin and types of products.

The entire volume of costs, except for direct and non-operating costs, which the taxpayer incurs during the reporting period, refers to indirect costs. The manager can approve the list himself and fix it in the accounting policy of the organization. They will fully relate to the current reporting period. To reduce the tax burden, indirect costs often include:

• the salary of shop managers (if the employee's salary is not related to the sale of goods and production);
• vacation pay of workers employed in production (if this is provided for by the accounting policy);
• salary during the repair period (subject to the performance of an auxiliary function, for example, during repair work, modernization of production);
• salaries of workers when providing services to a third-party company (after all, their activities are not related to production).

Are transportation costs direct or indirect?

Shipping costs for the delivery of purchased goods to the warehouse of a trade organization, as well as raw materials and supplies, are considered direct only if they are not included in the price of the goods and are accounted for separately. If a company produces or sells different types of goods with unequal shipping costs, consider whether to include shipping costs in the price. Other types of transport costs are considered indirect - delivery to the warehouse, store, where the buyer will buy them, transportation of goods between the warehouses of the trade organization itself after their posting. If the company fully recognizes the transportation costs for the delivery of goods from the warehouse of the first supplier to the warehouse of the buyer as indirect, it may have conflicts with the tax service, so in this case it is more expedient to recognize the entire amount of transportation costs as direct.

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The activities of any organization that operates within a market economy, regardless of its form and scope, provides for the receipt of income and the implementation of direct and indirect costs. They are one of the basic values \u200b\u200bfor calculating indicators. financial results work of the company. The correct distribution of expenses for direct and indirect will make it possible not only to correctly keep records, reduce income tax, but also to optimize the work of the organization as a whole.

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