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Tmz decoding in accounting. Accounting for inventories. Classification of inventories

MINISTRY OF EDUCATION AND SCIENCE OF THE REPUBLIC OF KAZAKHSTAN

KOSTANAY AGRICULTURAL COLLEGE

TECHNICAL AND ECONOMIC DEPARTMENT

COURSE WORK

Subject "Accounting"

Topic: "Accounting for inventories"

Artist: Kazenova Sarah

Group B student - 31

Head: Amelina L.E.

Zatobolsk, 2010

Introduction

The main task of manufacturing enterprises is the production of products that are partially used at the enterprise itself, but mainly sold to other enterprises, organizations and directly to the public.

For the organization of production, means of labor, objects of labor and labor power are necessary. Means and objects of labor are acquired from outside or produced by the enterprise itself. The labor force is the workers and specialists accepted by the enterprise by order or on a contract basis.

Enterprises sell their products, receiving income from the sale. If these incomes exceed the costs of their production, then they receive a profit that is created in the production process and is revealed in the process of implementation. If the revenue is less than the costs incurred, then there is a loss. The circulation of funds occurs continuously and consists of the main economic processes: supply, production and sale, as a result of which objects of labor from one form pass into another.

To organize the successful and continuous operation of the enterprise, it is necessary to have production reserves, which are provided to the enterprise in the procurement process.

The procurement process is a set of operations to provide the enterprise with the objects of labor necessary for the manufacture of products. The company purchases materials, fuel and other items of labor from suppliers.

The enterprise pays suppliers for the cost of purchased items at selling prices, which for it are the purchase or procurement cost. In addition, it bears the costs caused by procurement operations, for example, the costs of paying for the transportation of acquired valuables, their loading and unloading, delivery from railway stations (piers, etc.) to a warehouse, and a number of others. All these costs are called transportation costs.

Therefore, the main tasks of accounting for the procurement process are:

1) identification of all procurement costs;

2) determination of the actual cost of prepared materials.

The movement of material assets in accounting is reflected at the actual cost. The actual cost of acquired material assets consists of the purchase price and transport and procurement costs. The volume of the procurement process, expressed in natural terms, is accounted for in analytical accounts, and in monetary terms - in active synthetic accounts.

The debit of these synthetic accounts takes into account the purchase value of the purchased items, as well as transport and procurement costs for their delivery.

Inventories are assets that:

(a) are held for sale in the ordinary course of business;

b) are in the process of being produced for sale;

c) exist in the form of basic or auxiliary materials intended for use in the production process or in the performance of works and services.

At the time of the inventory, goods for which the company does not have ownership rights may be identified. These are goods prepared according to the client's order, paid for by him (ie the act of purchase and sale is completed), belonging to him and awaiting shipment. It is necessary to fix their implementation. Another category of goods that are not included in inventories are goods on consignment.

Consignment is the placement by the owner, who is called the committent or consignee, of his goods in the warehouses of another company. The consignee should not include such goods in his inventories, since until the moment of sale these goods are the property of the consignor.

Inventories are valued at the lower cost and net worth implementation.

1. Farm characteristics

Under IFRS 2, inventories must be measured at the lower of cost and net realizable value.

The cost of inventory includes all acquisition costs, processing costs and other costs incurred to bring inventory to its present location. Acquisition costs, in accordance with SBU 7 “Inventory Accounting”, include the purchase price, import duties, commissions paid to supply organizations, transportation and procurement costs and other costs directly related to the acquisition of inventories (trade discounts , refunds of overpayments and other similar adjustments are deducted when determining the acquisition costs).

In accordance with paragraph 4 of AAS 7, the net realizable value of inventory is equal to the estimated selling price in the ordinary course of business minus the cost of picking and arranging the sale. In other words (in accordance with paragraph 25 of IFRS 2), materials are measured at net realizable value if the cost of inventories may not be recoverable, because inventories are damaged, wholly or partly obsolete and therefore their price has decreased, and the estimated cost of pre-sale preparation or implementation of the sale may also increase. In this case, the carrying amount of inventories will not exceed the amount expected to be received from the sale or use of inventories.

Materials at the time of acquisition are reflected at the actual cost of their acquisition (in synthetic accounting) or accounting prices (in analytical accounting).

The actual cost of purchasing materials is the sum of the purchase price and the costs of procurement and delivery of these stocks by the entity.

When accounting for materials at accounting prices (planned cost of acquisition, average purchase prices, etc.), the difference between the cost of inventory at accounting prices and the actual cost of acquiring inventory is calculated on the same account.

Accounting for materials in the balance sheet is shown at actual cost, according to the same estimate, they are taken into account in synthetic accounting, and in analytical accounting - at fixed accounting prices (contractual or planned - estimated).

If accounting for materials is organized at contractual prices, then their actual cost is made up of the sum of materials at these prices plus transport and procurement costs (TZR). If materials are accounted for at the planned cost of acquisition, then the actual cost of inventory will be the sum of the cost of materials at these prices, plus or minus the deviations of the actual cost from the cost at accounting prices. Planning and settlement prices are developed by the entity itself on the basis of contractual prices, taking into account the planned size of the TZR.

When determining the cost of materials released into production, the valuation methods recommended by SBU 7 “Inventory Accounting” and IFRS 2 “Inventories” can be used:

Stocks are recorded on account 1300 "Stocks"

No. p / p	Accounts (IFRS - 2)	Account name	Analytics
1	1310	"Raw materials"	By storage locations
2	1311	"Materials"	By storage locations
3	1312	"Purchased semi-finished products and components"	By storage locations
4	1313	"Fuel"	By storage locations
5	1314	"Container and container materials"	By storage locations
6	1315	"Spare parts"	By storage locations
7	1316	"Other materials"	By storage locations
8	1317	"Materials transferred for processing"	By storage locations
9	1318	« Construction Materials and others"	By storage locations
10	1320	"Finished products"	By storage locations
11	1330	"Products"	By storage locations
12	1340	"Unfinished production"	By orders, objects
13	1350	"Other stocks"	By storage locations
14	1360	"Reserve for inventory write-off"

2. Accounting for inventory

2.1 Inventories, their classification and evaluation

Inventories are assets in the form of:

a) stocks of raw materials, materials, purchased semi-finished products and components, fuel, packaging and packaging materials, spare parts and other materials intended for use in production or in the performance of works and services;

b) work in progress;

c) finished products, goods intended for sale in the course of the entity's activities.

Accounting for inventory items faces the following tasks: control over the timely and complete posting of valuables, their safety in places of their storage, timely and complete documentation of all transactions for the movement of valuables, timely and correct determination of transport and procurement costs and the actual cost of prepared valuables, control for the uniform and correct write-off of TZR for production costs; control over the state of warehouse stocks, identification and sale of material values unnecessary to the enterprise in order to mobilize internal resources, obtaining accurate information about the balances and movement of valuables in places of their storage.

According to the functional role and purpose in the production process, all material values divided into main and auxiliary.

Basic - these are materials that are materially included in the manufactured products, forming its material basis (flour when baking bread)

In the process of production, along with the means of labor, objects of labor are involved, which act as inventories.

Unlike means of labor, objects of labor participate in the production process only once and their value is fully included in the cost of production, constituting its material basis.

TMZ are assets in the form of:

1) stocks of raw materials, materials, purchased semi-finished products, and components, structures and parts, fuel, containers and military materials, stocks of parts and other materials intended for use in production or performance of works and services;

2) work in progress, works and services;

finished products and goods intended for sale in the course of the entity's activities.

According to the functional role and purpose in the production process, TMZ are divided into:

1) basic - these are materials that are materially included in the manufacture of products, forming its material basis (flour when baking bread);

2) auxiliary - these are materials that are part of the manufactured products, but, unlike the main materials, do not create a material basis for production products. These materials are used as components to the basic materials to give the product the necessary qualities (varnishes, glue)

Accounting for all types of inventories is carried out on the main, active, synthetic, inventory accounts 1310-1350. For each household account. subject and open the required number of sub-accounts and analytical accounts for accounting materials. Inventory is valued at the lower of cost and net realizable value. The actual cost of inventories consists of the accounting price and transportation and procurement costs. Inventories are accepted for accounting according to their actual cost, which, for valuables purchased for a fee, is determined on the basis of the acquisition costs (excluding VAT and other reimbursable taxes).

To actual acquisition costs inventories include:

Amounts paid in accordance with the contract to the supplier (seller);

Costs for information and consulting services, remuneration of the intermediary organization;

Customs duties, etc., as well as non-refundable taxes;

Costs for the procurement and delivery of inventories to the place of their use, including insurance costs (including the costs of maintaining a procurement and storage apparatus, for transport services for their delivery to the place of use (when they are not included in the contract price) , the cost of paying interest on supplier loans ( commercial loan), as well as on payment of interest on borrowed funds (if they are associated with the acquisition of reserves and accrued before they are accepted for accounting), etc. expenses;

Costs for bringing stocks to a state in which they are suitable for use for the planned purposes (for underworking, sorting, packaging and improving the technical characteristics of the received stocks, not related to the production of products, performance of work and provision of services);

Other costs directly related to the acquisition of inventories.

The net realizable value of inventories is the estimated selling price in the ordinary course of business minus the cost of assembling and arranging their sale.

Net realizable value is used when cost cannot be recovered due to:

TMZ data was corrupted;

Partially or completely obsolete;

The selling price has dropped.

Account correspondence:

Debit Credit

3310 purchased TMZ from suppliers

3310 for the amount of VAT

1310-1350 1250 purchased materials for accountable amounts

1310-1350 6220 Inventory received free of charge

8110 1310 materials written off to the main production

7210 1310 materials written off for administrative expenses

3310 1030 transferred to suppliers for purchased inventories.

To determine the lower of cost and net realizable value of the GP, will be below its cost and net realizable value.

The following methods can be used to determine the lower of cost and net realizable value of inventories:

1) Itemized method, in which the smallest value is selected from the book value and net realizable value of each item of MTZ;

2) the method of the main material groups, in which the smallest value is selected from the book value and net realizable value of the group of inventories;

3) The method of the general level of stocks - the smallest value is selected from the book value and net realizable value of all inventories.

For example: The company sells televisions. The stock is 6 TVs, which are divided into 3 types. TVs of type "A" became difficult to sell, because. according to new technologies, such televisions are considered obsolete. Based on the indicated cost and net realizable value, we will reflect the correct balance of TVs0, which must be reflected in the balance sheet using the above methods

The best, that is, the first method that really reflects the situation, but it is laborious; the most suitable second.

Methods for measuring the cost of inventory: 1) Specific identification method - involves the calculation of the cost of items of inventory, which are usually not interchangeable, and goods and services produced and intended for special projects or orders.

2) Weighted average cost method - the cost of inventory is calculated by determining the average cost of similar items available at the beginning of the reporting period and acquired during this period.

3) Method of valuation at first purchase prices (FIFO) - first of all, the cost of inventories is debited from the cost of inventories acquired or produced first. period there are deviations.

Receipt is made out on the basis of invoices, bills of lading, waybills for shipping, etc. The write-off is made out by invoices, write-off certificates, etc. Synthetic accounting is maintained in the statement for accounting for the movement of inventories in monetary terms.

Lecture 7. Accounting for fixed assets (IFRS 16).

Long-term assets are fixed assets and intangible assets: having a useful life of more than one year; used for production, administrative purposes or for leasing; not intended for resale.

Fixed assets (tangible assets): non-expendable assets that have a physical natural form: land, buildings, structures, equipment, vehicles, natural resources, etc., which:

used by a company to produce or supply goods and services; for leasing to other companies, or for administrative purposes; and who

expected to be used for more than one period.

Tangible assets are divided into three groups:

Subject to depreciation (buildings, structures, equipment, furniture, fixtures);

Subject to depletion (deposits of minerals, forest lands);

Land not subject to depreciation or depletion.

The main issues in accounting for fixed assets are:

a) Conditions for the recognition of assets.

An item of property, plant and equipment should be recognized as an asset when:

it is highly probable that the entity will receive the future economic benefits associated with the asset, and

the cost of the asset to the company can be estimated reliably.

b) Determination of book value and depreciation charges

Book value - the amount at which the asset is reflected in the balance sheet, i.e. original cost less accumulated depreciation.

Depreciation - is the systematic decrease in the depreciable cost of an asset over its useful life.

Depreciable cost - the cost of an asset or other amount reported in the accounts in lieu of cost, less salvage value.

Useful life:

the expected (estimated) period of use of the company's assets, or

the number of units that the company expects to produce using the asset.

c) Definition and treatment of other changes in carrying amount

Reassessment, modernization, growth (additions).

IAS 16 Property, Plant and Equipment: An item of property, plant and equipment that can be recognized as an asset must be measured at cost.

Actual The cost of an item of property, plant and equipment includes the purchase price, including import duties and non-refundable purchase taxes, and any direct costs to bring the asset to working condition for its intended use; any trade discounts are deducted when determining the purchase price.

Examples of direct costs are:

a) the cost of preparing the site (foundation);

b) primary costs for delivery and unloading;

c) installation costs;

d) the cost of professional services, such as the work of architects and engineers.

IAS 16: Initial operating losses incurred before the performance of the property, plant and equipment is recognized as an expense.

The cost of fixed assets produced company, is determined on the basis of the same principles as when acquiring assets. If a company produces similar assets for sale in the course of its operations, the value of the asset is usually equal to its cost. Thus, any internal gain in the calculation of the value of such fixed assets is excluded.

The compliance principle requires that the cost of acquiring fixed assets be deferred and held in asset accounts until income is generated. Once the assets have been put into operation and have begun to play their role in generating income, the cost of the acquisition begins to be aligned with income through depreciation.

The general principles of asset valuation do not depend on the circumstances or method of acquisition of fixed assets.

Fixed assets can be acquired in several ways:

for money;

on credit;

in exchange for equity shares in the acquiring company;

as a gift from another subject;

through construction;

in exchange for other assets.

Accounting for fixed assets, regardless of the organizational and legal form of ownership of the enterprise, is organized in the accounting department by classification groups in the context of inventory objects. Under inventory object is understood as a complete device, object or complex of objects with all devices and accessories to it to perform the functions assigned to this object.

Each inventory item is assigned inventory number, which provides control over the safety of fixed assets.

Fixed assets at the enterprise are formed as a result of:

* construction of industrial and residential buildings, structures, transmission devices;

* acquisition of machinery, equipment, furniture;

transfer of young animals to the main herd;

enrollment in the fixed assets of perennial plantations;

gratuitous receipts from other entities and individuals;

long-term leased objects (after full payment of the contract price);

from the founders as contributions to authorized capital;

as a result of trade transactions.

Incoming fixed assets are accepted by a commission appointed by the head of the organization. For registration of acceptance, the commission is in one copy act of acceptance and transfer of fixed assets (f. OS-1) for each object separately.

The act is drawn up for each object, it is accompanied by technical documentation for this object, which, after opening the accounting department of the inventory card (f. OS-5) transferred to the appropriate department, shop of the enterprise at the place of operation.

Registered cards are placed in file cabinet fixed assets.

In places where fixed assets are used, responsible persons conduct inventory lists fixed assets (f. OS-9), which provides brief information about fixed assets and accounting for their changes.

On therented fixed assets in the tenant's accounting department inventory cards do not open. For analytical accounting of received fixed assets, copies of the inventory cards of the lessor or an extract from the inventory book are used.

Disposal of property, plant and equipment draw up an act (in this case, an act for the write-off of fixed assets of the form OS-4 can also be used) and reflected in the inventory card, and then it is removed from the file cabinet. Causes withdrawals can be:

Liquidation of the inventory object completely during disassembly or dismantling due to dilapidation and wear, as well as in case of natural disasters;

Liquidation of a part of the inventory object in connection with rebuilding, re-equipment, modernization;

Transfer of fixed assets to other enterprises upon sale or gratuitous transfer;

Lack of fixed assets.

Accounting for fixed assets is kept on active accounts of group 2410 "Fixed assets". The debit of these accounts reflects the presence and new receipt of fixed assets, and the credit - retirement, write-off.

The fixed assets of the enterprise in the production process gradually wear out. Wear - a cost indicator of the loss of physical qualities by objects of fixed assets or the loss of technical and economic properties, and as a result, the cost.

In accordance with one of the most important basic accounting principles, the matching principle, the cost of fixed assets is allocated to the periods during which the enterprise receives benefits from their use, through depreciation. Whichever depreciation method is chosen, it should result in a systematic and rational allocation of the cost of the asset (less its salvage value) over the useful life of the asset.

In determining the useful life, many factors must be taken into account, such as technological changes, normal deterioration, actual physical use, legal and other restrictions on the ability to use the asset. The depreciation method is defined as a function of time (eg technological changes or normal degradation) or as a function of actual physical use.

Since depreciation accounting implies a cost allocation strategy, it does not have to reflect the change in the value of the depreciating asset. Thus, with the exception of land, which has an indefinite useful life, all fixed assets should be subject to depreciation even if (as sometimes happens, especially during periods of general inflation) their nominal or real price rises.

Complex assets, such as buildings with multiple elements, may have different useful lives and therefore must be accounted for in different accounts and the depreciation periods for each of the elements must be determined separately.

IFRS No. 16 includes almost all depreciation methods in full:

1) The method of uniform (straight-line) depreciation of an object involves a uniform write-off (distribution) to the costs of production or circulation of its value during its service life. The method is based on the premise that wear depends on the length of the service life of the object.

The amount of depreciation expense for each period is calculated by dividing the depreciable cost (the initial cost of the item minus its salvage value) by the number of reporting periods of the item's operation. The depreciation rate is constant.

2) The method of accrual by the sum of numbers - the cumulative method (from Latin - increase, accumulation) is determined by the sum of the years of the life of the object, which is the denominator in the calculated coefficient.

With this method, the amount of depreciation (depreciation) increases sharply in the first years of using the machine and decreases in subsequent years.

3) The regressive method makes it possible to accrue most of the depreciation in the first years of the operation of fixed assets, but their depreciation period drags on indefinitely. When the object is liquidated, the non-depreciable part will express the salvage value (the cost of scrap metal, suitable spare parts, and other materials). Enterprises must credit suitable spare parts, materials, scrap metal in the assessment of possible use and sale. Sometimes the regressive method can be combined with the uniform method. For the first years, depreciation is charged on the regressive method, and then on the proportional method.

3A) Double regression method . This method applies twice the wear rate compared to the rate used in the straight-line (uniform) method. Under the declining balance method with twice the write-off rate, the depreciation rate will be 20% (2x10). This flat rate (20%) is applied to the residual value (original minus depreciation) at the end of each year. It is assumed that the salvage value is not taken into account when calculating depreciation, except in the last year, when the amount of depreciation is limited to the amount required for repayment cost.

3B) The method of calculating depreciation in proportion to the volume of work performed (production) is based on the fact that depreciation is only the result of operation and periods of time do not play any role in the process of its calculation. The cost of each unit of products, works and services produced at the enterprise "absorbs" an equal amount of the value of fixed assets, with the help of which products, works and services were produced.

To account for the depreciation of fixed assets, passive accounts 2420 “Depreciation of fixed assets” are used. The credit reflects the amount of accumulated depreciation and accrued depreciation in the reporting period, and the debit reflects the write-off of depreciation on retired fixed assets.

In the process of operation, fixed assets can be repaired, modernized, etc., resulting in costs that are called subsequent. Such costs may be accounted for in one of the following ways:

Recognized as an expense

Are capitalized

Recognized as a reduction in accumulated depreciation

Costs may be added to the carrying amount of the related asset only when it can be more probably determined that future economic benefits in excess of those originally expected from the asset will be received by the entity.

Subsequent costs associated with an item of property, plant and equipment are recognized as an asset only when they improve the condition of the asset, increasing its performance beyond the originally calculated norms. Examples of improvements that lead to increased future economic benefits are:

1. modification of an item of fixed assets that increases its useful life, including an increase in its capacity;

2. improvement of parts and components of machines to achieve a significant improvement in the quality of products; and

3. introduction of new production processes, providing a significant reduction in previously calculated production costs.

Maintenance and repair costs are current expenses. To account for such costs, two methods are used: with the formation and without the formation of a reserve fund.

IFRS 16 Property, Plant and Equipment contains provisions that allow entities to revalue property, plant and equipment. Two options for accounting for fixed assets:

1. Standard accounting treatment: After initial recognition as an asset, property, plant and equipment are accounted for at their original cost less accumulated wear and tear, subject to the requirement to partially write down the cost of the asset to its recoverable amount.

2. Alternative accounting treatment: After initial recognition as an asset, property, plant and equipment is carried at revalued value, being their fair value at the revaluation date, less any subsequent accumulated depreciation. Revaluation is a valid alternative, however, if assets have been revalued once, they must be subject to this procedure every time their real price differs from their recorded value.

Revaluations should be made at a sufficiently regular interval so that the carrying amount does not differ materially from fair value at the reporting date.

Fair value of land and buildings is usually their market value for current use, which involves the continued use of the asset in the same or similar business activity. This value is determined by an appraisal, usually performed professional appraisers.

Frequency of revaluations depends on changes in the fair value of property, plant and equipment. When the fair value of an asset's revaluation differs materially from its carrying amount, an additional revaluation is required.

When an item of property, plant and equipment is revalued, the accumulated depreciation at the revaluation date is adjusted in proportion to the change in the asset's cost so that, after the revaluation, the carrying amount ultimately equals fair value. This method is often used when an asset is brought to its depreciated replacement cost by indexing; : or written off to the cost of the asset and the net amount remeasured. This method is used, for example, for buildings that are revalued to their market value.

If a separate item of property, plant and equipment is revalued, then the whole group fixed assets to which the asset belongs. Revaluation is carried out simultaneously in order to exclude the possibility of: selective revaluation of assets;

presentation in the reporting of items that are the sum of fixed assets valued at actual cost and at revalued cost on different dates.

One of the necessary elements of the production process of any enterprise is the objects of labor, which are ready-made natural or pre-processed material resources: raw materials and materials, semi-finished products, fuel, spare parts, etc. In the production process, they act as objects of human influence using the available means of labor in order to create a product for consumption.

In contrast to fixed assets, material resources participate in the production process once and transfer their value to the product (service) produced in full. Therefore, after each production process, they have to be replaced with new specimens of the same species.

At enterprises, material resources occupy a significant share in the cost of manufactured products (services rendered). Therefore, their accounting, storage and rational use in the production process are important in improving the efficiency of the financial and economic activities of the enterprise.

Accounting for inventories at enterprises is organized in accordance with the standard accounting No. 7 "Accounting for inventories", which defines the scope of the standard, changes in inventory, their cost and assessment, recognition of expenses, disclosure in reporting.

Inventories are assets in the form of:

Stocks of raw materials, materials, purchased semi-finished products and components, fuel, packaging and packaging materials, spare parts, other materials intended for use in production or in the performance of works and services;

work in progress;

Finished products, goods intended for sale in the course of the enterprise.

For the correct organization of inventory accounting, their scientifically based classification, evaluation and choice of accounting unit are important.

According to the functional role and purpose in the production process, all stocks are divided into main and auxiliary.

Basic - these are materials that are materially included in the manufactured products, forming its material basis.

Auxiliary - these are materials that are part of the manufactured products, but, unlike the main materials, do not create the material basis of the manufactured products. These materials are used as components to the basic materials to give the product the necessary qualities (paints, varnish, glue).

Separate groups are allocated: fuel, spare parts, which in their role are auxiliary materials, but given that they have a significant specific weight, they are allocated to a separate group.

Fuel in production is divided into energy (fuel) and technological, as well as for household needs.

Spare parts are used to repair fixed assets and, as a rule, have a strictly targeted character. They are needed to keep the equipment in working order.

These classifications are used to build synthetic and analytical accounting, as well as to compile a synthetic report on the balances, receipt and consumption of raw materials and materials in production and operational activities.

A commodity is a tangible product offered to the market for the purpose of acquisition, use or consumption. To account for purchased goods, active inventory accounts 222 "Goods purchased" and 223 "Other goods" are used, which are used mainly by trading enterprises, public catering enterprises, supply and marketing, intermediary, foreign economic organizations, as well as industrial, construction and agricultural enterprises if they, along with the production of products, carry out trading operations.

Inventories are valued at the lower of their cost and net realizable value. Net realizable value is used when cost cannot be recovered because the inventory has been damaged, or it is partially or completely obsolete, or its selling price has declined.

The cost of inventory includes: the cost of purchasing materials, transportation and procurement costs associated with their delivery to the place of storage and bringing them into proper condition. Inventory acquisition costs include the purchase price; import duties; commissions paid to supply, intermediary organizations; transportation and procurement and other expenses directly related to the acquisition of stocks. Trade discounts, rebates and other similar adjustments are deducted from the cost of the acquisition.

Raw materials, materials, purchased semi-finished products, fuel, spare parts and other inventories in the balance sheet are shown at their actual cost. According to the same assessment, values are taken into account in synthetic accounting; in analytical accounting - at fixed accounting prices.

7.2. Methods for estimating inventory in the periodic accounting system: FIFO, LIFO, weighted average cost and specific identification

Accounting Standard No. 7 recommends that businesses apply the following methods for estimating the cost of inventories:

Method of specific (solid) identification;

Weighted average cost method;

Method of inventory valuation at the first purchase price ("FIFO");

The method of valuing inventories at the price of last purchases ("LIFO").

At the same time, it must be borne in mind that an enterprise during the entire reporting year can apply only one of the above methods, which is fixed in its accounting policy.

Method of specific (solid) identification- it is used in cases where it is possible to clearly organize batch accounting of inventories. This method involves the calculation of the cost of items of inventory, which are not usually interchangeable, goods and services that are manufactured and intended for special projects or orders.

Weighted average cost method. During the reporting month, material resources, regardless of the prices at which they were purchased, are accounted for and written off for production, as a rule, at fixed accounting prices. At the end of the month, the corresponding share of deviations of the actual cost of material resources from their value at discount prices is also written off here. This method assumes that the cost of inventories is the average cost of stocks available at the beginning of the month (period) plus the cost of those received during that month (period).

Method "LIFO"- the method of estimating inventories at the prices of last purchases, is based on the premise that the cost of inventories acquired last is used to determine the cost of inventories used up in the first place, and the cost of inventories at the end of the month (period) is calculated at the cost of inventories purchased first.

Method "FIFO" - The first-purchase method of valuing inventories is based on the assumption that the actual cost of inventories purchased first should be charged to consumables. The cost of inventory at the end of the month refers to the latest deliveries, and their disposal to earlier deliveries. With this method, the rule is applied: first in, first out. This means that no matter which batch of materials is put into production, the materials are first written off at a price (the cost of the first purchased batch, then at the price of the second batch, etc. in order of priority until the total amount of materials used for the month is received .

The use of these methods for estimating inventories directs enterprises to organize analytical accounting of materials not only by their types, but also by individual batches.

The FIFO method is advisable to use for organizations planning to implement capital investments at the expense of own funds.

Thus, the FIFO method is the most profitable.

On the accounts of subsection 20 "Materials" take into account the following types of values:

202 "Purchased semi-finished products and components" - purchased semi-finished products and finished components purchased to complete manufactured products and requiring processing or assembly costs. To account 202 "Purchased semi-finished products and components" the following sub-account is opened: 14 - "Household goods and detergents".

203 "Fuel", which takes into account oil products, solid and other types of fuel. Petroleum products include all types of fuels and lubricants used for the operation of Vehicle, technological needs of production, energy generation and heating.

205 "Spare parts" - spare parts intended for the production of repairs, replacement of worn parts of machines, equipment, vehicles and other types of equipment.

206 "Other materials" - production waste, irreparable defects, valuables received from the liquidation of fixed assets, worn tires, scrap rubber.

7.3. System of continuous accounting of inventory, comparison of methods.

All operations related to the receipt, movement and release of inventories must be documented in primary documents. To account for the movement of inventories, standard interdepartmental documents have been developed, the timely issuance and correct execution of which allows organizing proper accounting and control over the safety and proper use of these stocks. The chief accountant is obliged to organize the correct workflow, the use of standard documents, develop and communicate to all performers the schedules for their preparation, verification and acceptance. In the matter of the rational organization of accounting, the development and communication to all persons associated with the storage and accounting of stocks, the nomenclature - the price tag, is of great importance. It grouped in a certain sequence all the inventories held by the enterprise. Depending on their physical properties and economic purpose, the grouping is carried out by groups, subgroups, types and sizes of inventory. The construction of accounting nomenclatures is based on the classification of inventories and their accounting on the corresponding accounts of subsections 20 "Materials" and 22 "Goods".

All operations related to the movement of inventories are drawn up with documents that are issued in the maximum number of copies. Received documents (invoices, payment requests-orders, waybills) related to the receipt of inventories are transferred to the supply department or to the accounting department for verification and acceptance (acceptance for payment). Here they are registered in the Register of Incoming Cargoes (f. No. M-1), which is designed to control the receipt and posting of stocks, as well as for operational control over the timing of payment of invoices or refusal of acceptance.

The receipt of inventories is controlled by the freight forwarder, who is guided by the supply manager and monitors the fulfillment of contractual obligations by suppliers, makes claims for quality and shortages of materials, searches for goods if they do not arrive at the enterprise in a timely manner. The forwarder also delivers materials to the warehouse.

Lecture 8-9: Accounting for long-term assets.

Inventories (TMZ) are the main (after Money) the current asset of most enterprises related to the trade and manufacturing sector. Since inventories are the main material component of the production cycle, their accounting is extremely important for all levels of accounting and its users.

Inventory includes funds (assets) of an enterprise that have the following characteristics.

1. Appointment. Funds are used to ensure the activities of the enterprise, both basic and any related (for example, office supplies). They may be intended for resale, use in the production process, or for consumption by the enterprise itself in the course of its activities.

2. Period of use. The planned useful life usually does not exceed one year.

3. Cost. For inventories, no cost limits are set.

Types of TMZ:

- goods or materials intended for resale (not subjected to processing that changes their cost to the enterprise);

- raw materials and materials used in the production cycle to create the company's products intended for sale or internal use;

- unfinished production;

– finished products;

- goods or materials directly used in the course of the operation of the enterprise and accounted for in the process of use as costs.

Specifics of inventory accounting

initial valuation. It is determined by the receipt options (purchase, contribution to the authorized capital, exchange, manufacture, donation, etc.) and corresponds to the actual cost, cost, market value, etc.

Reappraisal. If the current book value (documentary balance) of inventories does not correspond to their real value (for example, market value), the organization may re-evaluate inventories for more realistic reporting.

Depreciation. Given the short useful life of inventories (compared to fixed assets and intangible assets), depreciation is not charged on inventories, and negative changes in value (for example, cheaper goods due to their obsolescence) are accounted for using revaluation.

Implementation. When selling goods or the company's own products, their residual value is written off to the cost of sales (costs).

use in the manufacturing process. The residual value is written off to the cost of production (residual value of products) in accordance with the rules adopted by the enterprise for costing.

Use for the needs of the enterprise outside the main production process. If any inventory items are not directly the object of sale (resale) and their use (write-off) cannot be attributed to the cost of production (included in the calculation) of specific types of products, their residual value when used is written off to the costs of the period in accordance with the classification cost accounts adopted in the accounting policy of the enterprise.

Write-off. In the event that inventories are damaged, lost, or have lost any value for the enterprise and cannot be used or sold at a profit, their accounting is terminated, and the residual value is written off to the expenses of the enterprise.

In the process of production, along with the means of labor, objects of labor are involved, which act as inventories.

Unlike means of labor, objects of labor participate in the production process only once and their value is fully included in the cost of production, constituting its material basis.

TMZ are assets in the form of:

2) work in progress, works and services;

finished products and goods intended for sale in the course of the entity's activities.

According to the functional role and purpose in the production process, TMZ are divided into:

1) basic - these are materials that are materially included in the manufacture of products, forming its material basis (flour when baking bread);

To actual acquisition costs inventories include:

Amounts paid in accordance with the contract to the supplier (seller);

Costs for information and consulting services, remuneration of the intermediary organization;

Customs duties, etc., as well as non-refundable taxes;

Costs for the procurement and delivery of inventories to the place of their use, including insurance costs (including the costs of maintaining a procurement and storage apparatus, for transport services for their delivery to the place of use (when they are not included in the contract price) , the cost of paying interest on supplier loans (commercial credit), as well as paying interest on borrowed funds (if they are associated with the acquisition of reserves and accrued before they are accepted for accounting), etc. costs;