A certificate that will simplify the write-off of uncollectible accounts receivable

Why do you need an act of writing off accounts receivable?

Accounts receivable can be written off:

• as a result of forgiveness of debt to the counterparty;
• upon expiration of the debt collection period;
• due to the liquidation of the debtor company;
• due to the impossibility of collecting the debt from the counterparty.

The law does not regulate how debt can be written off in these cases. But since this write-off constitutes expenses of the organization that reduce the tax base (under the appropriate taxation system), the fact of its implementation must be accompanied by the preparation of reliable supporting documents.

Such a document may be an act of writing off accounts receivable. This is a fairly simple element of official documentation in structure, which is drawn up by a commission (usually it includes the chief accountant and his assistants) and signed by the director based on the previous inventory of the debts of the counterparties.

As a rule, the act is applicable in cases where accounts receivable are written off according to scenarios in which it is unlikely that any claims from tax authorities will arise. For example, when the debt collection period expires.

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The situation is more complicated if the decision to write off was made due to the impossibility of collecting the debt. In this case, the range of supporting documents can be much wider and include various sources from the Bailiff Service, intercorporate agreements, and court decisions.

The most problematic situation is when the company forgives the debt itself. In this case, it is necessary to justify in detail why such generosity takes place, which the Federal Tax Service can easily consider a sign of illegal cashing out of profits.

Thus, in the last two cases, the act will not be enough. But if the reason for writing off a debt is missing the statute of limitations on it (which is by default considered as an omission by the company, essentially undesirable for it), then the act is quite applicable.

The role of the document in accounting

In practice, one of the most common accounting statements for the court is about debt. Debtor and/or creditor. She simultaneously performs:

• supporting document (duplicates the necessary information from accounting and tax accounting);
• We prove to the court and the parties to the conflict the existence of specific facts.

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Any business operation in the life of an institution must be reflected in accounting, and this topic is far from new for accountants. Each fact of activity must be documented. Making entries without supporting primary documentation is unacceptable.

For most operations of the financial and economic activities of an enterprise, special unified forms of primary documentation are provided. The use of unified forms is not necessary, and forms can be developed independently or existing ones can be modified. However, many organizations prefer to use unified forms of primary and accounting registers.

But not all events in the economic life of an economic entity can be reflected on special forms. For certain types of transactions there are neither forms nor accounting standards. But this does not mean that such facts can be hidden, that is, not reflected in accounting. It is for such operations that special forms of primary documentation are provided - accounting certificates.

An accounting certificate can reflect absolutely any operation: from the calculation of wages or vacation pay to the formation of the cost of the finished product or the cost of paying taxes to the budget. This primary documentation form is universal and allows you to disclose the mandatory details for registering facts in accounting.

To make similar entries in accounting, use the unified certificate form OKUD 0504833 or develop a form yourself. Approve the form of the developed document in the accounting policy or by a separate order.

Check that the sample for writing an accounting statement must contain the required details:

• Title of the document;
• date of its preparation;
• full or abbreviated name of the organization in accordance with the statutory documentation (additionally, details identifying the entity may be reflected - TIN, KPP, address);
• the essence of the business transaction carried out;
• FULL NAME. the responsible person who compiled the document.

Regardless of the form you choose, record transactions using accounting statements in chronological order. Otherwise, disputes with tax inspectors and relevant acts cannot be avoided.

Additions to the act (letter of debt forgiveness and other documents)

Even if the basis for writing off the debt does not have significant prospects for challenge - as in the case of write-off due to the expiration of the statute of limitations - the act of writing off the debt makes sense to supplement:

1. A copy of the letter to the counterparty about writing off the debt - with a note of receipt by the debtor.

In fact, it is in the nature of a notification, since when the statute of limitations on a debt expires, the creditor has no right to count on the emergence of prospects for collecting the debt on a legal basis. This letter will also be useful to the counterparty himself - to write off accounts payable.

You can download a sample debt forgiveness letter from the link below.

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1. Debt inventory act.

It is compiled according to the unified form INV-17. It reflects information about all debts - receivables and payables. At the same time, for all debts, amounts confirmed and not confirmed by counterparties are given, and separately - those for which the statute of limitations has expired.

1. Calculation certificate from the accounting department.

The certificate will reflect in detail the data on the debt in the context of information from the accounting registers.

Now let's look at the structure of the write-off act drawn up by the commission, and get acquainted with a sample act of writing off receivables.

Decoding of accounts payable: short-term loans and borrowings in the balance sheet, line 1510, etc.

Table 5.3 provides a detailed breakdown of the company's long-term and short-term liabilities (lines 1410, 1450, 1510, 1520, 1550 of the balance sheet).

The table provides a separate decoding of short-term and long-term CP, as well as a reflection of changes in the status of CP (from long-term to short-term).

In order to correctly fill out Table 5.3, it is necessary to use data (initial balances and turnover) of analytical accounts for long-term and short-term shortfalls for settlements with counterparties, as well as for settlements for provided financial resources.

Line 5551 reflects the amount of the total long-term shortfall and its dynamics for the reporting period (for short-term shortfall, line 5560 is used).

The columns “At the beginning of the year” are filled in based on the credit balances of the corresponding analytical accounts (60, 62, 69, etc.).

Columns “Changes for the period. Receipts" are filled in with the corresponding credit turnovers of the short-term accounting accounts. At the same time, turnover associated with interest on a commercial loan, fines and penalties for violation of contracts are reflected in the column “Interest due, fines and other charges”.

Columns “Changes for the period. Retired”, on the contrary, are filled out based on data on debit turnover on the corresponding accounts.

NOTE! The transfer of a short-term loan from long-term to short-term is reflected in the same way as described above for debt. And it can be recorded in the table either in parentheses or without them.

Line 5571 contains similar indicators for the previous year. Therefore, as a rule, it is filled out on the basis of Table 5.3 for the previous period (for short-term short term - period 5580).

Lines 5552, 5553, ...; 5572, 5573... contain a breakdown of long-term shortfalls by type for the current and previous periods (for short-term shortcomings lines 5561, 5562, ...; 5581, 5582, ...).

Line 5550 indicates the total shortfall at the end of the reporting period.

IMPORTANT! The value of line 5550 must be equivalent to the sum of the values ​​of lines 5551 and 5560.

Line 5570 reflects the total shortfall for the previous period.

Table 5.4 is used by organizations to reflect the volume of overdue credit for the current and two previous reporting periods. The decoding is also given in the context of each type of short circuit.

Drawing up a decoding of the DZ and KZ is a task that every organization faces the need to perform. The transcript must be correctly compiled not only as part of the explanations to the tax authority, but also separately for the business owner or potential investor. In addition, it can significantly facilitate the task of effectively planning a business for an organization’s management. When filling out its existing form, it is necessary to take into account a number of general rules and control correspondence between certain columns.

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Rules for issuing a certificate

Among the basic design rules are:

• 
  indication of information about the amount of obligations, the name of the creditor and debtor and the period of occurrence of the debt

• filling in information based on inventory results
• use of a single template if the organization has approved a specific template
• paying attention to the purpose of the paper

For internal use, a document may be drawn up that additionally includes information about accounts payable. Such paper will allow you to obtain more data about the financial condition of the company, its assets and debts.

What might an order look like for a hopelessly overdue debt?

The order usually reflects:

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1. General details:

• Title of the document;
• number, date and place of document preparation.

1. Details of the organization writing off the debt.
2. Wording reflecting the purpose of the order:

• on writing off the debt in relation to the counterparty (indicating its name and Taxpayer Identification Number, the date the debt arose and a reference to the agreement under which the debt arose);
• about the reasons for such write-off (“due to the expiration of the statute of limitations”).

1. Wording reflecting the direction of the order:

• with an order to write off the debt (addressed to the chief accountant);
• determining the circle of persons responsible for executing the order;
• indicating the start date of the order.

1. Information about the amount of debt as of a certain date.

Copies can be used as attachments to the document:

• inventory act;
• calculation certificates;
• decisions of the Bailiff Service;
• court decision on the basis of which enforcement proceedings were carried out.

The employees named in it must familiarize themselves with the order.

You can download a sample order for writing off bad receivables from the link below:

An act must also be drawn up for the transaction of writing off accounts receivable. Read more about it.

***

The write-off of accounts receivable must be accompanied by the use of supporting documents. If there is a possibility that the Federal Tax Service may have questions about the procedure for such a write-off, as in the case of recognizing a debt as bad, then the optimal supporting document is an order from the head of the company.

How to get

The certificate is usually compiled by a senior economist or financial director of the company. An organization can use third-party help from specialists when creating reports and drawing up certificates of remote sensing.

Within the company, the paper is filled out when reporting or at the request of management. Controlling and supervisory authorities do not have the right to require the provision of a certificate of PD. If desired, the organization provides paper on a voluntary basis.

Functions of help about remote sensing

The certificate for internal use is used for reporting. With its help, the current situation of the organization is monitored and assessed. Paper intended for external use is attached to the statement of claim and is used in legal proceedings.

The paper can also be drawn up at the request of other persons and government bodies. The data can be used to evaluate existing assets. The certificate is often requested by insurers and other creditors.

When using the sample, no problems with drawing up the document arise. An experienced accountant, having access to all the data, takes very little time to compile a certificate.