In the process of financial and economic activities, enterprises bear costs - tangible and intangible resources expressed in monetary form, used for a certain period for the implementation of statutory goals and objectives. In practice, costs are often equated to costs, but there are significant differences between them that affect the order of their reflection in accounting and write-off.
Unlike expenses, costs do not affect profits and do not reduce the size of the company's equity capital. The material, labor, financial and other costs incurred form current and non-current assets, and in the event of their inappropriate use and the absence of economic benefits for the company, they form costs. Since costs accumulate over a certain period, at the end of it, it is concluded that they are attributed either to an increase in the value of assets or to expenses that reduce the financial result of the organization's activities. The costs of forming current assets are called non-capital and are written off to main production with the subsequent creation of an asset. The amount of non-capital costs is the cost of goods, works, services. For example, in the production of goods, labor and material resources were expended, fixed assets and intangible assets were used. The write-off of costs will look as follows: Dt 20 "Main production" - Kt 70 "Payments with personnel"; Dt 20 "Main production" - Kt 10 "Materials"; Dt 20 "Main production" - Kt 02 "Depreciation of the main funds "; Дт 20" Main production "- Кт 05" Depreciation of intangible assets "; Дт 43" Finished goods "- Кт 20" Main production ". Non-current assets are formed at the expense of capital costs reflected in the accounts of investments in non-current assets, and then written off to the asset account (fixed assets, intangible assets, equipment for installation, etc.). For example, the construction of a real estate object with the expenditure of the same set of resources as in the previous example is reflected in accounting by the following entries: Dt 08 "Investments in non-current assets" - CT 70 "Payments with personnel"; Dt 08 "Investments in non-current assets "- Kt 10" Materials "; Dt 08" Investments in non-current assets "- Kt 02" Depreciation of fixed assets "; Dt 08" Investments in non-current assets "- Kt 05" Depreciation of intangible assets "; Dt 01" Fixed assets " - Кт 08 "Investments in non-current assets". Costs that did not generate assets are recognized as expenses. In this case, non-capital, depending on their type, can be written off to the debit of account 90 "Sales" at the cost price or to account 91 "Other expenses". Capital costs reflected in account 08 "Investments in non-current assets" and did not bring the expected result, refer to non-operating expenses and are accounted for in the debit of account 91. reducing the profit of the enterprise.
