In the course of its activities, the organization is faced with the need to carry out certain activities that help to obtain certain benefits when concluding business contracts and communicating with counterparties. Such expenses are usually referred to as company entertainment expenses. Since they are not clearly defined in regulations, accountants face a number of problems in their accounting.
Instructions
Step 1
Refer to legislation. Almost the only mention of entertainment expenses is found only in the Letter of the Ministry of Finance of the Russian Federation No. 94 dated 06.10.1992. It says that these costs relate to the costs of the commercial activities of the enterprise and are associated with the reception and service of representatives of other institutions and organizations that came to negotiate with the aim of maintaining or establishing mutually beneficial cooperation. Hospitality expenses include: the cost of transportation, attendance at cultural events, buffet services, as well as payment for the services of translators.
Step 2
Include entertainment expenses in your accounting records as expenses for the normal activities of the business. They must be recognized in the reporting period when they were committed, regardless of the date of actual payment. Reflect your entertainment expenses in full.
Step 3
Reflect the hospitality expenses by opening a loan on account 26 "General expenses" or account 44 "Expenses for sale". A debit must be opened on account 60 "Settlements with contractors and suppliers", account 71 "Settlements with accountable persons" or account 76 "Settlements by different creditors and debtors".
Step 4
If the entertainment expenses are related to capital construction, reconstruction, modernization or acquisition of fixed assets and intangible assets, then reflect them on the debit of account 08 "Investments in non-current assets", and then include them in the initial cost of intangible assets or fixed assets. If these expenses relate to the sale of intangible assets, fixed assets or securities, then they must be written off to the debit of account 91.2 "Other expenses".
Step 5
Add hospitality to tax returns. To reduce the amount of income, only those costs that are associated with sales and production and are listed in clause 2 of article 264 of the Tax Code of the Russian Federation can be used. In this case, all entertainment expenses must have documentary evidence.
