residual value fixed assets - the difference between the original or replacement price of the object and its accumulated depreciation for the operational period.
The organization can receive the main material resources:
- by exchange, acquisition on a paid basis;
- on a gratuitous basis (disinterested transfer);
- during the construction of a building / structure (construction);
- from contributions to authorized capital.
According to the classifier, the main property funds include:
- buildings, various structures, premises;
- land;
- transport;
- office equipment and computing devices;
- measuring devices;
- breeding stock;
- industrial and economic equipment;
- museum funds;
- perennial trees, etc.
When is residual value used?
Residual value is required for:
- determining the degree of depreciation of the property fund, as well as its write-off (if necessary);
- calculation of tax deductions on property;
- assessing the effectiveness of the use of basic resources;
- analysis of the general state of production.
The residual value of fixed assets is used in the following procedures:
- when concluding transactions related to the purchase / sale / exchange of the company's property funds;
- in the implementation of credit operations secured by tangible assets;
- when calculating the sum insured;
- when making intangible assets in the authorized capital;
- during the bankruptcy procedure or during the restructuring of the institution;
- in resolving property disputes.
Calculation of the residual value of fixed assets
To objectively determine the amount of residual value, it is necessary to correctly calculate such an indicator as depreciation. Depreciation of fixed assets can be carried out in several ways:
- linear;
- non-linear;
- production;
- by the sum of the number of years;
- by the size of the reduced balance of the property and the period of its useful use.
Useful life - the period during which the fixed assets will be used by the enterprise for profit. Depreciation is not charged on material objects that do not change their consumer properties during the entire period of their use. These include:
- museum exhibits, collections;
- earth;
- objects of nature management.
Calculation formula:
- OS - residual price;
- VS / PS - replacement / initial cost;
- ON - accumulated depreciation.
In postings, the calculation of the residual value will be reflected as the difference between the debit balance of account 01 and the credit balance - 02.
The residual value of the main property assets can be equal to zero only if the accumulated depreciation reaches their original cost.
Initial - the actual price of fixed assets on the date of their purchase and inclusion in the accounting documents of the enterprise. In other words, these are the funds spent by the institution on the production / construction / purchase of basic material resources, with the exception of VAT and other deductions subject to reimbursement. Decrease / increase in the initial cost of fixed assets - modernization / reconstruction or liquidation of a material object, must be reflected in accounting documents.
Recovery - the cost of tangible assets (OS) after the revaluation.
Revaluation of fixed property funds is carried out to identify their real (market value). To do this, the initial price of fixed assets is recalculated taking into account market prices and current reproduction conditions. At the same time, objects are revalued at their current value once a year at the end of the reporting period (December 31).
When calculating the replacement cost of fixed resources, the following can be used:
- market prices for a similar product, which are set by manufacturers;
- the average price level published in the media;
- information on the market value of products obtained from Rosstat;
- opinion of financial analysts.
The initial cost of a group of objects as of January 1 was 160 thousand rubles, the actual operation period is 3 years.
Calculate the residual value and depreciation factor on the same date if depreciation is charged a) on a straight-line basis; b) decreasing balance method (acceleration factor 2); c) by the sum of the numbers of years of useful life. For this group of objects, the useful life of 10 years is determined.
Solution
When solving this problem, we proceed from the fact that the residual value is the initial cost minus depreciation, and the amount of accrued depreciation is the amount of depreciation for the entire period of actual use of the object. Therefore, we will start the solution by calculating the amount of depreciation for each of the depreciation methods.
a) We will calculate according to the linear method. The annual depreciation amount is determined by the formula
A - the annual amount of depreciation deductions
H and - the rate of depreciation.
The depreciation rate can be set as follows:
H a \u003d 1 / T 100
Calculate the depreciation rate for a useful life of 10 years:
H a \u003d 1/10 100 \u003d 10%.
Depreciation for the year will be
A \u003d 160 10 / 100 \u003d 16 thousand rubles.
With this method, the amount of depreciation is the same every year, so the depreciation over three years is equal to
And \u003d 16 3 \u003d 48 thousand rubles.
b) We will carry out the calculation according to the reducing balance method. To determine depreciation, we use the following formula:
С ost - the residual value of the object
k - acceleration factor
N and - depreciation rate for this object.
A1 \u003d 160 2 10 / 100 \u003d 32 thousand rubles,
for the second year
A2 \u003d (160 - 32) 2 10 / 100 \u003d 25.6 thousand rubles,
for the third year
A3 \u003d (160 - 32 - 25.6) 2 10 / 100 \u003d 20.48 thousand rubles.
Depreciation for three years is calculated as the sum of depreciation for three years:
And \u003d 32 + 25.6 + 20.48 \u003d 78.08 thousand rubles.
c) We will calculate by the method of the sum of years. To determine annual depreciation, we use the following formula:
From the first - the initial cost of the object
T rest - the number of years remaining until the end of the useful life
T is the useful life.
Depreciation for the first year will be
A1 \u003d 160 10 / (10 (10 + 1) / 2) \u003d 29.09 thousand rubles,
for the second year
A2 \u003d 160 9 / (10 (10 + 1) / 2) \u003d 26.18 thousand rubles,
for the third year
A3 \u003d 160 8 / (10 (10 + 1) / 2) \u003d 23.27 thousand rubles.
Adding the amount of depreciation for three years, we get the amount of depreciation:
And \u003d 29.09 + 26.18 + 23.27 \u003d 78.54 thousand rubles.
Knowing the amounts of depreciation calculated in various ways, you can calculate the residual value and the depreciation factor using the formula
We find the wear coefficient by the formula
Substituting the values, we get:
a) linear way:
C rest \u003d 160 - 48 \u003d 112 thousand rubles,
K out \u003d 48 / 160 100 \u003d 30%;
b) reducing balance method:
C rest \u003d 160 - 78.08 \u003d 81.92 thousand rubles,
K out \u003d 78.08 / 160 100 \u003d 48.08%;
c) the method of the sum of years:
C rest \u003d 160 - 78.54 \u003d 81.46 thousand rubles,
K out \u003d 78.54 / 160 100 \u003d 49.1%.
Thus, according to the results of solving this problem, it can be seen that non-linear methods make it possible to write off most of the cost in the first years of operation of the fixed asset.
Without knowledge of how to calculate the residual value, an accountant will not be able to correctly calculate depreciation, draw up a balance sheet, and prepare a financial justification for writing off or selling a particular asset. Residual value is a formula for determining the price of an asset that takes into account different types of depreciation. To calculate it, you will need the values of the initial cost and the amount of accumulated depreciation.
In what cases is it necessary to calculate the residual value?
Calculation of the residual value is necessary in the procedures for:
- exchange operations with property;
- implementation of a transaction for the sale of expensive assets;
- assessment of the value of the contribution made to the authorized capital, if it was made in the form of a fixed asset.
The calculation of the residual value is necessary in the process of obtaining a loan secured by property assets. Without data on the residual value is not complete in the case of restructuring the company's debts. Other grounds may be:
- the beginning of the bankruptcy of the institution;
- active phase of property dispute resolution;
- calculation of the sum insured.
At the time of depreciation, the calculation of the residual value is necessary in the method of determining depreciation by the reducing balance method. For purposes tax accounting the calculation of the residual value is necessary in the method of non-linear depreciation and in calculating the average annual value of fixed assets, the value of which is necessary to determine the tax base for property tax.
How to Calculate Residual Value
The methodology for calculating depreciation for fixed assets is disclosed in PBU 6/01, for intangible assets - PBU 14/2007. The objectivity of the residual value obtained depends on the correctly calculated depreciation indicator. The formula involves finding the difference between the original cost and the depreciation value. The amount of depreciation is taken for settlement actions on the date of determining the residual value.
On what date do you need the residual value of the OPF? The formula requires the value to be reflected at the beginning of the year. In the case of the sale of real estate, the date must coincide with the date of legal registration of the transaction. If the residual value of the equipment (the formula in the basic case is applicable to different types of depreciable assets) is at the beginning of the year, then monthly relevant calculations are required for intangible assets.
How to find residual value after revaluation
PBU 6/01 states that enterprises can once a year revaluate the value of assets in the form of fixed assets. This is necessary to balance the cost indicators between accounting and market prices. How to determine the residual value of equipment after the first and subsequent revaluations - in this case, for calculations it is required to use not the initial cost, but the replacement cost. The replacement cost involves recalculating the value of objects from among the fixed assets as of the end of the period. The formula will look like this:
- Residual value = Replacement cost - Depreciation.
How to calculate the residual value of property - reflection in postings
How to calculate the residual value based on correspondence accounts:
- When evaluating fixed assets, the formula involves finding the difference between the value of the balance of account 01 (debit) and the balance of account 02 (credit).
- When finding the residual value for an object or a group of objects from the category of intangible assets, the balance formed in the credit of account 05 is subtracted from the balance of account 04 (debit value).
If the residual value is written off as a result of the sale, the entry relates the revenue to other income:
- D91 - K01 at the time of writing off the residual value;
- D02 - K01 to write off depreciation on the implemented object.
The issue of cars is objectively of interest to a large number of people. And this applies not only to new, but also used vehicles. Given the current prices for cars, people are looking for all sorts of solutions and ways out of the situation, allowing them to buy a good car for quite a bit of money on favorable terms, including loan agreements with a bank, and then sell it just as profitably.
In this case, it is worth considering such a thing as residual value. This term is widely used in the tax field, accounting, is relevant for entrepreneurs and is directly related to vehicles. Also, it would not be superfluous to find out about the residual value for ordinary motorists who want to buy profitably, and then sell the car on the secondary market with the least loss.
What it is
Car enthusiasts who take out a car loan or are considering such an option have repeatedly come across the concept of residual value. Therefore, they are quite naturally interested in what is the residual value of the car guaranteed by the bank.
In general, Residual Value (RV) can be described as a percentage of the customer's debt in relation to the total value of the vehicle. When the borrower undertakes to pay this amount on the day of the last mandatory monthly payment where the date is clearly specified in the loan agreement.
The advantage of such a loan is that the bank fixes this cost and guarantees its invariability until the end of the contract. This protects the client from a fall in the market price, since the bank guarantees that the fixed assets will remain at the level of 30-55% after the end of the loan agreement. In this situation, the client has the opportunity under OS to sell the car back to the dealer and take a new loan for another car. This form of relationship is beneficial to all parties.
Dealing with the OS is beneficial for those people who are used to changing cars quite often, they want to switch to new vehicles every 2-3 years. The bank receives a profitable and permanent customer, and car dealers can also count on the constant availability of a buyer.
It is only important to understand that such a program is quite new for our country, and the conditions apply only to a limited number of brands and models. Gradually, the program, which is called Buy-Back, is being introduced and distributed.
But the concept of residual value is applied not only in matters of car loans. OS is directly related to taxation, is an integral part of the work of an accountant in enterprises that have vehicles and other assets of a movable and immovable type. An accountant without knowledge of residual value calculations will not be able to correctly calculate depreciation, draw up balance sheets, and prepare financial justifications for the sale or write-off of assets.
Residual value should be characterized as a formula for determining the value of an asset that takes into account various types of depreciation. To determine this value, you need to know the initial cost of the asset and the amount of accumulated current depreciation.
When to Calculate Residual Value
OS is calculated when necessary:
- make exchange transactions with property;
- realize deals on expensive assets;
- evaluate the value of the contribution made to the authorized capital, if it was made in the form of a fixed asset;
- obtain a loan secured by a property asset;
- restructure the company's debts;
- apply for bankruptcy;
- resolve property disputes;
- calculate the sum insured.
In questions entrepreneurial activity the concept of OS is much more complicated than for a simple car owner who only wants to profitably buy or sell a used car. There is no need to apply complex formulas for calculation.
For a simple motorist, the residual value must be calculated when he decides to sell his car. This concept will make it possible to calculate the approximate price for which he can actually offer a car to buyers. But all this is conditional and is not calculated according to special formulas. It is much easier in this case to study the situation on the market, estimate the estimated cost of a car similar to the one being sold, and put the same price tag on your own.
Accurately according to all the rules and requirements, it is required to calculate OS for entrepreneurs and enterprises with fixed assets, among which vehicles are often present.
The nuances of the calculation
Many are naturally interested in how to calculate the required residual and which calculator to use.
There are several options for how to calculate and perform all the necessary calculations, which ultimately allow you to determine its residual value for a car. Someone does it on their own, others use tools in the form online calculators. And there are those who are forced to turn to specialists to resolve the issue.
OS can be calculated independently. In enterprises, this is the direct responsibility of the accountant. Without certain initial data, they will not determine the residual value of the car in any way, since the calculation formula takes into account some parameters. In many ways, the determining factor is the depreciation of a car or other asset.
If you are interested in how to correctly determine its residual value for a car, then here you will need to find the difference between the initial cost and depreciation rates. First, you will find out the amount of depreciation. They are taken as of the date the residual value was determined. Then find out what was the initial price of the asset in the form of a car. That is, how much did you buy it for.
The easiest way to understand this issue is with a specific example. Suppose that in May 2015 a car was purchased at a price of 1,500,000 rubles. And the vehicle was in operation for 6 years, that is, 72 months.
First, let's define what depreciation is here. Here you need to divide the cost of vehicles by the number of months during which the car was operated. From here we get 20.8 thousand rubles as a monthly depreciation.
Since the fixed assets are calculated on the first day of each month, then you need to determine the amount of depreciation on a specific date. For example, on 10/01/2018. 40 months have passed from the date of purchase to the date of settlement. We multiply the resulting monthly depreciation by the number of months, that is, 40. It turns out approximately 832 thousand rubles.
As a result, the residual value looks like the difference between the purchase amount of the car and its depreciation. This allows you to get a result of 668 thousand rubles. You can sell the car for about that price.
Of course, prices can be raised or lowered. But when the difference is more than 20% compared to the average market for similar models of vehicles, questions may arise from the tax authorities. This is especially true in situations where the cost is really underestimated. This immediately raises certain suspicions in terms of possible financial fraud.
Determination of residual value after revaluation
According to the current rules, enterprises are allowed to revaluate their assets in the form of fixed assets once a year. This allows you to balance the cost indicators between current market prices and accounting.
This raises a natural question regarding the determination of the residual value after the first and all subsequent possible revaluations.
A distinctive feature of this procedure is the fact that the basis for the calculation is no longer the initial cost, but the so-called restored cost. The replacement cost is the value of the object, the value of which was recalculated as of the end of the period.
As a result, to determine the OS, depreciation must be subtracted from the restored cost. This will allow you to understand what the OS will be like after the reassessment.
Features of selling at a price below OS
Since you already know that fixed assets are the initial cost of an object minus depreciation, you can take a closer look at the issue of selling.
In accounting, these objects are displayed according to their book value, as a result of which the fixed asset asset is a concept that is identical to the book value.
According to the current legislation, the sale of a car or other fixed asset below its residual value is not prohibited. This contributes to a reduced tax if the car is sold at a lower price. Wanting to reduce tax deductions, some consciously take such a step. It is important to consider the possible consequences here.
Hence it turns out that the question is not whether it is possible to sell the car below the residual value. Rather, the question here is how profitable it is to sell a vehicle in this way at prices that differ from the average market prices when selling similar cars. It is important to understand here that the organization implements the object to the detriment of itself. As a result, the seller recognizes the loss from the sale, since the fixed assets with all associated costs turned out to be higher than the proceeds from the sale.
The sale of fixed assets is a normal sales process, and therefore the standard VAT of 18% will be charged here. Revenue received is recognized on the date the buyer takes ownership. Income tax calculation provides for the accounting of all additional expenses that accompanied the sale of the object. These are storage, delivery and other costs.
About the OS for ordinary motorists
Not everyone is interested in tax and accounting issues. Ordinary car owners also face the phenomenon of residual value, although they do not always understand and realize this.
Here it should be understood that the main item of expenditure for a car is the loss of value as it ages. If earlier the machines were created based on a very long service life and were considered almost eternal, now the situation is completely different. Great attention is paid to the issue of residual value.
According to the conclusions of experts, in the first 3 years, the loss in the value of a car from its initial price can be 15-40%. Roughly speaking, if you bought a car for 600 thousand rubles, then every year it will lose 30-80 thousand rubles. This is about the same amount that a car owner has to spend on fuel with an average mileage of 10-30 thousand kilometers.
The manufacturers themselves and the pricing policy they use have a great influence on the cost. If a company introduces an objectively overvalued car to the market, this will inevitably lead to a quick drop in its value. If the car company wants to take a large share of the market, then it releases an abnormally affordable model. If you buy such a car, other things being equal, it is the owner of this car who will suffer the least losses.
Also important is the mass character of the car. Traditionally, a small demand in the secondary market is observed for those vehicles that are little known to consumers. A person simply does not want to take risks and is afraid of buying such a vehicle. He explains this by the fact that in the event of a breakdown it will be difficult to find spare parts, there are few repair specialists, non-standard components, etc.
One of the key components in the formation of residual value in the secondary market is reputation. A reputation is formed on the basis of subjective assessments of reliability. Let's take Toyota cars as an example. The Japanese auto giant has managed to gain immense popularity and build a reputation as a very reliable automaker. This allows the secondary market to sell cars of this brand at a fairly high price.
Buying rare and very expensive cars, you won’t be able to get great benefits with their help on a subsequent sale. Such machines quickly lose value, which is why their residual value differs significantly from the initial one.
Therefore, it is much more profitable to take those cars that are in high demand, have a stable positive reputation in the market. After all, the higher the demand, the higher the cost.
A person should think about the issue of obtaining the maximum possible profit when buying vehicle, and not just about a bargain. Few people now buy cars once and for all life. The resource of current machines does not allow this. Given all the nuances discussed above, it is very important to understand the essence of the residual value and know how it is formed and how quickly it decreases, depending on various factors.
Although, to a greater extent, the concept of residual value is of interest to entrepreneurs and is used in accounting, every car owner is indirectly connected with him, regardless of his status. Everyone wants to profitably sell a previously purchased car. And here the key factor is depreciation, that is, costs, and the final residual value, minus all losses.
Capital means part of the property, which is used by the organization for a long period (over 1 year) in the process of manufacturing any product, performing work or providing various services.
Definition
The definition of "residual cost of fixed assets" means OS cost, which can be calculated by determining the difference between the initial cost of an object and its immediate cost at the time of operation.
Carry out revaluation of fixed assets a must, since the cost of assets must fully correspond to market values.
The balance sheet provides for a special line, “Revaluation of non-current assets”, in which indicators of the revaluation being carried out should be entered.
Is it necessary to reassess
This rule is clearly stated in paragraph 3 of Art. 268 tax code RF. Based on this, in the period when there was a fact of the sale of an incompletely depreciated fixed asset, organizations will be forced to recognize a smaller amount for tax purposes than directly in accounting itself.
If this is ignored, then this fact will be considered as a gross violation: tax bills will be inflated which would result in lower taxable income.
Example
Let's consider a specific situation. In September 2014, the organization sold the equipment they were not using.
Values the following:
- initial price - 540,000 rubles:
- useful life - 6 years;
- depreciation period - 2 years;
- residual cost at the time of sale - 360,000 rubles;
- equipment was sold for a total of 295,000 rubles, including VAT - 45,000 rubles.
Based on this, the loss from the sale is:
295000 - 45000 - 360000 = 110000 rubles.
It should be noted that not only in accounting, but also in tax accounting, by mistake, the loss was recognized in full for the period of implementation. In other words, in September 2014.
Because of this, the authorized person did not display the transaction for the sale of equipment with the fact of loss in the relevant Appendix No. 3 to sheet 02 of the income tax declaration directly for 9 calendar months of 2014.
But in fact, in tax accounting, this loss is allowed to be included in the list of financial costs from the beginning of October 2014 for 2 years ( (6 years - 2 years) * 12 calendar months).
talking in simple words, monthly you need to produce in the direction of reducing taxable income over the specified period of 2,291 rubles (110,000: 48 months).
Based on this, due to an error, the amount of tax costs for the month of October turned out to be significantly overstated - by 110,000 rubles.
Suppose that the error was detected at the end of November 2014, at the moment when the income tax return for 9 calendar months had already been generated. Due to the fact that in the declaration the amount of financial costs was significantly overstated (by 110,000 rubles), the income tax for 9 calendar months turned out to be understated by 22,000 rubles (110,000 * 20%).
In addition, if an organization uses RAS 18/02, in without fail You need to make clarifications in accounting, namely:
Debit 09 Credit 68 subaccount "Implementation of income tax settlements" - 22,000 rubles - the deferred existing tax asset is displayed.
Debit 68 subaccount "Implementation of income tax settlements" Credit 09 - 916 rubles - the fact of payment of a part of the deferred tax asset for October-November 2014 (for several months) is displayed.
The RAS calculation training course is presented below.