ACCOUNTING AND TAX ACCOUNTING OF TRANSACTIONS UNDER CESSION AGREEMENTS

ACCOUNTING AND TAX ACCOUNTING OF TRANSACTIONS UNDER CESSION AGREEMENTS

 

Waiting for a client to pay you is an unaffordable luxury, especially in a situation when a business needs funds and we are talking about large amounts. It is naive to hope for good faith, but calling and reminding is not always effective, besides, the seller's business reputation may suffer. There is one correct solution to optimize settlements - the assignment of the claim or, in other words, the assignment. The service is not free, but it is also effective - the client's debt has been repaid, while the business relationship with him has not been spoiled. Let us consider how transactions under cession agreements are reflected in accounting and tax accounting.

INCOME TAX

AT THE ASSIGNOR

If the seller of goods (works, services) keeps records of income and expenses on an accrual basis and at the same time assigns the right to claim a debt to a third party before the due date of payment stipulated by the agreement on the sale of goods (works, services), then such seller has the right to recognize a negative difference between income from the sale of debt and the cost of the debt itself as a loss (clause 1 of article 279 of the Tax Code of the Russian Federation).

The amount of loss recognized for income tax purposes are limited. The maximum is the amount of interest that the payer would pay based on the maximum interest rate or, at the option of the taxpayer, the interest rate confirmed in accordance with the methods established by Section 5 of the Tax Code of the uk Federation for a debt obligation equal to the income from the assignment of the right of claim from the date of the assignment before the payment date.

If the buyer's debt is assigned to a third party after the due date for payment under the contract for the sale of goods (work, services), then the negative difference between the income from the sale of the debt and the cost of the debt itself is recognized as a loss on the date of assignment of the right of claim.

Thus, if the payment deadline under the contract for the sale of goods (works, services) has come, then the seller reflects the loss from the assignment of debt in non-operating expenses in full; the term has not come - in an amount not exceeding the maximum value. Income from the assignment of debt is subject to income tax, expense is recognized for tax purposes.

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ACCOUNTING AND TAX ACCOUNTING OF TRANSACTIONS UNDER CESSION AGREEMENTS

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