Investments in material assets. Profitable investments in material assets
We described in our article which material objects and under what conditions are considered fixed assets. One of the mandatory conditions for classifying property as fixed assets is that the object is intended for use in the production of products (when performing work, providing services), for the management needs of the organization, or for providing it for a fee for temporary possession or use (clause 4 of PBU 6 /01).
In the case where an item of fixed assets is intended solely for provision for a fee for temporary possession or use for the purpose of generating income, it is taken into account as part of profitable investments in material assets. The chart of accounts and the Instructions for its use for accounting for this type of investment provide for active account 03 “Profitable investments in tangible assets” (). Examples of profitable investments could be a purchased building or premises intended for rental.
Accounting on account 03
Accounting for profitable investments in material assets is carried out similarly to accounting for fixed assets, with the only difference being that instead of account 01 “Fixed Assets,” account 03 is used.
Like account 01, account 03 is active. Accordingly, the debit reflects the receipt of assets, and the credit reflects their disposal.
Thus, when taking into account profitable investments in tangible assets, their initial value, formed on account 08 “Investments in non-current assets”, is debited to account 03 (Order of the Ministry of Finance dated October 31, 2000 No. 94n):
Debit account 03 – Credit account 08
Depreciation on income-generating investments is calculated as follows:
Debit of accounts 20 “Main production”, 44 “Sales expenses”, etc. – Credit of account 02 “Depreciation of fixed assets”
When disposing of profitable investments, a subaccount 03/B (disposal) can be opened to account 03.
In this case, the carrying amount of the disposal asset is written off as follows:
Debit account 03/B – Credit account 03
Then the depreciation accumulated at the time of disposal of the income-generating investment object is written off:
Debit account 02 - Credit account 03/B
The residual value of an asset disposed of upon sale is written off as follows:
Debit account 91 “Other income and expenses” - Credit account 03/B
Of course, disposal of an asset can occur not only during sale, but also, for example, during gratuitous transfer, as a result of shortage or damage, during transfer to the authorized capital of another organization, etc. In general, accounting for the disposal of profitable investments in tangible assets is similar to similar transactions with fixed assets. We talked about typical records in our
The profitable type of investment of an enterprise belongs to the group of fixed assets. The peculiarity of this type of assets is in their purpose - they are acquired not for participation in the production process, but for transfer to third parties for paid use on a temporary basis (clause 5 of PBU 6/01).
Profitable investments in material assets: the order of reflection in accounting
Accounting for income-generating investments is organized on accounting account 03. Assets are capitalized at their original cost. The rules for determining the initial cost for such objects are similar to the algorithm for actions with other types of fixed assets. The amount at which profitable investments will be shown in accounting includes:
- costs associated with the purchase of valuables minus VAT;
- payment for services provided by third parties at the stage of preparation for the acquisition of assets (for example, consulting support for a transaction);
- the amount of remuneration paid to intermediaries;
- transportation costs for the delivery of valuables;
- repayment of customs duties, mandatory duties.
If profitable investments in material assets increase, then the enterprise has an additional depreciable object. Accrual of depreciation charges on such assets is carried out according to the general rules for fixed assets. Depreciation amounts are shown on account 02. Analytics should be carried out in the context of material assets and by tenant counterparties, for which analytical sub-accounts are opened for the synthetic account.
All investments in tangible assets received by the enterprise with the condition of their subsequent rental are reflected in debit turnover in account 03:
- D 03 – K 08.
When profitable investments in material assets are disposed of, account 03 is supplemented with a new subaccount “Disposal of material assets.” Postings:
- D 03/Disposal – K 03 - in the amount of the original cost;
- D 02 – K 03/Disposal – in the amount of accumulated depreciation.
The completion of the transaction and the write-off of the object from the balance sheet is evidenced by the entry:
- D 03/Disposal – K 91.
The reason for disposal may be sale, damage to valuables, transfer to third parties free of charge, or use of acquired objects as a contribution to the authorized capital of other companies.
Profitable investments in material assets in the balance sheet are shown in the asset in section 1 on line 1160. The amount to be reflected in the balance sheet form must correspond to the residual value of the objects. It is calculated as the difference between the balance of account 03 and the final balance of account 02. If a revaluation has been made of material assets included in this group, it must be taken into account in the amount shown in the balance sheet.
Profitable investments in material assets - an example
In January 2018, Fint LLC acquired ownership of commercial real estate for the purpose of renting it out for long-term lease to third parties. The transaction amount was 2.3 million rubles (including VAT 350,847.46 rubles). When selecting a building and checking its legal purity, the company used the paid services of an intermediary - they cost the company 115,000 rubles (including VAT 17,542.37 rubles). Fees in the amount of 8,000 rubles were paid for registration of the transaction. In February, the asset was put into operation and transferred to the tenant for use.
The accounting entries for the purchased commercial property will be as follows:
- D08 – K60 in the amount of 1,949,152.54 rubles – the cost of the asset is reflected excluding VAT.
- D19 - K60 for 350,847.46 rubles - the amount of VAT is taken into account.
- D08 – K60 for 97,457.63 rubles – the cost in terms of costs incurred for the services of an intermediary.
- D19 – K60 – VAT on intermediary services in the amount of 17,542.37 rubles.
- D08 – K68 – 8000 rubles – registration fees have been calculated.
- D03 - K08 in the amount of 2,054,610.17 rubles (1,949,152.54 + 97,457.63 + 8000) - the initial cost of the asset for lease was formed.
- D03/Rent/IP Kukin – K03 the cost of the object 2,054,610.47 rubles is allocated in the analytics to assets leased to IP Kukin.
- Starting in March, the company must begin calculating depreciation on a new property in tax accounting. In accounting, this operation will be reflected by correspondence between D91.2 and K02.
TO profitable investments in material assets refer to those intended exclusively for provision by an organization for a fee for temporary possession and use or for temporary use for the purpose of generating income (clause 5 of PBU 6/01), i.e. fixed assets provided for rent, rental (Chapter 34 of the Civil Code of the Russian Federation).
Reflection of profitable investments in material assets in accounting and financial statements
Profitable investments in tangible assets are accounted for in the account of the same name (Instructions for using the Chart of Accounts) at the original cost, formed according to the general rules applied when accounting for fixed assets (clause 8 of PBU 6/01). Analytical accounting for account 03 “Profitable investments in material assets” is carried out by type of material assets, tenants and individual objects of material assets.
Depreciation of income-generating investments in tangible assets is accrued in the general manner established for fixed assets (section III of PBU 6/01) and is reflected in a separate subaccount of account 02 “Depreciation of fixed assets” (Instructions for using the Chart of Accounts).
Special accounting rules are established for profitable investments in material assets that are the subject of a leasing agreement (Letter of the Ministry of Finance of Russia dated 04/13/2015 N 07-01-06/20755; Instructions on the reflection in accounting of transactions under a leasing agreement, approved by Order of the Ministry of Finance of the Russian Federation dated 17.02 .1997 N 15).
Income-generating investments in tangible assets are reflected in the balance sheet at their residual (book) value as part of non-current assets in line 1160 “Income-generating investments in tangible assets”. Information on profitable investments in material assets is also subject to disclosure in the explanations to the balance sheet and the financial results statement (clause 32 of PBU 6/01; table 2 of Appendix No. 3 to Order of the Ministry of Finance of Russia dated July 2, 2010 N 66n).
Write-off of profitable investments in material assets
Profitable investments in material assets are written off from the balance sheet in cases common to all fixed assets, i.e. when such property is removed from the ownership of the company or the property loses its ability to bring economic benefits (income) to the organization in the future (clause 29 of PBU 6/01).
Income and expenses from writing off profitable investments in tangible assets from accounting are subject to credit to the profit and loss account as other income and expenses (clause 31 of PBU 6/01).
To account for the disposal of profitable investments in material assets, a sub-account “Disposal of material assets” can be opened for the account. The cost of the disposed object is transferred to the debit of this subaccount, and the amount of accumulated depreciation is transferred to the credit. Upon completion of the disposal procedure, the object is debited from the account to account 91 “Other income and expenses” (Instructions for using the Chart of Accounts).
The specific method of accounting for the disposal of income-generating investments in tangible assets (using the subaccount “Disposal of tangible assets” to the account or without using such a subaccount) is established in the accounting policy of the organization for accounting purposes (clause 7 of PBU 1/2008).
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Profitable investments in material assets: details for an accountant
- The procedure for filling out the balance sheet in a general form. Example
And write down the named expenses. Profitable investments in material assets. Data on profitable investments in material assets corresponds to line indicator 1160 ... construction in progress). Line 1160 “Profitable investments in material assets” = Dt 03 - Kt 02 ...
- On accounting for apartments for the organization's employees
Accounting by debit of account 03 “Income-generating investments in material assets.” Depreciation for an apartment in the accounting... income generation account is intended for account 03 “Income-generating investments in material assets.” Intended for the provision of rental... fund, which are taken into account as part of profitable investments in material assets, depreciation is calculated in accordance with the generally established procedure...
- The procedure for filling out the balance sheet in a simplified form. Example
Research and development, exploration assets, income-generating investments in tangible assets, deferred tax assets and more...
- Transferring cases to the chief accountant: step-by-step instructions
Describes the procedure for accounting for financial investments, profitable investments in material assets, loans and credits, settlements...
- Is it possible to transfer fixed assets with a residual value of less than 40 thousand rubles? as part of the MPZ?
... ;Fixed assets", 03 "Income-generating investments in material assets", 08 "Investments in...
- Depreciation of leased property listed on the lessor's balance sheet
And the financial statements as part of profitable investments in material assets on account 03, subaccount “Property...). Accounting. The organization has opened subaccounts for account 03 “Income-bearing investments in tangible assets”: 03-1 ... The leased asset is reflected in the income-generating investments in tangible assets 03-1 08 1 008 ...
- Statistical forms for fixed assets: what has changed?
Accounting for fixed assets and profitable investments in material assets. Unfinished assets and objects related...
- About the moment of presentation for deduction of VAT on the cost of fixed assets
To account 01 or 03 “Profitable investments in material assets.” However, this position was based solely...
Account 03 is used to record and analyze information about property acquired by an enterprise to generate additional income. In the article you will learn about the categories of such property and the types of income received from it, as well as the features of accounting for transactions on account 03.
Income investments: concept and types
Income investments are understood as funds capitalized in the form of acquired material assets in order to obtain additional benefits from their use.
The main types of profitable investments are buildings, premises, production and other equipment, vehicles and other fixed assets.
To receive income from investments, organizations, as a rule, transfer valuables for temporary use and ownership to other enterprises and organizations for a fee. The basis for the transfer of property is an agreement (rent, leasing, etc.), as well as an acceptance certificate confirming the fact of receipt of valuables by the tenant.
Modern practice shows that property that acts as income-generating investments is most often cars (car rental services) and premises (residential and industrial).
Account 03: postings
Account 03 is used by enterprises purchasing property in order to receive additional income from it. Purchased equipment, buildings, fixed assets, land plots are accounted for according to Dt 03 (written off from Kt 08). When disposal of property as a result of sale and liquidation, the transaction amount is reflected by posting according to Kt 03. This operation writes off the book value of material assets, the amount of accumulated depreciation, and also reflects expenses in the form of the amount of the residual value of the property recorded on the balance sheet.
The table below shows the main accounting entries: | Debit | Credit | Operation description |
03 | 08 | A document base | Equipment purchased for leasing has been accepted for accounting |
03 | 80 | Transfer and Acceptance Certificate | The value of profitable investments accepted as a contribution to the authorized capital is reflected |
94 | 03 | Minutes of the board's decision | A shortage (damage) of a car used for rental has been recognized |
03 | 76 | Write-off act | Equipment purchased for leasing has been accepted for accounting |
03 | 83 | The tenant returned the premises previously leased. The premises are registered with the landlord | The amount of revaluation of profitable investments is reflected |
99 | 03 | Revaluation statement | A shortage (damage) of a car used for rental has been recognized |
91.2 | 03 | The cost of profitable investments is included in extraordinary expenses | Equipment purchased for leasing has been accepted for accounting |
Account 03. Accounting of transactions using examples
For a detailed examination of the features of accounting for transactions on account 03, we use examples of typical situations.
Account 03. Renting out your own equipment
Example No. 1.
Let’s say that JSC “Kolosok” purchased from LLC “Selkhoztekhnik” a machine and tractor unit for pre-sowing tillage at a price of 484,620 rubles, VAT 73,925 rubles. On March 25, 2016, Kolosok entered into a leasing agreement with Fermer LLC, according to which the tractor was leased. The useful life of the machine-tractor unit is set at 7 years.
The Koloska accountant reflected the transactions of purchasing a tractor and leasing it as follows:
The table below shows the main accounting entries: | Debit | Credit | Sum | Operation description |
08 | 60 | The amount of expenses for a tractor purchased from Selkhoztekhnik LLC for subsequent leasing is taken into account (RUB 484,620 – RUB 73,925) | RUR 410,695 | Sales contract, delivery note |
19 | 60 | The amount of VAT on the cost of the purchased machine and tractor unit is taken into account | RUR 73,925 | Invoice |
60 | 51 | Payment was made to “Agricultural Equipment” for the purchased tractor | RUR 484,620 | Payment order |
03 Property owned | 08 | A tractor purchased from Selkhoztekhnik LLC was registered for subsequent leasing | RUR 410,695 | Equipment purchased for leasing has been accepted for accounting |
68 VAT | 19 | The amount of VAT on the purchased tractor is accepted for deduction | RUR 73,925 | Invoice |
03 Property under lease | 03 Property owned | The tractor was transferred to “Farmer” under a lease agreement | RUR 410,695 | Equipment purchased for leasing has been accepted for accounting |
20 | 02 | The amount of depreciation accrued on the machine and tractor unit for April 2016 is reflected (RUB 410,695 / 7 years / 12 months) | RUB 4,889 | Depreciation statement |
Example No. 2.
Let's consider a situation where, when purchasing property for leasing, an organization incurred additional expenses paid through an accountable person.
The activities of JSC “Kladovshchik” are related to the leasing of warehouse and other utility premises.
In February 2016 “Storekeeper”:
- purchased premises for a food warehouse from JSC Monolit at a price of 1,240,600 rubles, VAT 189,244 rubles;
- paid the expenses for registration of the premises in the amount of 2,760 rubles, the amount of which was paid through an employee of JSC “Storekeeper” Isaev V.R.;
- leased the warehouse to Products Plus LLC.
It has been established that the useful life of the warehouse premises is 11 years.
Here is how the above operations were reflected in the “Storekeeper” accounting:
The table below shows the main accounting entries: | Debit | Credit | Sum | Operation description |
08 | 60 | The amount of expenses for a food warehouse purchased from Monolit for subsequent leasing is taken into account (1,240,600 rubles - 189,244 rubles) | RUB 1,051,356 | Purchase and sale agreement, transfer and acceptance certificate, certificate of ownership |
19 | 60 | The amount of VAT on the cost of purchased warehouse premises is taken into account | RUR 189,244 | Invoice |
60 | 51 | A settlement has been made with Monolit JSC | 1,240,600 rub. | Payment order |
71 | 50 | Isaev was given an advance for household needs (calculations for the design of a warehouse) | RUB 2,760 | Account cash warrant |
08 | 71 | Savelyev received permits for the premises | RUB 2,760 | Advance report |
03 Property owned | 08 | The cost of the premises is reflected as part of income-generating investments (RUB 1,051,356 + RUB 2,760) | RUB 1,054,116 | Purchase and sale agreement, transfer and acceptance certificate, certificate of ownership, permits |
68 VAT | 19 | VAT deduction on purchased premises has been taken into account | RUR 189,244 | Invoice |
03 Property under lease | 03 Property owned | The transfer of the warehouse to the use of LLC “Products Plus” is reflected | RUB 1,054,116 | Equipment purchased for leasing has been accepted for accounting |
20 | 02 | The amount of accrued depreciation for the leased premises was carried out (RUB 1,054,116 / 11 years / 12 months) | RUR 7,986 | Depreciation statement |
Account 03. Sale of profitable investments in material assets
Example No. 1.
The activities of Sapphire JSC are related to the rental and maintenance of equipment for confectionery shops and bakeries. In November 2015, Sapphire management decided to sell the rotary oven, which was previously used for rental, to the Bulochnik bakery at a price of 523,800 rubles, VAT 79,902 rubles.
At the time of sale, the furnace was accounted for on Sapphire’s balance sheet:
- at book value RUB 503,630;
- depreciation was accrued on the rotary kiln in the amount of RUB 41,900.
“Sapphire” covered the costs of delivering the stove, paying the transport company “Meteor” the amount of 1,860 rubles. Settlements with Meteor were made through an accountable person, sales department employee K.D. Solovyov.
The Sapphire accountant took into account the disposal of equipment as follows:
The table below shows the main accounting entries: | Debit | Credit | Sum | Operation description |
76 | 91.1 | The amount of debt of “Bulochnik” for the purchase of a stove is taken into account | RUR 523,800 | Purchase and sale agreement, transfer and acceptance certificate |
91.2 | 68 VAT | The amount of accrued VAT on the equipment sold was posted | RUR 79,902 | Invoice |
03 Disposal of profitable investments | 03.1 | The write-off of the rotary kiln is reflected (book value) | RUR 503,630 | OS write-off act |
02 | 03 Disposal of profitable investments | The write-off of depreciation accrued on the rotary kiln being sold is reflected. | RUR 341,900 | OS write-off act |
91.2 | 03 Disposal of profitable investments | Expenses in connection with the write-off of the residual value of the furnace are taken into account (RUB 503,630 – RUB 341,900) | RUR 161,730 | OS write-off act |
91.2 | 71 | The costs of transporting the furnace, paid to the Meteor company through Solovyov, are reflected | 1,860 rub. | Advance report |
51 | 76 | Payment received from “Baker” for sold oven | RUR 523,800 | Bank statement |
91.9 | 99 | The amount of profit from the sale of a rotary kiln is taken into account (RUB 523,800 – RUB 79,902 – RUB 161,730 – RUB 1,860) | RUR 280,308 | Profit and Loss Statement |
Material assets with a long service life can be acquired by business entities for the purpose not of a production nature, but of transferring them to other companies for temporary possession to generate income. At the same time, current accounting rules require that records of such objects be kept separately from the company’s fixed assets.
The legislation determines that profitable investments in material assets should be considered financing the purchase of objects with a long period of use, which are endowed with a tangible form and are transferred to other entities for use in their economic activities for a certain period of time for a fee established by the contract.
These include, for example:
- Building.
- Facilities.
- Equipment.
- Vehicles, etc.
That is, in essence, these are fixed assets (fixed assets). But they have a main distinguishing feature - these assets are used in activities not by the owner himself, but by those who lease these assets. Thus, income-generating investments represent leased assets.
The company must carry out separate accounting of fixed assets and income-generating investments, since they have a different nature of use by the entity.
The rules of law require that objects acquired and transferred by an organization to another entity under a rental or leasing agreement must still be reflected in the accounting and reporting of the direct owner.
In this case, it does not matter for what funds the property was acquired - from own sources or from borrowed capital.
These objects must be registered at their original cost, which is the sum of the actual costs incurred for their purchase or construction.
Attention! However, like objects, these assets should be reflected in reporting at their residual value, that is, the amount of depreciation accrued during their use is subtracted from the original cost. A separate line 1160 is provided to reflect information about these objects.
What is taken into account on account 03 of accounting
Specifics of profitable investments in real estate
Real estate is a special kind of property. According to the law, it is necessary to register ownership with the issuance of an appropriate certificate.
In this regard, accountants sometimes have a question - in what period of time to transfer the value of an object from account 08 to account 03 - before receiving the certificate, or after that.
There is one more feature associated with real estate objects. The law obliges to calculate and transfer property taxes to the budget. This must be done for the first time on the 1st day of the month, which follows the month of its acceptance for registration in the business entity.
PBU 6/01 establishes the rule that an object begins to be accounted for in account 01 or 03 from the moment it fully meets the criteria of a fixed asset. At the same time, this document does not say a word about the need to wait for official paper from a government agency - a certificate. The Ministry of Finance and the Federal Tax Service adhere to the same position in their letters.
Attention! At the same time, it is recommended that the organization itself does not have any confusion - which object has already received state registration and which has not, and that they be taken into account in different sub-accounts. For example, within the group, open two sub-accounts - “Objects that have passed state registration” and “Objects awaiting state registration”.
How to evaluate profitable investments
When assessing income-generating investments, the same rules are used as for fixed assets.
Initially, the value of such an asset is collected from its direct value, reduced by the amount of taxes, as well as all related expenses.
The latter may include:
- Transportation costs;
- Costs of engaging third-party specialists (for example, appraisers);
- Travel and fuel expenses, if they were associated with the acquisition of this object;
- Mandatory deductions, customs payments and state duties;
- Cost of materials used;
- etc.
Thus, all costs associated with the purchased object are collected in account 08. This is done until it is ready to be rented out or leased to generate income. After completion of all necessary work, the accumulated costs for the facility are transferred in one amount to account 03.
Attention! The state duty, if it was paid before the cost was transferred to account 03, can also be included in the costs of the object. Otherwise, it should be taken into account in account 91.
Which accounts does account 03 correspond to?
From the debit of account 03, postings can be made to the following accounts:
- 08 - acceptance of acquired property for accounting as an income-generating investment;
- 76 - the value of the property for rent is being clarified due to a previously made mistake;
- 80 - property for rent was received from the participant as a contribution to the authorized capital.
On the credit of account 03, debit correspondence entries can be made with the following accounts:
- - transfer of property from the category of profitable investments into fixed assets;
- - write-off of depreciation of a retiring income investment;
- 76 - compensation for part of the cost of a profitable investment through insurance due to its damage;
- 80 - property was transferred to the founders upon his/her withdrawal from the company;
- 91 - the value of property is written off upon disposal or sale;
- 94 - the shortage of income-generating property is reflected;
- 99 - write-off of the value of an income-generating investment as a result of its loss due to an emergency.
Accounting entries for account 03
The postings that are made with account 03 are in many ways similar to those made for fixed assets.
The table below shows the main accounting entries: | Debit | Credit |
Acquisition of property | ||
Property purchased for further rental | ||
19 | 60 | VAT is deducted from the sales amount |
68 | 19 | VAT credited |
03/1 | 08 | The acquired property is accounted for as an income-generating investment. |
Renting, leasing | ||
03/2 | 03/1 | Transfer of property for rent or leasing |
02 | Depreciation has been calculated | |
03/1 | 03/2 | Return of property previously leased, leasing |
Disposal of property | ||
03/Disposal | 03/1 | The value of the property is written off |
02 | 03/Disposal | Accrued depreciation on retiring assets was written off |
91 | Property sold | |
91 | 68 | VAT charged on the sale of property |
91 | 03/Disposal | Residual value written off as expenses |