In accounting, postings to account 10 (Materials) play an important role. The cost of production and the final result of any type of activity - profit or loss - depend on how correctly and timely they were capitalized and written off. In this article we will look at the main aspects of accounting for materials and posting them.
The concept of materials and raw materials in accounting
These nomenclature groups include assets that can be used as semi-finished products, raw materials, components and other types of inventory assets for the production of products and services, or used for the own needs of an organization or enterprise.
Purposes of materials accounting
- Control of their safety
- Reflection in accounting of all business transactions related to the movement of inventory items (for cost planning and management and financial accounting)
- Formation of cost (materials, services, products).
- Control of standard stocks (to ensure a continuous cycle of work)
- Revealing
- Analysis of the effectiveness of the use of mineral reserves.
Subaccounts 10 accounts
PBUs establish a list of certain accounting accounts in the Chart of Accounts that should be used to account for materials in accordance with their classification and item groups.
Depending on the specifics of the activity (budgetary organization, manufacturing enterprise, trade and others) and accounting policies, accounts may be different.
The main account is account 10, to which the following sub-accounts can be opened:
| Subaccounts to the 10th account | Name of material assets | A comment |
| 10.01 | Raw materials | |
| 10.02 | Semi-finished products, components, parts and structures (purchased) | For the production of products, services and own needs |
| 10.03 | Fuel, fuel and lubricants | |
| 10.04 | ||
| 10.05 | Spare parts | |
| 10.06 | Other materials (for example: ) | For production purposes |
| 10.07, 10.08, 10.09, 10.10 | Materials for processing (outside), Construction materials, Household supplies, inventory, |
The chart of accounts classifies materials according to product groups and the method of inclusion in a certain cost group (construction, production of own products, maintenance of auxiliary production and others, the table shows the most used ones).
Correspondence on account 10
The debit of 10 accounts in the postings corresponds with production and auxiliary accounts (on credit):
- 25 (general production)
In order to write off materials, also in accounting policy choose your method. There are three of them:
- at average cost;
- at cost of inventories;
- FIFO.
Materials are released into production or for general business needs. Situations are also possible when surpluses are written off and defects, losses or shortages are written off.
Example of postings on account 10
The Alpha organization bought 270 sheets of iron from Omega. The cost of materials was 255,690 rubles. (VAT 18% - 39,004 rubles). Subsequently, 125 sheets were released into production at average cost, another 3 were damaged and written off as scrap (write-off at actual cost within the limits of natural loss norms).
Cost formula:
Average cost = ((Cost of remaining materials at the beginning of the month + Cost of materials received for the month) / (Number of materials at the beginning of the month + Number of materials received)) x number of units released into production
Average cost in our example = (216686/270) x 125 = 100318
Let's reflect this cost in our example:
| Account Dt | Kt account | Wiring description | Transaction amount | A document base |
| 60.01 | 51 | Paid for materials | 255 690 | Bank statement |
| 10.01 | 60.01 | to the warehouse from the supplier | 216 686 | Request-invoice |
| 19.03 | 60.01 | VAT included | 39 004 | Packing list |
| 68.02 | 19.03 | VAT is accepted for deduction | 39 004 | Invoice |
| 20.01 | 10.01 | Posting: materials released from warehouse to production | 100 318 | Request-invoice |
| 94 | 10.01 | Writing off the cost of damaged sheets | 2408 | Write-off act |
| 20.01 | 94 | The cost of damaged sheets is written off as production costs | 2408 | Accounting information |
The well-known abbreviation C&M is inventory, a whole block of funds called current assets, without which not a single production process can operate. Typically, inventory is the basis for processing materials into a product produced by a company. Let's talk about inventory items: composition, accounting, movement and place in the strict hierarchy of the balance sheet.
Getting to know the goods and materials
The decoding of this concept combines general information about inventories and includes several types of funds, classified as follows:
Raw materials and supplies;
Spare parts;
Semi-finished products own production in warehouses;
Purchased and finished products;
Construction Materials;
Fuel and lubricants;
Returnable waste and useful residues;
Household equipment;
Tara. 
Inventory and materials are working capital, objects of labor used for economic needs, consumed in the production process and increasing the cost of the manufactured product. Inventories are the most liquid (after financial assets) assets of a company. Term effective use materials does not exceed 1 year.
Inventory accounting
Like all assets, inventories must be accounted for, and for this purpose several balance sheet accounts are provided and a number of unified primary documents and synthetic accounting registers have been developed. In the balance sheet, inventory items are accumulated in the second section “Current assets”. It reflects the balance of inventories in monetary terms at the beginning and end of the reporting period. 
Information about the availability of inventories in the balance sheet is the final result of the accounting work carried out, information about the dynamics of the movement of materials is reflected in primary documents and generalized registers - order journals and materials accounting sheets.
Admission
Receipt of inventory materials is usually carried out as follows:
Purchase for a fee from supplier companies;
Mutual exchange in barter transactions;
Free supply from the founders or higher organizations;
Capitalization of products produced in-house;
Receipt of useful residues during the dismantling of obsolete equipment, machines or other property.
Any receipt of supplies is documented. For valuables purchased from suppliers using invoices and invoices, a receipt order f is made in the storeroom. No. M-4. It becomes the basis for entering information about the quantity and cost of inventories into the warehouse accounting card f. No. M-17. 
When making deliveries without an accompanying invoice or identifying differences in the cost or quantity of materials actually received with information in the documents, an acceptance certificate f. No. M-7. It is compiled by a special authorized commission, which receives materials based on actual availability and discount prices. The total surplus is subsequently reflected as an increase in debt to the supplier company, and the identified shortage of goods and materials is the reason for filing a claim against it.
Receipt of materials by the forwarder or other representative of the recipient company at the supplier's warehouse is formalized by issuing a power of attorney f. No. M-2 or M-2a - a document authorizing the receipt of goods and materials on behalf of the enterprise. For the arrival of materials of one's own production in the storeroom, a requirement-invoice f. No. M-11.
Useful residues coming from dismantling production equipment, buildings or other assets are included in the warehouse according to the act f. No. M-35, which indicates the object of dismantling, quantity, price and cost of incoming returnable waste.
Features of pricing in materials accounting
The completed documents for the receipt of goods and materials are transferred to the accountant who maintains the relevant records. The accounting policy of the enterprise accepts one of two existing options inventory cost accounting. They can be accounted for at actual or accounting prices. 
Actual prices of inventory items are the amounts paid to suppliers in accordance with concluded agreements, reduced by the value of refundable taxes, but including payment of costs associated with the purchase. This accounting method is used mainly by companies with a small range of inventories.
Accounting prices are set by the enterprise independently in order to simplify cost accounting. This method is preferable if there are many types of values in the enterprise. Let's look at the differences between prices using the examples given.
Example No. 1 – accounting when using actual cost
Argo LLC purchases office supplies for office work for a total amount of 59,000 rubles including VAT. The accountant makes notes:
D 60 K 51 – 59,000 – invoice paid.
D 10 K 60 – 50 000 – capitalization of inventory items.
D 19 K 60 – 9,000 – VAT on purchased inventories.
D 26 K 10 – 50,000 – write-off of inventory items (products issued to employees).
Discount prices
This method involves the use of balance sheet account No. 15 “Procurement/purchase of inventory items”, the debit of which should reflect the actual costs of purchasing inventories, and the credit their accounting price. 
The difference between these amounts is debited from the account. 15 on account No. 16 “Deviations in the cost of inventory items.” Total differences are written off (or reversed in case of negative values) to the main production accounts. When selling inventories, differences from the variance account are reflected in the debit of the account. 91/2 “Other expenses”.
Example No. 2
PJSC Antey purchased paper for work - 50 packages. In the supplier's invoice, the purchase price is RUB 6,195. with VAT, i.e. the price of 1 package is 105 rubles, with VAT – 123.9 rubles.
Accounting entries:
D 60 K 51 – 6,195 rub. (paying the bill).
D 10 K 15 – 5,000 rub. (posting of paper at book price).
D 15 K 60 – 6,195 rub. (the actual price is fixed).
D 19 K 60 – 945 rub. (“input” VAT).
The accounting value was 5,000 rubles, the actual value was 5,250 rubles, which means:
D 16 K 15 – 250 rub. (the amount of excess of the actual price over the book price is written off).
D 26 K 10 – 5,250 rub. (the cost of paper transferred to production is written off).
At the end of the month, deviations taken into account in the debit of the account. 16, are written off to cost accounts:
D 26 K 16 – 250 rub.
Storage of goods and materials
Stored assets are not always reflected on balance sheet accounts as acquired. Sometimes a company's storerooms contain materials that do not belong to the company. This happens when warehouse space is rented out to other enterprises or goods and materials belonging to other companies are accepted for safekeeping, i.e. they are responsible only for the safety of goods and materials. 
Such materials do not participate in the production process of the organization and are taken into account on the balance sheet in account 002 “Inventory and materials accepted for safekeeping.”
The transfer of goods and materials for safekeeping is formalized by drawing up appropriate agreements that fix all the main terms of the contract: terms, cost, circumstances.
Disposal of inventory items
The movement of materials is a normal production process: they are regularly released for processing, transferred for their own needs, sold or written off when emergency situations. The release of supplies from the storeroom is also documented. Accounting documents for disposal are different. For example, the transfer of limited materials is formalized with a limit-fence card (form M-8). When consumption rates are not established, the supply is made upon request - invoice f. M-11. The sale is accompanied by the issuance of an invoice f. M-15 for release of goods and materials to the side.
Valuation of inventory items during release
When releasing inventories into production, as well as during other disposals, inventory items are assessed using one of the methods that mandatory stipulated by the company's accounting policy. They are applied for each group of materials, and one method is valid for one financial year.
Inventory materials are assessed by:
Cost of one unit;
Average cost;
FIFO, i.e. at the price of the first materials at the time of acquisition.
The first of these methods is used for inventories used by companies in an unusual manner, for example, when producing products from precious metals, or with a small range of groups of materials. 
The most common method is to calculate the price using the average cost. The algorithm is as follows: the total cost of a type or group of materials is divided by the quantity. The calculation takes into account inventory balances (quantity/amount) at the beginning of the month and their receipt, i.e. such calculations are updated monthly.
In the FIFO method, the cost of materials upon disposal is equal to the value of the acquisition price over time. early dates. This method is most effective if prices rise and loses relevance if the emerging situation provokes a fall in prices.
Accounting entries for disposal of inventory items
D 20 (23, 29) K 10 – transfer to production.
D 08 K 10 – leave for self-construction.
D 91 K 10 – write-off upon sale or gratuitous transfer.
Analytical accounting of inventory items is organized in storage areas, i.e. in storerooms, and represents the mandatory maintenance of accounting cards for each item of materials. The responsible persons are storekeepers, and the controllers are accounting workers. At the end of the month, the storekeeper displays the balances of inventory items on cards, which indicate the movement, beginning and ending balances, the accountant checks them with the documents and certifies the accuracy of the storekeeper's calculations with a signature in a special column of the card.
In accounting, based on documented transactions, the accountant displays the balance of inventories in value terms, which is recorded in the second section of the balance sheet as the cost of inventory items. A breakdown of the balances for each item is given in the materials accounting statement.
We all encounter problems at work. a huge amount objects around us: inventory, equipment, office equipment, furniture, stationery, you never know what else... But what are these things correctly called in accounting and what does this concept represent? So, the topic of our conversation today is: “Inventory and materials: decoding, essence, methods and rules for their evaluation.” Have you started?
What is goods and materials
Inventory and materials are, i.e., the assets of an organization that are used as raw materials in the process of producing products intended for further sale or provision of services. In other words, all that an enterprise has is goods and materials. The decoding, as you can see, is straightforward. And many people think so, until it comes to taking into account and evaluating these very values.
According to Federal Law No. 129-FZ and Regulations accounting in the Russian Federation, organizations must periodically conduct inventory. What kind of procedure this is will be discussed further. So…
Inventory in an enterprise: what is it and why is it needed?
We briefly figured out what inventory materials mean. What is inventory? This is a check of the actual availability of inventory items at the enterprise. It is carried out to control property and funds. The end result The measure is to compare the actual balance of material assets indicated in the inventory list with accounting data at the time of re-registration.
It is possible to conduct a full inventory or a selective one at the discretion of management. Below we will consider the basic rules for inventory inventory.
We act in accordance with the law
For reliable accounting and reporting, organizations should conduct an inventory of their property, during which they check and document its condition, valuation and availability. The timing of this event and its order are determined by management.
There are cases when inventory is mandatory:
- When transferring property for rent, sale, redemption.
- Before the annual report.
- When changing responsible persons.
- When a shortage is detected, a fire, or in other extreme situations.
- In other cases, in accordance with the legislation of the Russian Federation.
Discrepancies found during the inventory between the actual amount of property and accounting data will be reflected in the accounts in the following order:
- Surplus property is accounted for, and a certain amount is recorded in the financial result of the enterprise.
- Shortages within normal limits are attributed to natural production costs. Anything in excess of the norms is recovered from the guilty persons. If the culprits are not identified or their guilt is not proven, then the shortage is attributed to the financial result.
Reasons for inventory inventory
Before carrying out the inventory, the director signs an order in the INV-22 form. It is prepared, as a rule, no later than ten days before the expected event. This document must also indicate the reasons for the inventory. They can be different:
- Control check.
- Change of financially responsible persons.
- Detection of facts of theft.
- Transfer of property for sale, rent, redemption.
- In case of emergency events.
Types of inventories
- Full. It affects all property and liabilities of the company. This is a very labor-intensive process, carried out once a year before submitting the annual report.
- Partial. Its purpose is to analyze one type of enterprise funds.
- Selective. This is a type of partial inventory, which is carried out on damaged and outdated items.
There is one more classification. By type economic activity There are planned, unplanned and repeated inventories. Planned ones are carried out periodically according to schedule. Unscheduled are sudden inspections. Well, repeat ones are carried out in cases of need, when problems have arisen with the data of the main check, to clarify some positions.
Inventory stages
The inventory process itself consists of several stages. The first is preparatory. Everything is simple here. This is the preparation of valuables for recount, as well as the preparation of all documents, compiling lists of all financially responsible persons, determining the methods and timing of the event.
The second stage is actually checking the actual availability of material assets and drawing up inventory lists. It should be noted that acts and inventories are compiled according to standard forms and are primary accounting documents. They can be written by hand or printed. In any case, they must be correctly formatted.
The inventories indicate inventory items, their quantity and cost. Errors made during the preparation of statements must be corrected in both copies. An incorrect entry is crossed out with one line and written above it. correct value. All corrections are agreed upon between members of the commission and financially responsible persons. You cannot leave blank lines (if there is space left, dashes are added). The statements are signed by all members of the commission and financially responsible persons.
If the re-accounting was carried out due to a change in responsible persons, then the act is signed at the end by the new materially responsible person, confirming that he accepted the inventory items.
The third stage is very important - this is data analysis and reconciliation of information with what is shown in accounting. In essence, the difference between the actual presence of values and accounting data is revealed. Then management looks for reasons for discrepancies, if any are found.
Well, the fourth stage is the correct preparation of documentation. It is at this stage that it is necessary to bring the inventory results into strict compliance with accounting data. those guilty of incorrect accounting are punished.
This is how an inventory of goods and materials is carried out. The decoding of this concept and the essence of the procedure are already known to you. We also looked at the stages of holding an event that is so disliked by many (and almost everyone). Now let's talk about what should actually be classified as inventory items. Is all property valuable? What methods of estimating inventory materials exist today?
Methods for valuing inventories
As already mentioned, goods and materials (explained at the beginning of the article) is a term that is used to define materials owned by an enterprise. They may also be intended for sale to consumers or used in the production of their own products.
There are several most common methods for assessing them:
- Piece estimate. Each unit of goods is counted individually.
- First Inventory Method, otherwise known as First In, First In (FIFO). It is based on the assumption that those inventory items that are in inventory the longest are the ones that are sold or used the fastest.
- The last inventory method, the second name is “Last in inventory - first in production” (LIFO). The estimate is based on the assumption that the last items purchased will be the first to be sold.
- Average cost method. In this case, there is an assumption that all inventory items are mixed in a random sequence, and the sale occurs at random.
- Moving average technique. Here it is assumed that the flow of goods is randomly mixed with each new one and their sale occurs in the same random way.
Combining different methods
It should be noted that for the benefit of the enterprise, you can combine all kinds of methods for assessing inventory items. If you have homogeneous inventories with constant prices, then you can use one method. In practice, such cases are extremely rare. After all, the materials are usually very different, so they use using different methods. Inventories are conditionally combined into groups, and a different method is applied to each. You decide for yourself which options to choose, the main thing is that this is enshrined in the accounting policy of the enterprise.
In our article, we discussed how inventory items are deciphered, what methods exist for valuing a company’s property, what it is and why an inventory of goods is needed. inventories and how it is carried out. All these questions are not so difficult, however, a beginner in the field of accounting may have certain problems. However, they too can be resolved with the accumulation of experience; the main thing is to understand what should be classified as inventory items, because this will greatly facilitate their correct accounting.
As some scientists say: “Our whole life consists of numbers.” They accompany a person everywhere and always. Every day a person makes various calculations and does not even notice it. But there are people who have made working with numbers their profession. These are not mathematicians, but accountants. The most difficult and responsible area of work is inventory accounting.
Who is a material desk accountant?
An accountant of any department is, first of all, accounting specialist. No matter the size of the enterprise, such an employee must be present. If the organization is small, then one employee is responsible for maintaining all areas of accounting: accrual wages, accounting for inventory, working with suppliers and contractors, generating and submitting reports and much, much more.
If the enterprise is large, then an entire accounting service is created, headed by a chief accountant. Each specialist is assigned a specific area of work. In very large corporations, accounting specialists will be divided into departments, for example, a material department, where each specialist will be responsible for accounting for a certain type of inventory.
The position of a material accountant is one of the most difficult, since it requires the greatest scrupulousness, perseverance and even pedantry. Usually such places are occupied by women, since such a task is too painstaking for men.
With the advent computer technology And special programs, the work of an accountant has become easier. A material desk accountant has to work with a huge amount of paper documents every day. This is a specialist high level, since at any moment he must provide accurate information about the availability of material assets.
In order to understand the essence of the work of a material accountant, you must first understand the subject of accounting. Inventory and materials are current assets of the enterprise, without them its normal existence is not possible and they are in constant motion. Briefly Inventories can be called industrial inventories and include the following groups of materials:
- raw materials and materials;
- spare parts;
- semi-finished products, both our own production and purchased from suppliers;
- finished products of own production;
- purchased goods;
- fuels and lubricants (fuels and lubricants - gasoline, diesel fuel, oil, antifreeze and similar materials);
- returnable waste and useful residues;
- household equipment;
- container
That is, a material accountant is engaged in accounting for the current assets of the enterprise, objects of labor, and other material assets used in the production process, which have a direct impact on changes in the cost of the final product.
This position is mainly in demand at enterprises involved in the production of various products.
Accounting for material assets occurs at enterprises in various industries, but an accounting employee has a slightly different area of activity and title. So in the field of trade - this is a storekeeper or warehouse manager, in enterprises involved in transportation - a specialist in accounting and write-off of fuels and lubricants.
The essence of the activity is, of course, very similar, but a material table accountant is a specialist of a higher level and qualification.
What requirements are put forward to a materialist?
Depending on the size of the enterprise and its personnel composition, various requirements are imposed on the new employee, which relate to education and previous work experience. Some businesses impose age or gender restrictions.
Here is an average list of requirements for candidates for the position of material desk accountant:
- education corresponding to the position held (secondary specialized or higher education in accounting and auditing);
- ability to work on a computer ( Word programs, Excel, knowledge of accounting programs, etc.);
- knowledge and ability to work with primary documentation (invoices, incoming and outgoing warehouse documents, statements for write-off of material assets and other documentation approved for circulation at this enterprise);
- understanding the essence of the movement of materials and the accounting entries corresponding to this movement;
- knowledge of the basics of accounting and tax legislation;
- knowledge of the rules for documenting the movement of materials;
- 1 year or more experience in a relevant position (this requirement is not always present, but preference is always given to more experienced specialists);
- individual qualities: erudition, responsibility, scrupulousness, ability to work in a team.
Accountant-materialist must be able to see more than just numbers, but also quickly analyze related information. Very often there are discrepancies in the units of measurement of materials. A materials accountant must be able to bring all this into uniform compliance and develop your own accounting technology.
Large enterprises engaged in the export-import of products may put forward knowledge requirements foreign languages, international standards accounting, knowledge of the basics of foreign economic activity.
Very often and completely unjustifiably, enterprise administrations introduce an age censor for candidates for vacant positions, although such restrictions are prohibited by law. For example, if a candidate is over 35 years old, then he should not even try to submit a resume to this company.
According to staffing table, a vacancy for an accountant in the corresponding category may be released or created, then qualification requirements may be put forward:
- accountant category I;
- accountant II category;
- accountant of the highest category;
- junior accountant.
A material desk accountant must be a responsible, efficient and stress-resistant employee, capable of coping with a large flow of information. This is a person who loves his profession and takes the responsibilities assigned to him seriously.
Responsibilities
Every enterprise has the right independently determine the scope of responsibilities of employees in accordance with the area of work assigned to him. That is, depending on the amount of information required for processing, the enterprise may have one accountant of the material desk or several employees involved in individual areas of accounting.
For a specialist in inventory accounting assigned to perform the following duties:
- Keeping records of the movement of material assets (accounting for receipts at the warehouse, issues from the warehouse, movement between departments and workshops, reporting to the financially responsible person and other procedures related to accounting for inventory items) in accordance with the established class of accounting accounts;
- Write-off of materials, semi-finished products, defects in accordance with existing standards and instructions at the enterprise;
- Control over the correct execution of primary documentation and ensuring its safety;
- Accounting for the material part of production costs and control over excess consumption of materials;
- Generation of reliable reports on the quantity and value of material balances for the manager, chief accountant or other responsible officials as of any date of the month;
- Formation and control of inventory balances on the first day of each month;
- Maintaining accounting documentation provided for in the instructions and ensuring its safety and integrity throughout the entire established period;
- Participation in inventory, generation of data on its results;
- Participation in the development of measures to improve the efficiency of inventory accounting, puts forward his own wishes and suggestions;
- Interaction with all materially responsible employees of the enterprise (warehouse manager, storekeepers and other accounting employees).
The above listed job responsibilities can be both expanded and narrowed at the enterprise in accordance with the wishes of the director and chief accountant.
Example of a job description
When hiring, a personnel accounting specialist must familiarize him with the job description. This is a document that clearly regulates the employee’s labor duties, his rights and the extent of responsibility for violation of duties and general rules work of the organization.
The job description of an accountant for inventory accounting consists of the following sections:
- general provisions;
- functional responsibilities;
- rights;
- responsibility;
- final provisions.
General provisions describe the basic requirements for a specialist who has the right to occupy this position, how he is hired and fired, and to whom he directly reports. A list of legislative acts, regulations, orders of the state level and a list of internal orders is also clearly formulated, methodological manuals and instructions that the material accountant must know and follow accurately.
Section about functional responsibilities described in detail in the subsection “job descriptions”.
Rights section, gives the specialist certain competence and powers:
- Take full part in the discussion of innovations affecting his area of work;
- If necessary and with the prior consent of management, involve other employees of the enterprise to fulfill specific goals related to the material table;
- Receive from employees of other departments the information necessary to complete the tasks assigned to him;
- Present demands to the enterprise administration to improve working conditions and provide assistance in the performance of the tasks and functions assigned to the employee.
After signing job description The management of the enterprise has the right not only to demand from the employee the strict implementation of all its points, but also hold accountant accountable:
- For failure to fulfill duties;
- For violation of discipline, safety regulations or internal regulations and orders;
- For causing material damage or concealing information that led to the loss of material assets.
For each of the points, punishment is provided in accordance with labor, civil, administrative and even criminal legislation.
The final section is usually records the fact that the employee has read the job description and an indication that it is drawn up in two copies - one for the employee, the other for the enterprise.
A good inventory accountant is worth his weight in gold. The final financial result of the organization’s work and its taxation depend on his attentiveness, intelligence and knowledge. The material table is a critical area that requires not only certain qualifications and experience, but also talent.
Commodity- productive reserves are integral part groups of material resources that form economic (production) resources.
In the accounting literature there are many different concepts related to inventories, however, it should be taken into account that each of them has own interpretation. Thus, in the accounting literature the concept of “inventory” is often used, replaced by the concept of “materials”. Some authors, when defining the concept of “tangible current assets,” use the term “values.” However, the concept of “value” is a descriptive category, a sign, a qualitative indicator that characterizes inventories as economic elements that are beneficial to their owner and can bring him economic benefits.
Inventories are classified as current assets because they can be converted into cash within a year or one operating cycle.
The use of the term “material and production reserves” is associated with certain contradictory issues, because material reserves are not only objects of labor, but also means of labor. Therefore, this concept is broader, since it covers all assets that have a material form and are used in the production process.
The terms “inventory assets” and “inventories” are not widely accepted for use because they cover assets in tangible form that may be either reversible or irreversible. In this case, the emphasis is on the possibility of selling such assets.
Certain contradictions associated with the use of the term “objects of labor”. The concept of “objects of labor” sufficiently corresponds to the essence of the elements of production undergoing processing.
The term “inventory” to the greatest extent reflects the characteristic properties of the material elements of production, the main purpose of which is processing during the production process, forming the basis of products, while taking into account the possibility of being included in reserves in the form of inventories in a warehouse or finished products (goods) located in warehouses.
Along with this, one cannot fail to take into account the existence of the term “inventories”, which, according to P (C) BU 9 “Inventories”, combines the main components of current tangible assets. The use of this term causes certain contradictions associated with its interpretation in the accounting literature. Thus, most authors understand the term “reserves” as a reserve of material resources that are not used in the current activities of the enterprise and are intended to ensure the continuity of the production process and storage in case of need. That is, the concept of “reserves” is quite specific.
Inventories are the current assets of an enterprise, used primarily in one operating cycle of the enterprise or during a period of one year.
Inventories form the basis of products and contribute to the manufacturing process or improve the properties of finished products.
Each type of inventory is assigned a nomenclature number developed by the organization in the context of their names and/or homogeneous groups (types).
The item number is a unit of accounting for inventories and is a short numerical designation assigned to each name, grade, size, and brand of inventories. Nomenclature numbers assigned to materials are recorded in a special register called nomenclature-price tag
The classification of inventories according to their purpose and method of use in the production process is presented in Figure 1.2.
Figure 1.2 - Classification of inventories
Raw materials are objects of labor intended for use in the production process and representing the material (material) basis for the manufacture of products (performance of work, provision of services).
Components are products of the supplier organization purchased to complete products manufactured by the manufacturing organization.
Auxiliary materials are materials used to influence raw materials and basic materials, impart certain consumer properties to products, or for servicing and caring for tools and facilitating the production process (lubricants and cleaning materials, etc.).
In the group of auxiliary materials, due to the peculiarities of use, fuel, containers and packaging materials, as well as spare parts are separately distinguished.
Fuel is carbon and hydrocarbon substances that are released during combustion thermal energy. Fuel is divided into the following types:
Technological (used for technological purposes in the production process);
Engine (fuel - gasoline, diesel fuel, etc.);
Household (used for heating).
Containers and packaging materials are items used for packaging and transporting products, storing various materials and products. There are the following types of containers: containers made of wood, containers made of cardboard and paper, containers made of metal, containers made of plastic, containers made of glass, containers made of fabrics and non-woven materials.
Spare parts are items intended for repairs, replacement of worn parts of machines, equipment, vehicles, etc.
Returnable production waste is the remains of raw materials and materials formed during their processing into finished products, which have lost partially or completely the consumer properties of the original raw materials and materials (stumps, trimmings, shavings, sawdust, etc.).
Remains of materials that, in accordance with established technology, are transferred to other workshops and divisions as full-fledged material for the production of other types of products are not considered returnable waste.
Inventory and household supplies are items with an expiration date. beneficial use up to 12 months or normal operating cycle.
Methodological basis for the formation of information on the recognition, valuation of reserves and their disclosure in financial statements are defined in P (C) BU 9 "Reserves". According to P (C) BU 9, inventories are assets that:
Preserved for further sale under normal business conditions (goods, finished products);
Are in the process of production for the purpose of further sale of the production product (work in progress);
Stored for consumption during the production of products and services, as well as for enterprise management (raw materials, basic and auxiliary materials).
Norms P (C) BU 9 "Reserves" do not apply to the following reserves:
Work in progress under construction contracts, including contracts for the provision of services that are directly related to them;
Financial assets ( securities, held for the purpose of sale, etc.);
Young animals and fattening animals, agricultural and forestry products, minerals, if they are valued at net worth implementation.
For accounting purposes, inventories are grouped as follows:
Raw materials, basic and auxiliary materials, components and other material assets intended for the production of products, performance of work and provision of services, maintenance of production and administrative needs;
Finished products manufactured at the enterprise are intended for sale.
At the same time, it must meet the technical and quality characteristics provided for by the contract or other legal act;
Goods in the form of material assets that are purchased and stored at the enterprise for the purpose of subsequent sale;
Low-value and high-wear items that are used for no more than one year or the normal operating cycle if it is more than one year;
Young animals and fattening animals, agricultural and forestry products;
Work in progress in the form of unfinished processing and assembly of parts, assemblies, products and unfinished technological processes.
Inventories are recognized by the enterprise under the following conditions:
It is probable that the entity will receive future economic benefits associated with their use;
Their value can be reliably determined.
As a rule, an enterprise includes in inventories as of the balance sheet date only the values actually received and writes them off from inventories as actually shipped. However, in some cases, under the terms of supply contracts, the inventory may include those that have already been shipped from the enterprise (the ownership of which it retains), and those that should arrive if the purchasing company has transferred ownership of them, that is goods are shipping.
Schematically, the group of enterprise reserves is shown in Figure 1.3.
Figure 1.3 Grouping of enterprise inventories
The transfer of ownership of goods in transit and the risks and rewards associated with it are determined by the terms of delivery. The list of delivery conditions is given in the International Rules for the Interpretation of Commercial Terms "INCOTERMS", which are used in many countries around the world, including Ukraine. The most common of them are FCA, EXW, FOB and others.
FCA (free carrier) means that the seller delivers the goods to the buyer, who will also be the carrier at the place specified in the agreement. The moment of transfer of ownership will be the receipt by the buyer of the goods and documents for them in the place specified in the agreement. Further costs for delivery of goods are at the expense of the buyer.
EXW (ex-factory) the buyer receives the goods directly at the manufacturer’s enterprise along with documents. The moment of transfer and receipt of goods means for the seller (manufacturer) the fact of transfer of ownership and the risks and benefits associated with this right, for the buyer - the fact of receiving the goods into ownership. Delivery of goods from the manufacturer (seller) to the buyer is carried out at the buyer’s expense.
It is not considered a transfer to the actual shipment of inventories from the enterprise's warehouse under agency agreements. Mediation includes activities in which one subject entrepreneurial activity(intermediary), by proxy, in the interests and at the expense of another entity (customer), carries out certain legal or actual actions with third parties, including ensuring the conclusion and implementation of business agreements between them. The direct result of intermediary activities under the terms of concluded contracts is a service for which the intermediary receives payment (commissions). The following forms of intermediary operations are possible, determined by the terms of the concluded agreements: commissions, consignment, storage, trust management and others.
If an enterprise has actually received inventories, but has not received supplier documents for these inventories, then it can recognize them as a balance sheet under the following conditions:
Their supply is provided for in previously concluded contracts;
The quantity and quality of the received supplies satisfies the buyer;
The buyer can make a reliable assessment of the inventory.
Consequently, the enterprise includes in inventory balances:
Own stocks located in warehouses, stores, production workshops are completely controlled by him;
Own stocks located in warehouses, control over which is limited;
Inventory in transit, for which, under the terms of the concluded agreements, the enterprise has transferred ownership;
Uninvoiced deliveries.
Not included in inventories:
Materials accepted for processing;
Material assets accepted for safekeeping;
Products on commission;
Material assets received under a storage agreement;
Material assets received as lifelong maintenance;
Advance payment for material assets.
In the production process, along with the means of labor, objects of labor are involved, which act as production reserves. Unlike means of labor, objects of labor participate in the production process only once, and their value is fully included in the cost of the products produced, constituting its material basis.
Accounting for inventories at enterprises is organized in accordance with accounting standard No. 9 “Inventories”, which defines the scope of the standard, changes in inventories, their cost and valuation, recognition of expenses, and disclosure in reporting. This standard is used by entities when preparing and disclosing financial statements prepared on the basis of calculating the cost of inventory. The second group consists of semi-finished products obtained through cooperation from one industrial enterprise to another.
For the correct organization of inventory accounting, their scientifically based classification is important. Reserves are classified according to the following criteria (Table 1.3).
Table 1.3 - Classification of reserves and their characteristics
|
Classification groups of reserves |
Type of inventory |
Characteristic |
|
|
By purpose and reasons for education |
Permanent |
Part of production and goods inventories ensuring continuity production process between two next deliveries |
|
|
Seasonal |
inventories formed during seasonal production of products or during seasonal transportation |
||
|
By location |
Warehouse |
Inventories located in the company's warehouses |
|
|
In production |
Inventory in process |
||
|
The items sold have been shipped to the consumer and have not yet been received by them, are in transit |
|||
|
Based on availability at the beginning and end of the reporting period |
Initial |
The amount of inventories at the beginning of the reporting period |
|
|
Final |
The amount of inventories at the end of the reporting period |
||
|
Regarding balance |
Balance sheet |
Inventories that are the property of the enterprise and are reflected in the balance sheet |
|
|
Off-balance sheet |
Inventories that do not belong to the enterprise and are in its possession due to circumstances |
||
|
By degree of liquidity |
Liquid |
Industrial and commodity inventories that are easily converted into cash in short time and without significant losses in the initial value of such reserves |
|
|
Illiquid |
Industrial and commodity inventories that cannot be easily converted into cash in a short time and without significant loss of the initial value of such inventories |
||
|
By origin |
Primary |
Inventories received by the enterprise from other enterprises and not subject to processing at this enterprise |
|
|
Secondary |
Materials and products, after initial use, can be used for a second time in production |
||
|
By volume |
Available |
Inventories that are in excess at the enterprise |
|
|
Limited |
Reserves located in limited quantities at the enterprise |
||
|
By area of use |
In the field of production |
Inventory in process of production (inventory, work in progress) |
|
|
In the field of volume |
Inventories in circulation (finished products, goods) |
||
|
In the non-production sphere |
Inventory that is not used in production |
||
|
By composition and structure |
Industrial inventories (objects and means of labor) |
Stocks of raw materials, basic and auxiliary materials, semi-finished products of own production, purchased semi-finished products, components, fuel, spare parts, containers and packaging materials, small and medium-sized products |
This classification of inventories ensures the fulfillment of the main tasks of inventory accounting and control, including:
Ensuring timely documentation of inventory movements;
Control over the complete and timely receipt of inventories and their preservation in storage areas and at all stages of processing;
Ensuring Compliance warehouse stocks standards;
Reliable assessment of reserves;
Calculation of the actual cost of materials consumed and their surplus;
Reflection of transactions for the capitalization and consumption of inventories in the accounting system, etc.
Documents for received inventories contain information about the quantity and cost of inventories, but if such data is not in the documents, then such documents are not accepted for accounting. Upon acceptance, inventories are subject to a thorough check; acceptance into the warehouse and posting of incoming inventories is carried out according to accompanying documents.
The listed tasks contribute to the generation of information for inventory management. In the field of inventory management, information is important on the formation of the required volume and composition of inventories in order to ensure a continuous process of production and sales of products while minimizing current maintenance costs and ensuring effective control over their movement. For management purposes, accounting information is used to:
Determination of fundamental approaches to the formation of enterprise reserves;
Daily receipt of information on the receipt and consumption of inventories in terms of their quantity, quality and financially responsible persons;
Analysis of the availability and movement of inventories in previous periods;
Continuous assessment of the real value of inventories in the warehouse, and analysis of the efficiency of use of inventories;
Optimizing the volume of inventory purchases, identifying reserves for reducing costs associated with stockpiling;
Optimization of the volume of main groups of reserves;
Choosing a method for valuing inventories at disposal that is best suited for the enterprise;
Creation effective system control over the movement of inventories in the enterprise;
Monitoring compliance with stock standards established by the enterprise;
Increasing the reliability of reflection in the accounts of the analytical volume of business transactions for the receipt and expenditure of inventories;
Timely preparation and submission of reports on inventory movements.
Inventories are assets in the form of:
Stocks of raw materials, materials, purchased semi-finished products and components (parts), fuel, containers and packaging materials, spare parts, other materials intended for use in production or in the performance of work and services;
Work in progress;
Finished products, goods intended for sale in the course of the entity’s activities.
The main tasks facing inventory accounting are:
Control over the timely and complete posting of inventories and their safety in storage areas;
Timely and complete documentation of all inventory movements;
Timely and correct definition transportation and procurement costs (TZR) and the actual cost of prepared stocks;
Control over the uniform and correct write-off of material and equipment for production or distribution costs;
Monitoring the condition of warehouse stocks;
Identification and sale of material reserves unnecessary to the entity in order to mobilize internal resources;
Obtaining accurate information about the balances and movement of inventories at their storage locations.
According to their functional role and purpose in the production process, all inventories are divided into main and auxiliary.
Basic - These are materials that are materially included in manufactured products, forming its material basis.
Auxiliary materials are materials that are part of the manufactured product, but, unlike the main materials, do not create the material basis of the manufactured product. These materials are used as components to basic materials to impart the required qualities to products.
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