How Do I Charge For The Long-Term Accounts Receivable?

(1) what is the pre payment?

There is no complete concept in prepaid collection, no matter in financial criterion or tax law. Generally speaking, it refers generally to funds that have not been provided by commodities (products), labor services or services, or have been provided in stages, but have not yet been reached before the confirmation of revenue.

For a worker (business) enterprise, it usually refers to the way of selling the goods before the goods have been received, or the installment of the goods before the seller receives the last sum.

The "pre collection" subjects of the industrial and commercial enterprises calculate the amount that the enterprise collates to the purchasing unit in accordance with the contract stipulations.

The form of pre payment sales generally occurs in the case of tight products. For long time and cross year manufacturing projects, there will be an installment funding agreement.

The cancellation of overdue receivables for industrial enterprises is discussed here.

Other types of enterprises can also be referred to.

(two) revenue recognition of normal receipts under normal circumstances.

1, the provisions of the enterprise accounting standards for income recognition

According to the provisions of the sixth chapter of the decision of the Ministry of Finance on the revision of the accounting standards for enterprises, the basic principles of the Ministry of finance, the seventy-sixth chapter of the Ministry of finance of the People's Republic of China,

The thirtieth income refers to the total inflow of economic interests which are caused by the increase of owners' equity and the capital invested by the owners.

The thirty-first revenue can be recognized only if the economic benefits are likely to flow into the enterprise, resulting in increased assets or liabilities, and the inflow of economic benefits can be measured reliably.

Thirty-second items that conform to the definition of income and the conditions of income recognition should be included in the profit statement.

2. The accounting standards for small enterprises confirm the revenue of the sales receipts.

The fifty-ninth item (two) of the accounting standards for small businesses: when the sale proceeds are prepaid, the revenue is recognized when the commodity is issued.

Therefore, under normal circumstances, the enterprise will confirm the revenue when the goods are delivered or delivered on the basis of the performance of the contract or agreement.

Borrowing: advance collection

Loan: revenue (main business income)

(three) how to deal with overdue receivables?

There is no definite provision for overdue early collection, but there is a basis for reference:

1, according to the contract or agreement to deal with.

Under normal circumstances, there will be corresponding overdue treatment agreements, and the corresponding confirmation can be made.

2, there is no agreement, the buyer did not require delivery or refund of goods for a long time.

This situation is generally very special, basically because the other side business has died out for some special reason, and no one has managed the money.

For enterprises, they are unpaid unexpected gains.

At this point, the revenue can be recognized according to the period when confirmation is unable to pay.

3, the reference document is based on:

The administrative measures for pre tax deduction of enterprise assets loss income tax (State Administration of Taxation Announcement No. twenty-fifth 2011) twenty-third: "accounts receivable overdue for more than three years in accounting have been treated as losses, which can be regarded as a loss of bad debts, but it should state the situation and issue special reports."

The twenty-fourth rule: "if the enterprise overdue for more than one year, the amount of a single amount does not exceed fifty thousand or does not exceed 1/10000 of the total annual income of the enterprise, the accounting has already been treated as a loss, which can be regarded as a loss of bad debts, but it should state the situation and issue a special report."

The above is a report on the loss of overdue receivables. Then, does the other party need to deal with earnings?

On the basis of the above analysis, the author thinks that if the pre payment exceeds the time limit for the settlement of the contract or the agreement, the other party does not require the delivery or refund. Although there is no current provision to confirm the proceeds, the enterprise should refer to the method of reporting losses of the overdue receivables, and verify the other party's proceeds and confirm the proceeds in the corresponding circumstances.

The foregoing receivables of these enterprises have been over five years, and can be turned into income processing after verification.

The twenty-second provision for the pre tax deduction of enterprise assets loss income tax stipulates that the loss of accounts receivable and prepayment should be confirmed according to the following relevant evidence:

(1) contracts, agreements or descriptions of related matters;

(two) where a debtor is bankrupt and liquidated, he or she shall have a bankruptcy and liquidation notice of the people's court.

(three) in the case of litigation, a written judgment or arbitral award of the people's court or an arbitral instrument of the arbitration agency or a legal document executed by the court shall be issued.

(four) where a debtor stops business, he or she shall prove that the business department has cancelled and revoked its business license.

(five) the death or disappearance of a debtor shall be proved by the public security organ and other relevant departments to the death and disappearance of the debtor.

(six) debt restructuring should be explained by the debt restructuring agreement and the debtor's reorganization of the income tax.

(seven) a force majeure and other unrecoverable acts, such as natural disasters, wars, etc., should be explained by the debtor's disaster situation and the waiver of claims.

(four) what accounts are included in the overdue collection?

According to the "accounting standards for enterprises" - the basic principles "fifth chapter" owners' rights and interests "in the twenty-seventh article on the provisions of" gains "refers to the inflow of economic interests which are caused by the non daily activities of enterprises, which will lead to the increase of owners' equity and have nothing to do with the capital invested by the owners.

Therefore, the enterprises that perform the accounting standards should be included in the relevant subjects according to the "income" and not included in the income subjects.

The sixty-eighth provision of "accounting standards for small enterprises" stipulates: "non operating income" refers to the net inflow of economic interests formed by small businesses, which should be included in the profits and losses of the current period, which will result in the increase of owners' rights and interests and have nothing to do with the capital invested by the owners.

The non operating income of small businesses includes: net income from disposal of non current assets, government subsidies, donation income, profit from inventory gains, exchange earnings, rental income of rental packages and commodities, overdue payment of packaging deposits, unpayable debts, receivables recovered after handling bad debts and proceeds from liquidated damages.

Usually, the extra income of small businesses should be included in the current profits and losses according to the actual cash amount.

Therefore, enterprises that implement small accounting standards should be included in the "extra income" subject.

Two, how to deal with the problem of tax collection in advance collection.

(1) whether the cancellation of overdue pre payment involves VAT?

According to the detailed rules for the implementation of the Provisional Regulations on value-added tax, the sale of goods means the pfer of ownership of goods on a compensatory basis.

According to the thirty-eighth provision of the detailed rules for the implementation of the Provisional Regulations on value added tax, "the goods that are sold on the same day, but the goods, such as large machinery, equipment, ships, aircraft, which are produced and sold for more than 12 months, are sold on the same day as the date of collection of the receivable or written contract."

Therefore, the pre paid receipts will only generate the duty of VAT after the goods are issued.

The above enterprises have not issued goods yet, so they do not involve VAT.

(two) treatment of income tax after overdue collection.

The notice of the State Administration of Taxation on certain issues concerning the recognition of enterprise income tax income ([2008]875) has made clear the confirmation of sales revenue and labor income, and does not involve the cancellation of overdue pre payment.

According to the twenty-second provision of the regulations on the implementation of the enterprise income tax law, "the other income referred to in item sixth (nine) of the enterprise income tax law" refers to other income except the income stipulated in article sixth (item 1) to (eight) of the enterprise income tax law, which includes the excess income of enterprise assets, the deposit receipts of overdue unpackaged items, the amount of receivables that are indeed not payable, the receivables recovered after the disposal of the bad debts, the income of debt restructuring, the income of subsidies, the income of liquidated damages, and the earnings of remittances.

Overdue prepayment for bad debt cancellation can be recognized as other income with reference to the item, and the enterprise income tax shall be included in the taxable income.

As a predetermined commodity, commodity or project, the prepayment will normally be performed in accordance with the contract or agreement.

There are always some special situations in the long term accounts receivable or write offs.

Judging from the inspection situation, because the other company does not require invoices, the collection of money is always hung on the prepaid account for a long time, but the situation is rather long.

Therefore, the long-term accounts receivable will inevitably become the object of concern of the tax authorities.

To this end, the State Administration of Taxation issued the notice of the "enterprise income tax settlement and declaration tax verification and certification business guidelines (Trial Implementation)" (National Tax [2007] 10) to clarify the audit requirements for the collection of accounts receivable (extract the corresponding part):

1, the use of pre account sales method should be recognized when the commodity has been issued.

Combined with the accounts receivable, stock and other subjects, it is necessary to check whether there is any paction that has been collected and has not been recorded in the commodity paction.

2. Audit of advance accounts.

(1) obtain the detailed list of the advance payment and check it with the subsidiary ledger and the general ledger.

(2) initially confirm whether the contract, order and payment items of the customers are paying the relevant tax according to the tax law.

(3) check the amount of debit and related assets or expenses.

(4) check the contract, order sheet, acceptance list, purchase invoice, customer's bill and other related annexes and vouchers, check whether the amount payable is correct.

(5) for the amount of long-term debts, the rationality and accuracy of enterprise assets and related expenses should be mainly examined, and whether the proceeds of bad debts have been dealt with according to the tax law.

(6) where necessary, the advance payment can be certified.

(7) check the relevant delivery records or provide service records, and check whether the accounts receivable are sold in a timely and correct manner.

In the case of unsold advance payment, special attention should be paid to whether there is any untimely or untimely treatment.

(8) checking the correctness of the calculation of the exchange rate and the exchange gains and losses of the advance payment account.

(9) to conduct an aging analysis of accounts payable, and to examine whether the accounts payable for more than 3 years can be increased by taxable income.

In short, if the receivables are overdue and clearly no longer shipped or refunded, they should be converted into profits in time, and the amount of taxable income should be calculated and declared to pay the income tax.

Those who make use of the advance payment to deal with the sales that have already been realized will be punished once they are verified by the tax authorities.

With the increasing attention paid to tax affairs worldwide, technology companies need to prove that their tax strategies are subject to severe regulatory scrutiny in the future.

In tax matters, any inconsistent situation will cause serious damage to the company's reputation, competitiveness or income.

For today's ambitious businesses, tax matters are more important than ever before.

In the past few years, people's attitudes towards tax planning have changed a lot.

Many technology companies, especially large multinational companies, have been criticized for tax problems.

Negative public influence may hurt the technology giants, but will have a greater impact on growth firms that are expanding and forging a reputation.

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