Write-off method based on average actual cost. Write-off of materials at average cost. Calculation of the actual cost per unit of production

MPZ may also differ. This leads to the fact that the actual cost of different batches of the same materials may be different. Often, when writing off materials for production, it is impossible to determine exactly which batch these materials are from, especially with a large range of materials. Therefore, the organization must choose and consolidate in its accounting policy a method for writing off inventories into production.

Clause 16 of PBU 5/01 and clause 73 of the Guidelines for accounting The following methods have been established for assessing inventories when released into production and other disposals:

· at the cost of each unit;

· at average cost;

· using the FIFO method (at the cost of the first materials purchased);

· using the LIFO method (at the cost of the most recent materials purchased).

When considering the legally established methods for estimating written-off materials, it should be borne in mind that in accordance with paragraph 78 of the Methodological Guidelines for the accounting of inventories, the use of methods for average estimates of the actual cost of materials (at average cost, according to the FIFO and LIFO method) released into production or written off for other purposes, can be carried out in the following ways:

Based on the average monthly actual cost (weighted estimate), which includes the quantity and cost of materials at the beginning of the month and all receipts for the month ();

By determining the actual cost of the material at the time of its release (rolling estimate), while the calculation of the average estimate includes the quantity and cost of materials at the beginning of the month and all receipts up to the time of release.

The use of a rolling assessment must be economically justified and supported by appropriate computer technology.

The option for calculating average estimates of the actual cost of materials should be disclosed in the accounting policies of the organization.

Along with the weighted average cost estimation method, in which the average cost of all materials of a given type received in a given month is calculated, taking into account the incoming balance, a moving average cost estimate can be applied, when the average cost is recalculated for each moment of supply. In this case, the calculation should include the incoming balance, and only those batches that arrived before the corresponding issue of materials. If, when using the FIFO method, the cost of materials issued was calculated only at the end of the month, then when using the FIFO method on a rolling basis, the cost of materials issued can be calculated without waiting for the end of the month. After all, this method assumes that materials are issued from the earliest batches that have already arrived at the time the materials were issued.

Similar to the FIFO method according to the standard and modified options, the use of the LIFO method in a rolling estimate allows you to determine the cost of materials sold without waiting for the end of the month.

The application of one of the specified methods for a group (type) of inventories is based on the assumption of consistency in the application of accounting policies.

According to paragraph 6 of the Accounting Regulations “Accounting Policy of the Organization” PBU 1/98, approved by Order of the Ministry of Finance of the Russian Federation dated December 9, 1998 No. 60n, the assumption of consistency in the application of accounting policies means that the one adopted by the organization is applied consistently from one reporting year to another.

It should be noted that for accounting purposes, an organization can use different write-off methods for different groups of inventory.

Clause 21 of PBU 5/01 establishes that for each group (type) of inventories during the reporting year, one valuation method is used.

Let's take a closer look at each of these methods.

4.1. Write-off of materials at cost of each unit

The method of writing off materials at the cost of each unit is convenient for use in cases where an organization uses a small range of materials in production and you can easily track which batch the materials were written off from, and their prices remain fairly stable over a long period. In this case, accounting is kept for each batch of materials separately, and materials are written off exactly at the prices at which they were accepted for accounting.

In addition, this method should be used to evaluate the following types of MPN:

· materials that are used in a special manner - precious metals, precious stones, radioactive substances and other similar materials;

· Inventories that cannot be routinely replaced with each other.

Paragraph 74 of the Guidelines for accounting of inventories, approved by Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 No. 119n, proposes two options for writing off materials at the price of each unit:

1. The unit cost includes all costs associated with the acquisition of these inventories. This method is used when it is possible to accurately determine the amounts of acquisition costs that relate to different materials.

2. A simplified method, according to which only the cost of inventories at contract prices is included in the unit cost, and transportation and other costs associated with their acquisition are accounted for separately and written off in proportion to the cost of materials written off for production at contract prices. This method is used when it is impossible to accurately determine what share of transportation and procurement costs relates to each specific batch of purchased materials.

Example.

At the beginning of the month, the organization had 120 kilograms of paint remaining in the amount of 3,600 rubles at actual cost.

Two batches of paint were purchased within a month:

The first batch is 150 kilograms, the cost of the batch is 3,200 rubles

Second batch - 200 kilograms, batch cost - 5,600 rubles

Transport costs amounted to 1000 rubles

Accounting for materials is carried out with the inclusion of transportation and procurement costs in the actual cost. For ease of calculation, all amounts are given without VAT.

The actual cost of paint is:

Balance at the beginning of the month: 3,600 / 120 = 30-00 rubles

First batch: (3,200 + 1,000) / 150 = 28-00 rubles per 1 kilogram

Second batch: (5,600 + 1,000) / 200 = 33-00 rubles per 1 kilogram

Used during the month:

100 kilograms of paint from the remainder at the beginning of the month

90 kilograms of paint from the first batch

120 kilograms of paint from the second batch

The cost of used paint is:

100 x 30-00 + 90 x 28-00 + 120 x 33-00 = 9,480 rubles

The main advantage of the method of writing off inventories at the cost of each unit is that all materials are written off at their actual cost without any deviations. However, this method is applicable only in cases where the organization uses a relatively small range of materials, when it is possible to accurately determine which materials are written off.

In cases where it is impossible to accurately track which materials from which particular batch were released into production, it is advisable to use one of the three methods described below.

Write-off of materials at average cost

In accordance with paragraph 18 of PBU 5/01, the method of writing off inventories at average cost is as follows. For each type of materials, the average unit cost is determined as the quotient of dividing the total cost of these materials (the sum of the cost of materials at the beginning of the month and those received during the month) by the quantity of these materials (the sum of the balance at the beginning of the month and those received during the month).

The cost of materials written off for production is determined by multiplying their quantity by the average cost. The cost of the balance at the end of the month is determined by multiplying the amount of material on balance by the average cost. Thus, the average unit cost of materials may vary from month to month. The balance of inventory accounts is reflected at average cost.

Example.

At the beginning of the month, the organization has 1,500 m of fabric remaining, the average cost is 95 rubles per 1 m. Within a month the fabric arrived:

1st batch: 1,000m at a price of 89-50 rubles per 1m;

2nd batch: 500m at a price of 100 rubles per 1m;

3rd batch: 1,200 m at a price of 80 rubles per 1 m.

During the month, 3,500 m of fabric were used to produce.

The average cost of fabric is:

(1500 x 95 + 1000 x 89-50 + 500 x 100 + 1200 x 80) / (1500 + 1000 + 500 + 1200) = 90 rubles per 1 m.

The cost of fabric written off for production is: 3,500 x 90-00 = 315,000 rubles.

Remaining fabric at the end of the month: (1,500 + 1,000 + 500 + 1,200) – 3,500 = 700 m.

Cost of remaining fabric at the end of the month: 700 x 90-00 = 63,000 rubles

Write-off of materials using the FIFO method

The FIFO method (from English First In First Out) is also called the conveyor model.

In accordance with paragraph 19 of PBU 5/01, this method is based on the assumption that materials are written off for production in the sequence in which they were purchased. Materials from subsequent batches are not written off until the previous one is completely used up. Wherein way materials, released into production, are valued at the actual cost of materials, the first in the time of acquisition, and the balance of materials at the end of the month is valued at the cost of the last in time of acquisition.

In the event that the first lots purchased in time are cheaper, and subsequent ones are more expensive, the use of the FIFO method leads to the following result - materials are written off to production at a lower cost, accordingly, the cost of production is lower and the profit is higher.

If prices for materials tend to decrease, then, on the contrary, if the FIFO method is used, profit will decrease.

The literature suggests two methods for determining the cost of materials written off for production using the FIFO method.

1. First, materials are written off at the cost of the first purchased batch; if the quantity of written-off materials is greater than this batch, the second is written off, and so on. The balance of materials is determined by subtracting the cost of written-off materials from the total cost of materials received for the month (taking into account the balance at the beginning of the month).

2. The balance of materials at the end of the month is determined at the price of the most recent purchase. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

Example.

Within a month we received:

The total cost of incoming paint is:

1 option

A total of 270 cans of paint were written off, and first the balance at the beginning of the month (100 cans) was written off completely, then the first batch (120 cans) was written off. Since the total quantity is larger, the remaining quantity is written off from the second batch 270 – (100 + 120) = 50 cans

100 x 35-00 + 120 x 40-00 + 50 x 45-00 = 10,550-00 rubles

(3,500-00 + 13,400-00) – 10,550-00 = 6,350-00 rubles

With this option, it is necessary to accurately determine which materials from which batches make up the balance at the end of the month, since they will be written off first next month.

The balance is:

From the second batch: 80 – 50 = 30 cans for the amount of 30 x 45-00 = 1,350-00 rubles;

The third batch remains at the end of the month in full: 100 x 50-00 = 5,000-00 rubles

Option 2

The balance at the end of the month is 130 cans, and the third batch (100 cans) is included in the balance in full, since this is not enough, 30 cans from the second batch are also included in the balance.

100 x 50-00 + 30 x 45-00 = 6,350-00 rubles

The cost of scrapped paint is:

(3 500-00 + 13 400-00) – 6 350-00 = 10 550-00.

The average cost of one can of scrapped paint is:

10 550-00 / 270 = 39-07 rubles

From the examples given, it is clear that the cost of written-off materials and the balance are the same when using both options. With the second option, it is enough to accurately determine which materials from which batches make up the balance in the warehouse, and the cost of written-off materials is determined by calculation without necessarily being allocated to a specific batch, whereas with the first option, it is necessary to accurately determine from which batches the materials are written off and remain at the end month. This option becomes very labor-intensive if materials are purchased quite frequently during the month.

Write-off of materials using the LIFO method

The LIFO method (from English Last In First Out) is also called the barrel model.

According to paragraph 20 of PBU 5/01, this method is based on the assumption that materials are written off for production in the reverse order of the order in which they were purchased. Materials from previously purchased batches are not written off until the last one is used up. Under the LIFO method, materials released into production are valued at the actual cost of the materials that were most recently acquired, and the balance of materials at the end of the month is valued at the cost of the materials that were most recently purchased.

In the event that the first batches purchased in time are cheaper, and subsequent ones are more expensive, the use of the LIFO method leads to the fact that materials are written off to production at a higher cost, respectively, the cost of production is higher and the profit is lower.

If prices for materials tend to decrease, then, on the contrary, if the LIFO method is used, the amount of income tax will decrease.

The literature suggests two methods for determining the cost of materials written off for production using the LIFO method.

1. First, materials are written off at the cost of the last purchased batch; if the quantity of materials written off is greater than this batch, the previous one is written off, and so on. The balance of materials is determined by subtracting the cost of written-off materials from the total cost of materials received for the month (taking into account the balance at the beginning of the month).

2. The balance of materials at the end of the month is determined at the price of the first purchases. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

Example.

Let's use the conditions of the previous example.

At the beginning of the month, the remaining paint amounted to 100 cans at a price of 35-00 rubles per can.

The balance at the beginning of the month is: 100 x 35-00 = 3,500 rubles

Within a month we received:

1 batch: 120 cans at a price of 40-00 rubles per can;

2nd batch: 80 cans at a price of 45-00 rubles per can;

3rd batch: 100 cans at a price of 50-00 rubles per can.

Total cost of paint received:

120 x 40-00 + 80 x 45-00 + 100 x 50-00 = 13,400-00 rubles

During the month, 270 cans of paint were written off for production, the balance at the end of the month was 130 cans.

1 option

A total of 270 cans of paint were written off, and first the third batch (100 cans) was written off completely, then the second batch (80 cans) was written off. Since the total quantity is greater, the remaining quantity is written off from the first batch: 270 – (100 + 80) = 90 cans

Cost of scrapped paint:

100 x 50-00 + 80 x 45-00 + 90 x 40-00 = 12,200-00 rubles

The average cost of one can of scrapped paint is:

The cost of the remaining paint is:

(3,500-00 + 13,400-00) – 12,200-00 = 4,700-00 rubles

With this option, it is necessary to accurately determine which materials from which batches make up the balance at the end of the month, since this data is needed to correctly assign materials to specific batches when written off in subsequent months.

The balance is:

From the first batch: 120 – 90 = 30 cans for the amount of 30 x 40-00 = 1,200-00 rubles;

The paint, which was the balance at the beginning of the month, is fully included in the balance at the end of the month: 100 x 35-00 = 3,500-00 rubles

Option 2

The balance at the end of the month is 130 cans, and the paint that was in the balance at the beginning of the month (100 cans) remains unused and at the end of the month, since this is not enough, 30 cans from the first batch are also included in the balance.

The value of the balance at the end of the month is:

100 x 35-00 + 30 x 40-00 = 4,700-00 rubles

The cost of scrapped paint is:

(3,500-00 + 13,400-00) – 4,700-00 = 12,200-00 rubles

Average cost of one can of scrapped paint:

12 200-00 / 270 = 45-19 rubles

Thus, under the LIFO method, the cost of scrapped materials and remaining balance is also the same when using both options. With the second option, it is enough to accurately determine which materials from which batches make up the balance in the warehouse, and the cost of written-off materials is determined by calculation without necessarily being allocated to a specific batch, whereas with the first option, it is necessary to accurately determine from which batches the materials are written off and remain at the end month. If you frequently purchase materials, the first option is inconvenient due to the complexity of the calculations.

Comparison various methods write-off of materials

When using the methods of writing off inventories - at average cost, FIFO or LIFO - the calculated values of the cost of written-off materials and balances at the end of the period differ from each other. This, in turn, affects the cost of production, the amount of profit and the amount of property tax. Therefore, when choosing a material write-off method, you need to determine which criteria are the most important.

Example.

At the beginning of the month, the balance of materials was 300 units at a price of 110-00 rubles per unit for a total amount of: 300 x 110-00 = 33,000-00 rubles

Within a month we received:

1st batch: 500 units at a price of 130-00 rubles per unit for a total amount of 65,000-00 rubles;

2nd batch: 600 units at a price of 170-00 rubles per unit for a total amount of 102,000-00 rubles;

3rd batch: 200 units at a price of 180-00 rubles per unit for a total amount of 36,000-00 rubles

Total cost of materials:

33,000-00 + 65,000-00 + 102,000-00 + 36,000-00 = 236,000-00 rubles

A) Average cost method.

The average unit cost is: 236,000-00 / 1,600 = 147-50 rubles

The cost of written-off materials is: 1,200 x 147-50 = 177,000-00 rubles

The balance at the end of the month is: 400 x 147-50 = 59,000-00 rubles

B) FIFO method

Balance at the end of the month: 200 x 180-00 + 200 x 170-00 = 70,000-00 rubles

Cost of written-off materials: 236,000-00 – 70,000-00 = 166,000-00 rubles

Average cost per unit of scrapped materials: 166,000-00 / 1,200 = 138-33 rubles

Average cost per unit of materials on balance: 70,000-00 / 400 = 175-00 rubles

B) LIFO method

Balance at the end of the month: 300 x 110-00 + 100 x 130-00 = 46,000-00 rubles

Cost of written-off materials: 236,000-00 – 46,000-00 = 190,000-00 rubles

Average cost per unit of written-off materials: 190,000-00 / 1,200 = 158-33 rubles

Average cost per unit of materials on balance: 46,000-00 / 400 = 115-00 rubles

Index	Average cost method	FIFO method	LIFO method
	177 000-00	166 000-00	190 000-00
	147-50	138-33	158-33
Balance at the end of the month	59 000-00	70 000-00	46 000-00
	147-50	175-00	115-00

Thus, we see that, subject to a constant increase in prices for materials, when using the FIFO method, the cost of written-off materials is the lowest, and the cost of materials on balance is maximum. In this case, the cost of production is lower and, accordingly, the profit from the sale of products is higher.

When applying the LIFO method, the cost of written-off materials is maximum, while the cost of production increases and, accordingly, profit decreases.

When using the average cost write-off method, the cost of written-off materials and, therefore, the cost of production is less determined by price fluctuations and can remain at a fairly stable level.

From this we can draw the following conclusion: the LIFO method is convenient for minimizing income taxes. The FIFO method is the most disadvantageous for these purposes, since in this case taxes increase. However, if an organization aims to obtain maximum profit and, consequently, increase the amount of dividends paid, it is more convenient to use the FIFO method. In addition, this method allows you to obtain more reliable data on the cost of written-off materials and the cost of production, since in practice materials are usually written off in the order they were received.

These conclusions hold true if material prices increase. If prices for materials tend to decrease, then the FIFO method becomes more convenient for minimizing taxes, and the LIFO method is least suitable for these purposes. The average cost method still produces averages.

To demonstrate the advantages and disadvantages of various methods of writing off inventories, we examined options in which prices for materials either constantly increase or constantly decrease. In practice, prices for materials can either increase or decrease. In this case, the differences between the methods are not so obvious.

Example.

Let's change the conditions of the previous example.

At the beginning of the month, the balance of materials was 300 units at a price of 110-00 rubles per unit for a total amount of 33,000-00 rubles

Within a month we received:

1st batch: 500 units at a price of 170-00 rubles per unit for a total amount of 85,000-00 rubles;

2nd batch: 600 units at a price of 180-00 rubles per unit for a total amount of 108,000-00 rubles;

3rd batch: 200 units at a price of 130-00 rubles per unit for a total amount of 26,000-00 rubles

Total quantity of materials (balance at the beginning of the month and received materials):

300 + 500 + 600 + 200 = 1,600 units.

Total cost of materials:

33,000-00 + 85,000-00 + 108,000-00 + 26,000-00 = 252,000-00 rubles

During the month, 1,200 units were consumed.

Balance at the end of the month: 1,600 – 1,200 = 400 units.

A) Average cost method.

The average unit cost is: 252,000-00 / 1,600 = 157-50 rubles

The cost of written-off materials is: 1,200 x 157-50 = 189,000-00 rubles

The balance at the end of the month is: 400 x 157-50 = 63,000-00 rubles

B) FIFO method

Balance at the end of the month: 200 x 130-00 + 200 x 180-00 = 62,000-00 rubles

Cost of written-off materials: 252,000-00 – 62,000-00 = 190,000-00 rubles

Average unit cost of scrapped materials:

190,000-00 / 1,200 = 158-33 rubles

Average cost per unit of materials on balance: 62,000-00 / 400 = 155-00 rubles

B) LIFO method

Balance at the end of the month: 300 x 110-00 + 100 x 170-00 = 50,000-00 rubles

Cost of written-off materials: 252,000-00 – 50,000-00 = 202,000-00 rubles

Average cost per unit of scrapped materials: 202,000-00 / 1,200 = 168-33 rubles

Average cost per unit of materials on balance: 50,000-00 / 400 = 125-00 rubles

Let's combine the results into a table.

Index	Average cost method	FIFO method	LIFO method
Cost of scrapped materials	189 000-00	190 000-00	202 000-00
Average unit cost of scrapped materials	157-50	158-33	168-33
Balance at the end of the month	63 000-00	62 000-00	50 000-00
Average cost per unit of materials on balance	157-50	155-00	125-00

As we see, in conditions this example all three methods give similar results, and when using the average cost and FIFO methods, the obtained values are almost the same. Depending on price movements, there may be situations where average cost and LIFO, or FIFO and LIFO, or all three methods will produce the same results.

You can find out more about accounting and tax accounting of industrial production in the book of JSC “BKR Intercom-Audit” “Materials, semi-finished products, workwear, special equipment”

To evaluate (write off) materials for production, you can use the average cost method (average price method). What is its essence? Let's look at it in more detail using an example.

The average cost write-off method is defined in clause 18 of PBU 5/01. Its essence is that the average cost per unit of each type of materials is calculated as follows: take the total cost of this type of materials at the beginning of the month and add the cost of the same materials received for a given month. Then we divide the resulting amount by the amount of materials, which is the sum of the balances of this type of materials at the beginning of the month and the amount of materials received for a given month.

When written off for production, the cost of materials used is determined by multiplying the amount of materials used by the average cost.

The balance of materials is determined as follows: multiply the amount of materials by the average cost.
Therefore, the average cost of materials may vary from month to month. The balance is reflected in balances at average cost.

Example.

LLC "Paint and Varnish Plant" as of October 1, 2014 has a balance of blue pigment in the amount of 1000 kg at an average cost of 190 rubles. for 1 kg. During the month, the receipts of blue pigment were:

October 2 - (1st batch) - 1000 kg for 200 rubles. for 1kg;
October 5 - (2nd batch) - 500 kg for 180 rubles. for 1kg;
October 24 - (3rd batch) - 300 kg for 190 rubles. for 1kg;

During October, 1300 kg of pigment was used in the production.

Let's calculate the average cost of pigment:

(1000 x 190 + 1000 x 200 + 500 x 180 + 300 x 190) / (1000 + 1000 + 500 + 300) = 191.79 rubles per 1 kg.

Let's calculate the cost of pigment written off for production:

1,300 x 191.79 = 249,327 rubles.

We calculate the remaining pigment at the end of October:

(1,000 + 1,000 + 500 + 300) – 1,300 = 1,500 kg.

The average cost of pigment at the end of the month is calculated as follows:

1,500 x 191.79 = 287,685 rubles

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At enterprises, situations often arise when identical materials are purchased at different prices, for different suppliers, the amount of expenses included in the cost of inventories may also differ. This leads to the fact that the actual cost of different batches of the same materials may be different. Often, when writing off materials for production, it is impossible to determine exactly which batch these materials are from, especially with a large range of materials. Therefore, the organization must choose and consolidate in its accounting policy a method for writing off inventories into production.

Clause 16 of PBU 5/01 and clause 73 of the “Methodological guidelines for accounting of inventories” establish the following methods for assessing inventories when released into production and other disposals:

¨ at the cost of each unit;

¨ at average cost;

¨ using the FIFO method (at the cost of the first materials purchased);

¨ using the LIFO method (at the cost of the materials most recently purchased).

It should be noted that for accounting purposes, an organization can use different write-off methods for different groups of inventory.

Let's take a closer look at each of these methods.

1.1.1. Write-off of inventories at the cost of each unit

In addition, this method should be used to evaluate the following types of MPN:

¨ Materials that are used in a special manner - precious metals, precious stones, radioactive substances and other similar materials;

¨ Inventories that are not normally interchangeable.

Paragraph 74 of the “Methodological guidelines for accounting of inventories” proposes two options for writing off materials at the price of each unit:

1) The unit cost includes all costs associated with the acquisition of these inventories. This method is used when it is possible to accurately determine the amounts of acquisition costs that relate to different materials.

2) A simplified method, according to which only the cost of inventories at contract prices is included in the unit cost, and transportation and other costs associated with their acquisition are accounted for separately and written off in proportion to the cost of materials written off for production at contract prices. This method is used when it is impossible to accurately determine what share of transportation and procurement costs relates to each specific batch of purchased materials.

Example.

At the beginning of the month, the organization had 120 kg of paint remaining in the amount of 3,600 rubles at actual cost.

Two batches of paint were purchased within a month:

1) 150 kg, batch cost - 3,200 rubles. Transport costs amounted to 1000 rubles.

2) 200 kg, batch cost - 5,600 rubles. Transport costs amounted to 1000 rubles.

Accounting for materials is carried out with the inclusion of transportation and procurement costs in the actual cost. For ease of calculation, all amounts are given without VAT.

The actual cost of paint is:

Balance at the beginning of the month: 3,600: 120 = 30-00 rub.

First batch: (3,200 + 1,000): 150 = 28-00 rubles per 1 kg.

Second batch: (5,600 + 1,000): 200 = 33-00 rubles per 1 kg

Used during the month:

100 kg of paint from the remainder at the beginning of the month;

90 kg of paint from the first batch;

120 kg of paint from the second batch.

The cost of used paint is: 100 x 30-00 + 90 x 28-00 + 120 x 33-00 = 9,480 rubles

In cases where it is impossible to accurately track which materials from which particular batch were released into production, it is advisable to use one of the three methods described below.

1.1.2. Write-off of inventories at average cost

The method of writing off inventories at average cost is as follows. For each type of materials, the average unit cost is determined as the quotient of dividing the total cost of these materials (the sum of the cost of materials at the beginning of the month and those received during the month) by the quantity of these materials (the sum of the balance at the beginning of the month and those received during the month).

Example.

At the beginning of the month, the organization's fabric balance is 1,500 m, the average cost is 95 rubles per 1 m 2. Within a month the fabric arrived:

1st batch: 1,000 m at a price of 89-50 rubles per 1 m;

2nd batch: 500m at a price of 100 rubles per 1m;

3rd batch: 1,200 m at a price of 80 rubles per 1 m.

During the month, 3,500 m of fabric were used to produce.

The average cost of fabric is:

(1500 x 95 + 1000 x 89-50 + 500 x 100 + 1200 x 80): (1500 + 1000 + 500 + 1200) = 90 rub. for 1m

The cost of fabric written off for production is: 3,500 x 90-00 = 315,000 rubles

Remaining fabric at the end of the month: (1,500 + 1,000 + 500 + 1,200) – 3,500 = 700 m

Cost of remaining fabric at the end of the month: 700 x 90-00 = 63,000 rubles

1.1.3. Write-off of inventories using the FIFO method

The FIFO method (from English First In First Out) is also called the conveyor model. It is based on the assumption that materials are written off for production in the sequence in which they were purchased. Materials from subsequent batches are not written off until the previous one is used up. With this method, materials released into production are valued at the actual cost of materials that were first in date of acquisition, and the balance of materials at the end of the month is valued at the cost of materials that were last in time of acquisition.

In the event that the first lots purchased in time are cheaper, and subsequent ones are more expensive, the use of the FIFO method leads to the following results:

¨ Materials are written off for production at a lower cost, respectively, the cost of production is lower and the profit is higher.

¨ The balance of materials on account 10 is reflected at higher prices.

If prices for materials tend to decrease, then, on the contrary, if the FIFO method is used, profit will decrease.

The literature suggests two methods for determining the cost of materials written off for production using the FIFO method.

1) First, materials are written off at the cost of the first purchased batch; if the quantity of materials written off is greater than this batch, the second batch is written off, etc. The balance of materials is determined by subtracting the cost of written-off materials from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

2) The balance of materials at the end of the month is determined at the price of the most recent purchase. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

Example.

Within a month we received:

The total cost of received paint is: 120 x 40-00 + 80 x 45-00 + 100 x 50-00 = 13,400-00 rub.

During the month, 270 cans of paint were written off for production, the balance at the end of the month was 130 cans.

1 option

The cost of scrapped paint is: 100 x 35-00 + 120 x 40-00 + 50 x 45-00 = 10,550-00 rub.

The average cost of one can of scrapped paint is: 10,550-00 / 270 = 39-07 rubles

The cost of the remaining paint is: (3,500-00 + 13,400-00) – 10,550-00 = 6,350-00 rub.

With this option, it is necessary to accurately determine which materials from which batches make up the balance at the end of the month, since they will be written off first next month.

The balance is:

From the second batch: 80 – 50 = 30 cans for the amount of 30 x 45-00 = 1,350-00 rubles;

The third batch remains at the end of the month in full: 100 x 50-00 = 5,000-00 rubles.

Option 2

The cost of the balance at the end of the month is: 100 x 50-00 + 30 x 45-00 = 6,350-00 rub.

The cost of scrapped paint is: (3,500-00 + 13,400-00) – 6,350-00 = 10,550-00.

The average cost of one can of scrapped paint is: 10,550-00 / 270 = 39-07 rubles.

Thus, the value of scrapped materials and remaining balance is the same using both options. With the second option, it is enough to accurately determine which materials from which batches make up the balance in the warehouse, and this is determined by calculation without necessarily being allocated to a specific batch, while with the first option, it is necessary to accurately determine from which batches the materials are written off and remain at the end of the month. This option becomes very labor-intensive if materials are purchased quite frequently during the month.

1.1.4. Write-off of inventories using the LIFO method

The LIFO method (from English Last In First Out) is also called the barrel model. It is based on the assumption that materials are written off into production in the reverse order of the order in which they were purchased. Materials from previously purchased batches are not written off until the last one is used up. With this method, materials released into production are valued at the actual cost of the materials that were most recently purchased, and the balance of materials at the end of the month is valued at the cost of the materials that were most recently purchased.

In the event that the first batches purchased are cheaper, and subsequent ones are more expensive, the use of the LIFO method leads to the following results:

¨ Materials are written off for production at a higher cost, respectively, the cost of production is higher and the profit is lower.

¨ The balance of materials on account 10 is reflected at lower prices.

If prices for materials tend to decrease, then, on the contrary, if the LIFO method is used, profits will decrease.

The literature suggests two methods for determining the cost of materials written off for production using the LIFO method.

1) First, materials are written off at the cost of the last purchased batch; if the quantity of materials written off is greater than this batch, the previous one is written off, etc. The balance of materials is determined by subtracting the cost of written-off materials from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

2) The balance of materials at the end of the month is determined at the price of the first purchase. The cost of materials written off for production is determined by subtracting the resulting value from the total cost of materials received during the month (taking into account the balance at the beginning of the month).

Example.

Let's use the conditions of the previous example.

At the beginning of the month, the remaining paint amounted to 100 cans at a price of 35-00 rubles per can.

The balance at the beginning of the month is: 100 x 35-00 = 3,500 rubles

Within a month we received:

1 batch: 120 cans at a price of 40-00 rubles per can;

2nd batch: 80 cans at a price of 45-00 rubles per can;

3rd batch: 100 cans at a price of 50-00 rubles per can.

Total cost of received paint: 120 x 40-00 + 80 x 45-00 + 100 x 50-00 = 13,400-00 rub. During the month, 270 cans of paint were written off for production, the balance at the end of the month was 130 cans.

1 option

Cost of scrapped paint: 100 x 50-00 + 80 x 45-00 + 90 x 40-00 = RUB 12,200-00

The average cost of one can of scrapped paint is:

12 200-00 / 270 = 45-19 rubles

The cost of the remaining paint is: (3,500-00 + 13,400-00) – 12,200-00 = 4,700-00 rub.

The balance is:

From the first batch: 120 – 90 = 30 cans for the amount of 30 x 40-00 = 1,200-00 rubles;

The paint, which was the balance at the beginning of the month, is fully included in the balance at the end of the month: 100 x 35-00 = 3,500-00 rubles.

Option 2

The balance at the end of the month is 130 cans, and the paint listed on the balance at the beginning of the month (100 cans) remains unused and at the end of the month, since this is not enough, 30 cans from the first batch are also included in the balance.

The cost of the balance at the end of the month is: 100 x 35-00 + 30 x 40-00 = 4,700-00 rub.

The cost of scrapped paint is: (3,500-00 + 13,400-00) – 4,700-00 = 12,200-00.

Average cost of one can of scrapped paint: 12,200-00 / 270 = 45-19 rubles.

1.1.5. Comparison of various methods for writing off inventories

When using the methods of writing off inventories - at average cost, FIFO or LIFO - the calculated values of the cost of written-off materials and balances at the end of the period differ from each other. This, in turn, affects the cost of production and the amount of profit. Therefore, when choosing a material write-off method, you need to determine which criteria are the most important.

Example.

Within a month we received:

1 batch: 500 units at a price of 130-00 rubles per unit for a total amount:

500 x 130-00 = 65,000-00 rub;

2nd batch: 600 units at a price of 170-00 rubles per unit for a total amount:

600 x 170-00 rubles = 102,000-00 rubles;

3rd batch: 200 units at a price of 180-00 rubles per unit for a total amount of:

200 x 180-00 = 36,000-00 rub.

Total quantity of materials (balance at the beginning of the month and received): 300 + 500 + 600 + 200 = 1,600 units.

Total cost of materials: 33,000-00 + 65,000-00 + 102,000-00 + 36,000-00 = 236,000-00 rub.

A) Average cost method.

The average unit cost is: 236,000-00 / 1,600 = 147-50 rubles

The cost of written-off materials is: 1,200 x 147-50 = 177,000-00 rub.

The balance at the end of the month is: 400 x 147-50 = 59,000-00 rub.

B) FIFO method

Balance at the end of the month: 200 x 180-00 + 200 x 170-00 = 70,000-00 rub.

Cost of written-off materials: 236,000-00 – 70,000-00 = 166,000-00 rub.

Average cost per unit of scrapped materials: 166,000-00 / 1,200 = 138-33 rubles

Average cost per unit of materials on balance: 70,000-00 / 400 = 175-00 rub.

B) LIFO method

Balance at the end of the month: 300 x 110-00 + 100 x 130-00 = 46,000-00 rub

Cost of written-off materials: 236,000-00 – 46,000-00 = 190,000-00 rub

Average cost per unit of written-off materials: 190,000-00 / 1,200 = 158-33 rubles

Average cost per unit of materials on balance: 46,000-00 / 400 = 115-00 rub.

Index	Average cost method	FIFO method	LIFO method
Cost of scrapped materials	177 000-00	166 000-00	190 000-00
	147-50	138-33	158-33
Balance at the end of the month	59 000-00	70 000-00	46 000-00
	147-50	175-00	115-00

When applying the LIFO method, the cost of written-off materials is maximum, while the cost of production increases and, accordingly, profit decreases. The cost of materials on balance is less.

Example.

Let's change the conditions of the previous example.

At the beginning of the month, the balance of materials was 300 units at a price of 110-00 rubles per unit for a total amount of: 300 x 110-00 = 33,000-00 rubles.

Within a month we received:

1 batch: 500 units at a price of 170-00 rubles per unit for a total amount:

500 x 170-00 = 85,000-00 rub;

2nd batch: 600 units at a price of 180-00 rubles per unit for a total amount:

600 x 180-00 rub = 108,000-00 rub;

3rd batch: 200 units at a price of 130-00 rubles per unit for a total amount:

200 x 130-00 = 26,000-00 rub.

Total quantity of materials (balance at the beginning of the month and received):

300 + 500 + 600 + 200 = 1,600 units.

Total cost of materials: 33,000-00 + 85,000-00 + 108,000-00 + 26,000-00 = 252,000-00 rub.

During the month, 1,200 units were consumed.

Balance at the end of the month: 1,600 – 1,200 = 400 units.

A) Average cost method.

The average unit cost is: 252,000-00 / 1,600 = 157-50 rubles

The cost of written-off materials is: 1,200 x 157-50 = 189,000-00 rub.

The balance at the end of the month is: 400 x 157-50 = 63,000-00 rub.

B) FIFO method

Balance at the end of the month: 200 x 130-00 + 200 x 180-00 = 62,000-00 rub.

Cost of written-off materials: 252,000-00 – 62,000-00 = 190,000-00 rub

Average unit cost of scrapped materials:

190,000-00 / 1,200 = 158-33 rubles

Average cost per unit of materials on balance: 62,000-00 / 400 = 155-00 rub.

B) LIFO method

Balance at the end of the month: 300 x 110-00 + 100 x 170-00 = 50,000-00 rub.

Cost of written-off materials: 252,000-00 – 50,000-00 = 202,000-00 rub

Average cost per unit of written-off materials: 202,000-00 / 1,200 = 168-33 rubles

Average cost per unit of materials on balance: 50,000-00 / 400 = 125-00 rub

Let's combine the results into a table.

Index	Average cost method	FIFO method	LIFO method
Cost of scrapped materials	189 000-00	190 000-00	202 000-00
Average unit cost of scrapped materials	157-50	158-33	168-33
Balance at the end of the month	63 000-00	62 000-00	50 000-00
Average cost per unit of materials on balance	157-50	155-00	125-00

As we can see, in the conditions of this example, all three methods give similar results, and when using the average cost and FIFO methods, the obtained values are almost the same. Depending on price movements, there may be situations where average cost and LIFO, or FIFO and LIFO, or all three methods will produce the same results.

1.3.6. Documentation and operational accounting of the movement of inventories

Materials are stored in a warehouse under the responsibility of the storekeeper, with whom an agreement on full financial responsibility has been concluded.

At the buyer's warehouse, the storekeeper checks, weighs and recalculates the accepted values. For the actual quantity of materials received, the storekeeper draws up a receipt order (single-line, multi-line).

If there is a shortage of material, an acceptance report is drawn up. A commission is created to draw up the act. It should include a representative of the supplier, transport organizations or a third disinterested party.

If a shortage is detected due to the fault of the supplier or transport organization, this act is the basis for filing a claim.

Reception of valuables by the storekeeper can be carried out from the forwarder (an employee of this enterprise) or from a representative of the supplier. The forwarder is first issued a power of attorney, according to which he receives the goods at the supplier’s warehouse or from the transport organization.

The materials received according to receipt orders or acts are reflected by the storekeeper in the warehouse accounting card. The warehouse accounting card is a register of analytical accounting of production inventories. A separate card is created for each individual type, brand, and standard size of material.

The card is issued by the accountant of the material department and transferred to the warehouse by the storekeeper. Entries in the card are made on the basis of primary documents. According to the received values, their quantity is reflected in the receipt column and the balance is immediately displayed on this line.

Materials stored in the warehouse are constantly released for production and other needs of the enterprise. Each issue transaction must be recorded in the primary document.

There are two main types of consumable documents: requirement, limit and intake card.

The requirement is used to formalize a one-time issue of materials, most often auxiliary materials, as well as spare parts. Requests can be single-line or multi-line. The requirements are written out by the workshop in two copies. Then they are checked in the supply department in order to clarify the item number. When releasing, the storekeeper reflects in two copies of the request the actual quantity of goods released. One copy of the requirement remains with the storekeeper, and the other with the workshop representative.

A limit-taking card is used for repeated supply of the same material within a month. It is issued by the planning department before the beginning of the month in two copies for the workshop and warehouse. Based on the production program, it determines the monthly limit for the supply or collection of materials. Each vacation transaction is recorded in two copies of the card and the remaining limit is immediately noted. The convenience of limit-receipt cards is that the number of consumable documents issued is reduced and the actual issue of materials is controlled.

If various types of deviations occur during the release of materials (replacement of one material with another, over-limit release to eliminate accidents), then a “signal” request is issued with a visa for the chief engineer.

The release of materials to third parties in the order of sale is reflected in invoices, which are issued by the sales department. The invoice is issued in three, four or five copies, two of which remain at the enterprise: one with the storekeeper, and the second at the checkpoint.

The warehouse accounting card is a register of analytical accounting of materials; it can be maintained by the storekeeper only in quantitative or quantitative-total terms. The cards are used to create a card index, which is kept in the warehouse by the storekeeper.

Every day or at a frequency established in the organization, the storekeeper submits to the accounting department for verification all primary documents that justify his actions with materials, as well as a register of documents.

At the end of the month, the storekeeper fills out a balance sheet; quantitative balances from warehouse cards are entered into it for each type and standard size of materials (that is, for each item number).

The balance sheet is created for a year and is filled out once a month. If the warehouse keeps records in quantitative and cost terms, then instead of a balance sheet, the storekeeper fills out a turnover sheet. The balance sheet is transferred to the accountant of the material department for control.

The method for assessing the disposal of inventories (IP) of an organization is one of its elements. About cost calculation MPZ method We talked about FIFO in ours. However, the most common way to evaluate the disposal of inventories is based on average cost. This method can be used both in accounting and tax accounting (clause 4 PBU 1/2008, clause 16 PBU 5/01, clause 8 article 254, clause 3 clause 1 article 268, clause 2 Clause 2 of Article 346.17 of the Tax Code of the Russian Federation).

Let us give an example of calculation for the average cost method in our material.

Formula for calculating the average cost of materials and goods

Calculation of the average cost of goods or materials for a month involves dividing the total cost of a group (type) of inventory by their quantity, which is the sum of, respectively, the cost and the amount of balance at the beginning of the month and the inventory received during a given month (clause 18 of PBU 5/01).

In this case, the average cost can be calculated in two versions (clause 78 of Order of the Ministry of Finance dated December 28, 2001 No. 119n):

weighted average score;
rolling estimate.

A weighted assessment involves finding the average cost for the month based on the quantity and cost of materials at the beginning of the month and all receipts for the month.

And with a moving average, calculations are made for each moment of disposal of inventories. Accordingly, the moving average value is calculated based on the quantity and cost of inventories at the beginning of the month and the receipt of inventories until the moment of release.

Let us give an example of calculating the weighted average estimate of inventory disposal using conventional digital data.

Based on the balance of inventories as of 03/01/2018 and receipts from three batches for March, the average cost per unit of inventories is 55.9 rubles/piece. (RUB 18,831.3 / 337 pcs.).

Accordingly, the cost of disposal is 216 units. Inventory for March 2018 is 12,074.4 rubles. (216 pcs. * 55.9 rub./pc.). Therefore, the cost of the balance is 121 units. Inventory as of March 31, 2018 is RUB 6,756.9. (RUB 18,831.3 - RUB 12,074.4).

A trading company turned to the Russian Ministry of Finance with a question: how is purchased goods assessed at average cost for profit tax purposes? The financiers gave their recommendations on this matter in a letter dated August 11, 2015 No. 03-03-06/2/46207.

The Tax Code of the Russian Federation contains only general rules

When selling purchased goods, the organization has the right to reduce income from such operations by the cost of purchasing these goods (subclause 3, clause 1, article 268 of the Tax Code of the Russian Federation). It can be determined by one of the following methods for valuing purchased goods:

at the cost of the first in time of acquisition (FIFO);

or at average cost;

or by unit cost.

Recall that the system tax accounting is organized by the company independently based on the principle of consistency in the application of tax accounting norms and rules (Article 313 of the Tax Code of the Russian Federation). The procedure for maintaining tax accounting must be established in the accounting policy of the organization.

Therefore, the company has the right to independently choose a method for valuing purchased goods when selling them, including the method for valuing purchased goods at average cost. The main thing is that such a procedure is provided for by the accounting policy.

Accounting contains specifics

In the commented letter, specialists from the Russian Ministry of Finance, citing the general norms of the Tax Code of the Russian Federation, came to the following conclusion. Since for tax accounting purposes there are no rules for valuing purchased goods at average cost, the procedure for such evaluation can be used based on accounting rules.

In accounting, the average cost valuation method is used to evaluate both inventories and goods (clause 18 of PBU 5/01 “Accounting for inventories”, clause 2 of the Methodological Recommendations for Accounting for Inventory and Inventory, approved by Order of the Ministry of Finance of the Russian Federation dated December 28, 2001 No. 119n, hereinafter - Methodological recommendations).

Note that the method of valuing purchased goods at average cost is more profitable to choose for companies with a large turnover of goods. This is what it is. Write-off (issue) of goods when assessed at average cost is carried out for each group (type) of goods. In this case, the average cost is calculated as the quotient of dividing the total cost of a group (type) of goods by their quantity, which is the sum of the cost and quantity, respectively, for the balance at the beginning of the month and for goods received in this month (clause 75 of the Methodological Recommendations).

Valuation of goods at average cost in accordance with clause 78 of the Methodological Recommendations can be carried out in two ways.

Weighted score

With this option, the assessment is based on the average monthly actual cost. In this case, the calculation includes the quantity and cost of materials at the beginning of the month and all receipts for the month (reporting period).

Example 1

The organization is engaged wholesale office furniture. According to the delivery agreement, it must supply 30 racks in August. In the organization's accounting, the option of weighted valuation of goods is used by the write-off method at average cost.

The average cost at which the racks will be written off as expenses when they are sold in August will be 9,383.33 rubles. per rack: [(160,000 rub. + 42,500 rub. + 79,000 rub.) : (20 racks + 10 racks)].

Rolling estimate

In this case, goods are valued by determining the actual cost of the material at the time of issue. When using this option, the calculation of the average estimate includes the quantity and cost of materials at the beginning of the month and all receipts until the date of issue.

Example 2

The organization is engaged in the wholesale sale of office furniture. According to the delivery agreement, it must supply 30 racks in August. Delivery must be carried out in separate batches no later than five calendar days from the date of transfer of the advance payment for the delivery of each batch of racks. In the accounting of an organization, a sliding valuation of goods is used using the write-off method at average cost.

As of August 1, 2015, there were 20 unsold racks in the warehouse worth RUB 160,000. (20 racks x RUB 8,000/piece).

The organization acquired for subsequent sale:

For the delivery of each batch of goods, the organization received advance payment on August 1, August 10 and August 15.

The organization supplied:

August 4 - ten racks. The average cost at which the racks will be written off as expenses will be 8,000 rubles/piece. (RUB 160,000: : 20 racks). The total cost of sold racks will be 80,000 rubles. (8000 rub. x 10 racks);

August 12 - ten racks. The average cost at which the racks will be written off as expenses will be RUB 10,125/piece. [(160,000 rub. + + 42,500 rub.) : (10 racks + 10 racks)]. The total cost of sold racks will be 101,250 rubles. (RUB 10,125 x 10 racks);

August 19 - ten racks. The average cost at which the racks will be written off as expenses will be RUB 9,383.33/piece. [(160,000 rub. + + 42,500 rub. + 79,000 rub.): (10 racks + 10 racks + 10 racks)]. The total cost of sold racks will be 93,833.3 rubles. (RUB 9,383.33 x 10 racks).

Note that using the sliding assessment option is more labor-intensive compared to using the weighted assessment option. This is due to the fact that the assessment of goods during the month occurs at the time of each sale of goods (batch of goods), and not at the end of the month.