How to register a land plot in accounting

<ol style ="text-align: left;">
<li><a href ="#one">Features of the procedure</ a></ li>
<li><a href ="# 2">In what account is the land taken into account: accounting of the value of land plots on the balance sheet</ a></ li>
<li><a href ="# 3">Revaluation rules in accounting</ a></ li>
<li><a href ="#four">Acceptance of a land plot in accounting: postings</ a></ li>
<li><a href ="#five">Disposal</ a></ li>
<li><a href ="# 6">Acquisition of ownership</ a></ li>
<li><a href ="# 7">Lease relationship</ a></ li>
<li><a href ="#eight">Free urgent use</ a></ li>
<li><a href ="#nine">OSNO: taxes on income</ a></ li>
<li><a href ="#10">Features of concluding a lease agreement</ a></ li>
<li><a href ="#eleven">Purchase and rent</ a></ li>
<li><a href ="#12">OSNO: Value Added Tax</ a></ li>
<li><a href ="#13">Documentary registration of operations: reflection of the land plot in accounting and tax accounting</ a></ li>
<li><a href ="#fourteen">Let’s summarize</ a></ li>
</ ol>
<p>
How to record and reflect a land plot in accounting? Since real estate can appear in documents as an object that is bought and sold, the current tax legislation presupposes special methods of its posting and displaying on the balance sheet of an enterprise. Further, we analyze all the subtleties and nuances, conduct a detailed consultation for future accountants.
</ p>
<p>
<img width ="800" alt ="accounting of a land plot in accounting" src ="/blog_files/iblock/005/RgXIX4qgLRw.jpg" height ="600" title ="Source: the official website of Andrey Chance s-stroit.ru"><br>
</ p>
<a name ="one"><h2>Features of the procedure</ h2></ a>
<p>
Land is the original source, and therefore it remains one of the key problems of revolutionary and reformatory activity in both the economic and political spheres. For example, in the context of the implementation of land and property reforms carried out in our country since the beginning of the nineties, the monopoly of state property was eliminated, and paid land use was implemented. However, despite the opportunities that have opened up, the change in the nature and content of property relations has created serious difficulties in various spheres of public life. Actually, this provoked the need to display memory as accounting objects.
</ p>
<p>
For the correct formulation of accounting, it is important to understand what the incoming goal is. If you turn to GOST 26640-85, you can find that the term “land” is interpreted as the most important part of nature, which is the main means of production in agriculture and forestry, as well as the spatial basis on which all national enterprises and organizations are located..
</ p>
<p>
It is important to understand that land plots are endowed with not only economic, but also legal essence. It is the latter that is the defining starting point for accounting regulation. In addition, storage facilities are heterogeneous, that is, they consist of different types and categories of land that have specific properties, are suitable for specific purposes.
</ p>
<p>
The accountant must take into account that the natural qualities of the land are diverse, in different industrial sectors they are characterized by certain specifics. In agriculture, they do play the role of a key production factor, since all industrial processes are directly related to fertility. This circumstance determines the multiplicity of approaches to the study, accounting and posting of memory in different spheres of the national economy..
</ p>
<p>
To further investigate the problem, it is necessary to determine the key purpose of accounting. In our opinion, this is the provision of objective information about the land, which allows you to meet credit and investment needs, to make adequate management decisions..
</ p>
<p>
As for the tasks, here we can highlight:
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<ul>
<li>
<p>
ensuring clear documentation;
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</ li>
<li>
<p>
timely display of all operations performed on the relevant accounts;
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<li>
<p>
creation of an information base for systematic control;
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<li>
<p>
filling out reports;
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</ li>
<li>
<p>
timeliness and correctness of payment of taxes.
</ p>
</ li>
</ ul>
<p>
Note that the procedure for concluding land and property transactions-postings is controlled by the Civil Code of the Russian Federation, in particular, the provisions of Chapter 17. To become the legal owner of land, you must draw up a purchase and sale agreement (mandatory in writing and in accordance with the established norms and requirements) … It is not required to certify it with a notary.
</ p>
<p>
Important: only the territory that previously passed the procedure of state cadastral registration can become the object of the transaction..
</ p>
<p>
According to the basic rules of accounting, memory is classified as fixed assets (OS). However, in order for the site to be capitalized, the following conditions must be met:
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<ul>
<li>
<p>
it must be used in accordance with the activities of the enterprise or leased;
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<li>
<p>
term of use – more than 12 months;
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<li>
<p>
resale is not planned (otherwise the area is required to be reflected in the miscalculation 41);
</ p>
</ li>
<li>
<p>
the acquired territory will generate income.
</ p>
</ li>
</ ul>
<p>
The memory is taken at the initial price, which is formed on the basis of actual costs.
</ p>
<a name ="2"><h3>In what account is the land taken into account: accounting of the value of land plots on the balance sheet</ h3></ a> <br>
<img width ="800" alt ="land registration" src ="/blog_files/iblock/005/9Z3APqO88pc.jpg" height ="600" title ="Source: the official website of Andrey Chance s-stroit.ru"><br>
<p>
As mentioned above, the accounting procedure is determined by the objectives of the acquisition and use of the land plot..
</ p>
<p>
So, for example, if the territory was bought to solve production problems (construction of a workshop, construction of utility rooms, etc.), then it will be reflected on the balance sheet as a fixed asset (OS) – 01.
</ p>
<p>
If the allotment was purchased for subsequent resale, then it should be recorded on account 41 – as a product.
</ p>
<p>
As for the price at which the site must be capitalized, it is determined based on the amount of real costs incurred by the party. It is noteworthy that the fees and payments for registration of ownership are also considered.
</ p>
<a name ="3"><h3>Revaluation rules in accounting</ h3></ a>
<p>
If it was decided to capitalize the site as a fixed asset, then the company is obliged to regularly carry out the procedure for recalculating its market value. In practice, this is done every year for all lands previously accepted on the balance sheet..
</ p>
<p>
Interestingly, the revaluation does not necessarily lead to a decrease in the price of the storage device. With an unstable situation in the real estate market, it can provoke growth.
</ p>
<p>
If the allotment was capitalized as an inventory, the organization is required to test it for impairment. If necessary, a special reserve should be formed. To create it, correlate the difference by which the accounting amount for land exceeds its current average market value. Here account 59 is connected – “Provisions for depreciation of financial investments”.
</ p>
<p>
Correct valuation is one of the key challenges. With regard to land, they are reflected in natural measuring units – hectares. Additional capital investments – in monetary terms.
</ p>
<a name ="four"><h3>Acceptance of a land plot in accounting: postings</ h3></ a> <br>
<br>
<p>
We figured out the theory, now let’s move on to practice. Below you will find the most frequently encountered records that are produced by an accountant-calculator when registering an area as a fixed asset..
</ p>
<table>
<colgroup> <col> <col> <col> </ colgroup>
<tbody>
<tr>
<td>
<p>
Operation
</ p>
</ td>
<td>
<p>
Debit
</ p>
</ td>
<td>
<p>
Credit
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Display purchase. The transaction shows both the acquisition of the site and the subsequent settlements with suppliers and contractors.
</ p>
</ td>
<td>
<p>
08/1
</ p>
</ td>
<td>
<p>
60
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Reflection of information, consulting and other related costs, which, in one way or another, are associated with the purchase.
</ p>
</ td>
<td>
<p>
08/1
</ p>
</ td>
<td>
<p>
60, 76
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Accounting for state registration fees
</ p>
</ td>
<td>
<p>
08/1
</ p>
</ td>
<td>
<p>
76
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Displaying the acceptance of land for accounting as a fixed asset
</ p>
</ td>
<td>
<p>
01
</ p>
</ td>
<td>
<p>
08/1
</ p>
</ td>
</ tr>
</ tbody>
</ table>
<p>
It is important to understand that land is not subject to depreciation, therefore, over time, their consumer properties cannot be changed..
</ p>
<p>
Note that if the memory was accepted on the balance sheet as part of inventories, then instead of 08/1 accounts 41 will appear. This information is enough to carry out the posting and postings, how to put the land plot on the accounting records.
</ p>
<a name ="five"><h3>Disposal</ h3></ a>
<p>
For the sake of fairness, it is worth noting that plots can not only be credited to the balance of the enterprise, but also written off from it. The accounting procedure for the sale of territory is also determined by how exactly it appeared in the invoices – as a commodity or as a fixed asset. In the first case, material costs will be attributed to other income and expenses, in the second – to losses and acquisitions from ordinary activities.
</ p>
<table>
<colgroup> <col> <col> <col> </ colgroup>
<tbody>
<tr>
<td>
<p>
Operation
</ p>
</ td>
<td>
<p>
Debit
</ p>
</ td>
<td>
<p>
Credit
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Reflection of the receipt of profit from the sale of the site, which was accounted for as fixed assets. Settlements with customer-buyers are also made here..
</ p>
</ td>
<td>
<p>
62
</ p>
</ td>
<td>
<p>
91
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Reflection of the receipt of income from the sale of the storage device, which was capitalized as goods.
</ p>
</ td>
<td>
<p>
62
</ p>
</ td>
<td>
<p>
90
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Write-off of the book value of fixed assets.
</ p>
</ td>
<td>
<p>
91
</ p>
</ td>
<td>
<p>
01
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Deduction of the amount of the parcel-item.
</ p>
</ td>
<td>
<p>
90
</ p>
</ td>
<td>
<p>
41
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Demonstration of expenses accompanying the process of selling allotments from the OS category.
</ p>
</ td>
<td>
<p>
91
</ p>
</ td>
<td>
<p>
60/70/76
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Reflection of the costs incurred by the organization in the sale of the goods site.
</ p>
</ td>
<td>
<p>
44
</ p>
</ td>
<td>
<p>
60/70/76
</ p>
</ td>
</ tr>
<tr>
<td>
<p>
Write-off of funds.
</ p>
</ td>
<td>
<p>
90
</ p>
</ td>
<td>
<p>
44
</ p>
</ td>
</ tr>
</ tbody>
</ table>
<p>
Important addition: the sale of land is not subject to value added tax.
</ p>
<a name ="6"><h3>Acquisition of ownership</ h3></ a>
<p>
Above, we discussed in detail how to accept land plots in accounting. Now we will consider the features of the process of their registration, from a legal point of view..
</ p>
<p>
The current legislation provides for several ways to obtain ownership of the storage device:
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<ul>
<li>
<p>
through purchase under a sales and purchase agreement;
</ p>
</ li>
<li>
<p>
by means of a barter agreement;
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</ li>
<li>
<p>
on the basis of the share (authorized) capital;
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</ li>
<li>
<p>
by granting.
</ p>
</ li>
</ ul>
<p>
It is worth noting that only those territories that have passed the cadastral registration procedure and have received all supporting documents can become the objects of the transaction..
</ p>
<p>
The official owner of the storage device has the right to dispose of it in accordance with the type of permitted use (it is registered in the State Real Estate Cadastre). Each territorial zone has its own rules and regulations.
</ p>
<a name ="7"><h3>Lease relationship</ h3></ a>
<p>
The Land Code of the Russian Federation, in particular, its article 22, regulates the procedure for transferring land plots for lease. According to the main provisions of the document, the developer has the right to receive the territory based on:
</ p>
<ul>
<li>
<p>
conclusion of an agreement (it is signed directly with the owner);
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</ li>
<li>
<p>
concessions to the primary lessor.
</ p>
</ li>
</ ul>
<p>
Both conditions are valid for state, municipal and private property..
</ p>
<p>
The standard term for an agreement is one year. The procedure is subject to compulsory state registration, which involves the payment of a state fee (today its size is 15 thousand rubles).
</ p>
<p>
Documenting and displaying on the balance sheet of receiving a credit card on lease conditions is exactly the same as with any other property. Associated expenses are included in the cost of construction work, are carried out on account 08.
</ p>
<a name ="eight"><h3>Free urgent use</ h3></ a> <br>
<img width ="800" alt ="accounting areas in accounting" src ="/blog_files/iblock/005/BQ11pPjOkrc.jpg" height ="600" title ="Source: the official website of Andrey Chance s-stroit.ru"><br>
<p>
According to Article 24 of the Land Code, land can be transferred for use free of charge..
</ p>
<p>
As practice shows, such operations are resorted to for:
</ p>
<ul>
<li>
<p>
construction of infrastructure facilities;
</ p>
</ li>
<li>
<p>
construction of residential buildings;
</ p>
</ li>
<li>
<p>
creation of real estate at the expense of budgetary funds issued under municipal contracts.
</ p>
</ li>
</ ul>
<p>
In all cases when the right to use exceeds one year, transactions are subject to mandatory state registration. Postings in accounting programs are displayed according to a standard uniform algorithm.
</ p>
<a name ="nine"><h3>OSNO: taxes on income</ h3></ a>
<p>
Despite the fact that plots are most often referred to as fixed assets, they are not recognized as amortized savings. An appropriate fee is paid for state registration.
</ p>
<p>
As for the property tax, it is not paid from the memory, since they are not objects of taxation. The only payment that must be made by owners and owners of territories is land. It is noteworthy that a change in the cadastral value does not entail a change in the tax calculation..
</ p>
<p>
The amount of costs for the purchase or sale of land depends on:
</ p>
<ul>
<li>
<p>
the right to sign a lease (for example, is the storage facility considered municipal property);
</ p>
</ li>
<li>
<p>
acquisition procedures.
</ p>
</ li>
</ ul>
<p>
These are the only factors that matter.
</ p>
<a name ="10"><h3>Features of concluding a lease agreement</ h3></ a>
<p>
The Tax Code of the Russian Federation deals with the regulation of all issues related to the recognition of expenses for the purchase of a lessor’s right. To launch the appropriate process, an enterprise must select and fix in its accounting policy one of two possible options for taxation purposes. This is where Article 264.1 comes into force.
</ p>
<p>
If the lease agreement is concluded for a period not exceeding one calendar year, then state registration is not required. All costs are posted evenly throughout the entire period of use.
</ p>
<a name ="eleven"><h3>Purchase and rent</ h3></ a>
<p>
For some types of real estate, special tax rules apply. So, for example, if the land was rented from the state / municipal owner not earlier than January 1, 2007 and not later than December 31, 2011, then the recovered profit is accounted for in a special procedure..
</ p>
<a name ="12"><h3>OSNO: Value Added Tax</ h3></ a>
<p>
If you purchased an allotment, then you are not required to pay input VAT, as this practice is not subject to payments. If the territory is leased, and the lessor is a VAT payer, then the use of the area will require paying tax as usual. In this case, the tenant receives an invoice, enters it in the purchase book, and then takes the amount deducted.
</ p>
<a name ="13"><h2>Documentation of operations: reflection of the land plot in accounting and tax accounting</ h2></ a><img width ="800" alt ="reflection in the accounting of the land plot" src ="/blog_files/iblock/005/AqkJs1YRiVo.jpg" height ="600" title ="Source: the official website of Andrey Chance s-stroit.ru">
<p>
Any manipulations with real estate are carried out exclusively upon drawing up the corresponding agreement in writing. In this case, the parties sign three copies, each of which is notarized. All parties to the transaction receive their contractual copy, and the latter is given to Rosreestr.
</ p>
<p>
Crediting to the balance sheet is carried out only after the actual transfer of land by means of a special act of acceptance.
</ p>
<a name ="fourteen"><h2>Let’s summarize</ h2></ a>
<p>
Summarizing all of the above, we can conclude that the territory itself is the original source of any wealth. However, today it is customary to talk about widespread negative trends in the deterioration of its condition, growth in the area of ​​deposits. In the conditions described, the importance of correct and high-quality accounting is especially pronounced. Since BU is perceived by modern economists as one of the key means of ensuring information security and control over the safety of resources, the fate of a particular enterprise largely depends on the peculiarities of its conduct..
</ p>
<p>
Accounting is a prerequisite for the successful implementation of the general mission of land reform.
</ p>
<p>
What a competent accountant should not forget:
</ p>
<ul>
<li>
<p>
According to international standards, plots are classified as agriculture, accounted for as fixed assets if used for production.
</ p>
</ li>
<li>
<p>
In accordance with the reforms carried out, land is an investment if it is intended for investment in real estate.
</ p>
</ li>
<li>
<p>
Even being occupied by buildings, the territory is displayed separately. Special wiring is applied to it.
</ p>
</ li>
</ ul>
<p>
Now you know on which account to account for a land plot in accounting. We hope that the material reviewed will be useful for you, will help you understand the clerical, economic and tax intricacies..
</ p>
(*) This information is not an official recommendation and is taken from open sources. The material in this article is not intended to provide guidance on the legal rules for land, property, erection and wall decoration, or construction. The manufacturer is not responsible for legal advice, as well as defects in the structure or its elements, arising during or after completion of construction work on the basis of this information. To carry out such work, use the services of certified specialists in the field of jurisprudence and construction.<br>

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