Legal Entity-commitent reflects the following assets on sub-account 283 “Goods on commission” when foods transferring on the commission under commission contracts and other civil contracts, which do not provide for the transfer of ownership of the goods before their sale.
The reason for this is interpretation of sub-account use in Regulation on the Application of Chart of Accounts for assets, capital, liabilities and business transactions of enterprises and organizations, approved by the Ministry of Finance of Ukraine of 30.11.1999, № 291.
Analytical accounting of transactions on the transfer of goods on commission should be maintained by type of goods and commission agents.
Let us recall, commitent, who transferred goods for sale to the commission agent, reserves the ownership right of the goods (by the time of ownership transfer – their sale to the customers). The commitent should recognize the income and reflect the cost of goods sold just after the goods sale by the commission agent (it becomes known about the sale on the basis of the report of the commission agent).
When recognition of income from the sale, its amount should be reflected under the credit of sub-account 702 “Revenue from sales of goods” in correspondence with sub-account 377 “Calculations with other debtors” (under which the debt from the revenue, to be transferred, of the commission agent should be reflected).
But the cost price should be included in expenditures under debit conduction of subaccount 902 “Cost of goods sold” credit of sub-account 283 “Goods on commission”.
Sometimes the commission contract provides for that the commission agent also should supply additional services, which are to be compensated at the expense of commitent. Such expenses are showed in the debit account 93 “Marketing expenses”. Commission remuneration, which is accrued and paid to the commission agent in the future, should be indicated in this account. Accordingly the following would be conducted: Dr 93 Kr 631 “Calculations with domestic suppliers” and Dr 631 Kr 311 “Current accounts in national currency” (301 “Cash in the national currency”).
