What is the New Year without gifts? They are eagerly awaited by adults and even more eagerly children. Many organizations present gifts to children of employees. How to document and record it in the accounting – below.
Recording
To presents gifts to the children of employees, the employer who has decided to became Santa Claus must record the gift. To do this, it is necessary to issue an order (regulation) for presenting gifts to the New Year holidays. It is better to indicate the employees of the enterprise (one of the parents of the child) as the recipients of the gifts, and not the child. The fact is that, depending on who is indicated in the order as the recipient of the gift, he will act as the recipient of the gift income. Therefore, the data of such person (identification number) should be reflected in the report informing tax officials about the payment of income to individuals (in the Tax calculation of the amount of income accrued (paid) in favor of individuals, and the amounts of tax withheld from them, hereinafter – Tax calculation, form No. 1ДФ).
So, for example, if the order states that Christmas gifts are handed over to the children of employees and their names are indicated, then the children will be the recipients of the gift income. Therefore, in order to reflect the issuance of such gifts in Form 1ДФ, the accountant should demand parents to provide the identification numbers of their children. However, not all children have one and the process of obtaining the identification number will take some time and make more trouble. Therefore, it is better to indicate in the order (regulation) that Christmas gifts for children are handed to employees who have children, and to indicate their full names. Therefore, employees of the company will be the recipients of the gift income, and therefore, their data should be reported.
The order (regulation) should also indicate the age limit of the child to whom the gift will be presented. The age of 18 should not be exceeded, since till this age the physical person has the legal status of a child.
Once the order is issued, it is necessary to calculate the number of children to whom they will be presented, and to make and approve estimates for purchase of presents. Then, on the basis of this estimate, allocate the money for the purchase of gifts and give them to the recipients (parents of children) and receive their signature that indicates the receipt of the gifts.
The gifts, which are given to the children of employees, are written off from the balance sheet and included in the expenses on the basis of the act of writing off the children's gifts, also drawn up in an arbitrary form.
Accounting
The accounting of purchased gifts presented to the employees' children must be reflected in subaccount 209 “Other materials”.
When presenting gifts, employees are required to write off their cost from the balance sheet and include the costs of their purchase in other operating expenses (sub-account 949 “Other operating expenses”) on the basis of item 20 of NAS 16 “Expenses”.
With respect to income tax, the object of taxation is the financial result before tax, which is determined by the rules laid down in accounting and adjusted for tax differences.
There is no provision for adjusting the financial result in the Tax Code of Ukraine for the transactions of free transfer of gifts to the children of the employees. Therefore, all income tax payers (both high- and low-income) show these transactions in “profitable” accounting solely under accounting rules.
