Almost all companies use means of transports in their activities. To be able to perform the assigned functions they must be supplied with all necessary things, and first of all with fuel. How to reflect the fuel transactions in reports?
Subaccount 203 “Fuel”
The purchased fuel for use in company’s activity is accounted as an inventory in subaccount 203 “Fuel”. This subaccount reflects the availability and flow of fuel (petroleum products, solid fuel, lubricating materials) purchased or stored up for process purposes, maintenance of vehicles as well as power production and heating of buildings. This is indicated in the Guideline for application of Plan of accounting of assets, capital, liabilities and business operations of enterprises and organizations, approved by the Ministry of Finance order No. 291 of November 30, 1999.
The input of fuel is reflected on the debit side of the subaccount 203, while the expenses for business and other needs – on the credit side.
Analytical accounting
The analytical accounting on this subaccount is carried out according to fuel types and grade as well as place of its storage. In this regard the indicated subaccount usually has subaccounts of second, third and other order. Moreover, the amount of the analytical subaccounts can vary in different companies and depend on type of the used fuel and its purpose.
Usually the company accounts the fuel by the place of storage and brand. For this purpose, the following analytical accounts are opened: 2031 “Fuel at the bulk plant”, 2032 “Fuel in the tank” etc. In addition, taking into account that the bulk plant can store different types of fuel, the subaccounts can have their own analytical accounts: 20311 “Gasoline A92 at the bulk plant”, 20312 “Diesel fuel at the bulk plant” etc., and subaccount 2032 can have, e.g. such analytical accounts 20321 “Gasoline A92 in the tank”, 20322 “Diesel fuel in the tank”. Moreover, as there can be several machines at the enterprise, the third order subaccounts can be opened indicating specific means of transport with the fuel, namely 203211 “Gasoline A92 in the tank of Audi A6”, 203212 “Gasoline A92 in the tank of GAZ-53” etc.
Cases when fuel is recognized as inventory
The fuel that the supplier delivers to the bulk plant, the enterprise recognizes as inventory, so it is reflected in the accounting as historical cost that consists the material costs listed in i.9 NAS 9 “Inventory”, namely:
- Amounts payed under the agreement to the supplier (seller) excluding indirect taxes;
- Total amount of the import duties;
- Total amount of the indirect taxes with regard to the purchase of inventory that are not indemnified to the enterprise/entity, e.g. excise tax;
- Shipping and handling expenses (expenditures on inventory, freight payment, loading and discharging operations and transportation of inventory by all means of transportation to the place of its usage, including security insurance against transportation risks);
- Other expenses directly relating to purchase of inventory and its adjustment so it can be used for planned purposes.
In case it is impossible to accurately determine the historical cost prior to the inventory (fuel) recognition, such inventory may be evaluated and reflected at fair value that is followed by the adjustment to the historical cost.
Fuel consumption
Regarding the reflection of fuel consumption in the accounting, it is written down from the subaccount 203 after the amount of fuel consumed is determined in the primary document:
1) Within the norm of consumption to the debit side of that type of activity for which the means of transportation which tank was filled with fuel was used. Indeed, if such means was used:
- during the production of one type of products, then the cost of fuel used within the norm of consumption is put in the debit side of subaccount 23 “Production”; if one type of the means of transportation was used for production of several products then its cost is determined as general production expenses and put in the debit side of the subaccount 91 “General production expenses”, and then at the end of the month after allocation the fuel cost is determined as expenses on specific type of product, i.e. put in the debit of subaccount 23 “Production”;
- for products sale (products delivery to the clients), then the cost of fuel used is determined as the sales expenses and put in the debit side of subaccount 93 “Sales expenses”;
- for administration purposes (fueling cars of directors and managers), then the fuel cost used by such vehicle is put in the debit side of subaccount 92 “Administrative cost”;
- during the construction of new fixed asset, then its cost is put in subaccount 15 “Capital investment” etc;
2) beyond the norm of consumption, i.e. overrun, then they should be determined as other operational expenses and is put in subaccount 947 “Deficiencies and losses resulting from spoilage of values”.
