ORDER OF THE MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION

of May 6, 1999 No. 33n

About approval of the Accounting regulation "Expenses of the Organization" PBU 10/99

In pursuance of the Program of reforming of financial accounting according to international accounting standards approved by the order of the Government of the Russian Federation of March 6, 1998 N 283, I order:

1. Approve the enclosed Accounting regulation "Expenses of the Organization" PBU 10/99.

2. Enact this order since January 1, 2000.

Approved by the Order of the Ministry of Finance of the Russian Federation of May 6, 1999 No. 33n

Accounting regulation "Expenses of the Organization" PBU 10/99

I. General provisions

1. This Provision establishes rules of forming in financial accounting of expense information of the commercial organizations (except credit and insurance companies), being legal entities by the legislation of the Russian Federation.

In relation to this Provision non-profit organizations (except the public (municipal) institutions) recognize expenses on business and other activity.

2. Expenses of the organization reduction of economic benefits as a result of asset retirement (money, other property) and (or) emergence of obligations, leading to capital reduction of this organization except for of reduction of deposits according to the decision of participants (owners of property) is recognized.

3. For the purposes of this provision the asset retirement is not recognized expenses of the organization:

in connection with acquisition (creation) of non-current assets (fixed assets, construction in progress, intangible assets, etc.);

deposits to the authorized (share) capital of other organizations, share acquisition of joint-stock companies and other securities not for the purpose of resale (sale);

under commission agreements, agency and other similar agreements for benefit of the consignor, the principal, etc.;

according to the procedure of advance payment of inventory stocks and other values, works, services;

in the form of advance payments, deposit in payment for inventory stocks and other values, works, services;

in loan repayment, loan, received by the organization.

For the purposes of this provision the asset retirement hereinafter is referred to as as payment.

4. Expenses of the organization depending on their nature, conditions of implementation and activities of the organization are subdivided on:

expenses on regular types of activity;

other expenses;

For the purposes of this provision the expenses other than expenses on regular types of activity, are considered as other expenses.

II. Expenses on regular types of activity

5. Expenses on regular types of activity are the expenses connected with production of products and sale of products, acquisition and sales of goods. Expenses which implementation is connected with performance of works, rendering services are also considered as such expenses.

In the organizations which object of activity is provision for a fee in temporary use (temporary ownership and use) of the assets according to the lease agreement on regular types of activity expenses which implementation is connected with these activities are considered as expenses.

In the organizations which object of activity is provision for a fee of the rights arising from patents for inventions, industrial designs and other types of intellectual property on regular types of activity expenses which implementation is connected with these activities are considered as expenses.

In the organizations which object of activity is participation in the authorized capital of other organizations on regular types of activity expenses which implementation is connected with these activities are considered as expenses.

Expenses which implementation is connected with provision for a fee in temporary use (temporary ownership and use) of the assets, the rights arising from patents for inventions, industrial designs and other types of intellectual property and from participation in the authorized capital of other organizations when it is not object of activity of the organization belong to other expenses.

Expenses on regular types of activity also cost recovery of the fixed assets, intangible assets and other depreciable assets performed in the form of the depreciation charges is considered.

6. Expenses on regular types of activity are accepted to financial accounting in the amount estimated in terms of money, the equal size of payment in cash and other form or size of accounts payable (taking into account Item provisions 3 this provision).

If payment covers only part of the recognized expenses, then the expenses accepted to financial accounting are determined as payment amount and accounts payable (in the part which is not covered with payment).

6.1. The size of payment and (or) accounts payable is determined proceeding from the price and conditions established by the contract between the organization and the supplier (contractor) or other partner. If the price is not provided in the agreement and cannot be established proceeding from terms of the contract, then for determination of size of payment or accounts payable the price by which in comparable circumstances usually the organization determines expenses concerning similar inventory stocks and other values, works, services or provision in temporary use (temporary ownership and use) of similar assets is agreed.

6.2. In case of payment of acquired inventory stocks and other values, works, services on the terms of the commercial credit granted in the form of delay and payment by installments of payment, expenses are accepted to financial accounting in full amount of accounts payable.

6.3. The size of payment and (or) accounts payable is determined by the agreements providing obligation fulfillment (payment) not by money by the cost of goods (values) transferred or which are subject to transfer by the organization. The cost of goods (values) transferred or which are subject to transfer by the organization is established proceeding from the price by which in comparable circumstances usually the organization determines the cost of similar goods (values).

In case of impossibility to establish the cost of goods (values) transferred or which are subject to transfer by the organization the size of payment and (or) accounts payable is determined by the agreements providing obligation fulfillment (payment) not by money by the cost of products (goods) received by the organization. The cost of products (goods) received by the organization is established proceeding from the price at which in comparable circumstances similar products (goods) are acquired.

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