ORDER OF THE MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION

of November 19, 2002 No. 115n

About approval of the Accounting regulation "The Expense Accounting for Research, Developmental and Technological Works" PBU 17/02

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 No. 283 (The Russian Federation Code, 1998, to No. 11, of the Art. 1290), I order:

1. Approve the enclosed Accounting regulation "The Expense Accounting for Research, Developmental and Technological Works" PBU 17/02.

2. Enact this order since January 1, 2003.

Approved by the Order of the Ministry of Finance of the Russian Federation of November 19, 2002 No. 115n

Accounting regulation "The Expense Accounting for Research, Developmental and Technological Works" PBU 17/02

I. General provisions

1. This Provision establishes rules of forming in financial accounting and accounting records of the commercial organizations, being legal entities by the legislation of the Russian Federation (except for credit institutions) expense informations, the research, developmental and technological works connected with accomplishment.

This Provision is applied by the organizations which perform research, developmental and technological works with own forces or (and) are customers of the specified works on the agreement.

2. This Provision is applied concerning research *, developmental and technological works:

on which the results which are subject to legal protection, but are not drawn up in the procedure established by the legislation are received;

on which the results which are not subject to legal protection according to regulations of the current legislation are received.

3. This Provision is not applied to unfinished research, developmental and technological works, and also to research, developmental and technological works which results are considered in financial accounting as intangible assets.

4. This Provision is not applied to expenses of the organization on exploitation of natural resources (carrying out geological studying of subsoil, investigation (additional exploration) the developed fields, works of preparatory nature in the extracting industries, etc.), costs for preparation and development of production, the new organizations, shops, aggregates (starting expenses), costs for preparation and development of production, not intended for serial and mass production, and also the costs connected with enhancement of technology and production organization, with product quality improvement, change of design of products and other operational properties performed during production (technological) process.

5. Expense information on research, developmental and technological works is reflected in financial accounting as investments in non-current assets.

Analytics of expenses on research, developmental and technological works are conducted separately on work types, agreements (orders).

6. Unit of financial accounting of expenses on research, developmental and technological works is inventory object.

Inventory object for the purposes of this provision set of expenses on the performed work which results are independently used in production (performance of works, rendering services) or for managerial needs of the organization is considered.

II. Recognition of expenses on research, developmental and technological works

7. Expenses on research, developmental and technological works are recognized financial accounting in the presence of the following conditions:

the expense amount can be determined and confirmed;

there is documentary confirmation of performance of works (the acceptance act of the performed works, etc.);

use of results of works for production and (or) managerial needs will lead to receipt of future economic benefits (income);

use of results of research, developmental and technological works can be shown.

In case of failure to carry out at least of one of the above-stated conditions the expenses of the organization connected with accomplishment of research, developmental and technological works are recognized other expenses of the accounting period.

Also expenses on research, developmental and technological works which did not yield positive result are recognized other expenses of the accounting period.

8. If expenses on research, developmental and technological works in the previous accounting periods were recognized as other expenses, then they cannot be acknowledged as non-current assets in the subsequent accounting periods.

III. Structure of expenses on research, developmental and technological works

9. All actual expenses connected with accomplishment of the specified works belong to expenses on research, developmental and technological works.

In case of accomplishment of research, developmental and technological works join in structure of expenses:

the cost of inventory stocks and services of the third parties and persons used in case of accomplishment of the specified works;

costs for the salary and other payments to workers directly busy in case of accomplishment of the specified works on the employment contract;

assignments on social needs (including unified social tax);

the cost of special equipment and the special equipment, held for use as objects of testing and researches;

depreciation of the fixed asset objects and intangible assets used in case of accomplishment of the specified works;

charges and operation of the research equipment, installations and constructions, other fixed asset objects and other property;

general running costs if they are directly connected with accomplishment of these works;

the other expenses which are directly connected with accomplishment of research, developmental and technological works including expenses on carrying out testing.

IV. Write-off of expenses on research, developmental and technological works

10. Expenses on research, developmental and technological works are subject to write-off on expenses on regular types of activity from the 1st of the following after month in which the actual use of the received results from accomplishment of the specified works in production (performance of works, rendering services), or for managerial needs of the organization was begun.

11. Write-off of expenses on each performed research, developmental, technological work is made by one of the following methods:

linear method;

method of write-off of expenses it is pro rata to products amount (works, services).

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