With the change and adjustment of accounting standards in recent years, many accounting accounts have also changed accordingly, among which the two accounts of contract liabilities and estimated liabilities are more commonly used. Many financial personnel are often difficult to distinguish between these two concepts in the face of the use of the new standard, and this article will analyze them clearly for everyone at once.
1. Identification of applicable subject business
【Contractual Liabilities】The customer's unused control company grants the customer the responsibility to obtain control of the product from the company in the future and assumes the responsibility of transferring the product to the customer.
Simply put, this is what we often call a small receivable. Unlike accounts receivable in advance, contract liabilities do not include income tax.
The domain model here is that the accounts received in advance, but the accounts received by the products that have not yet been delivered to the service project are recorded in the contract liabilities, and after the delivery of the products to the service project, the contract liabilities are transferred to the main business income.
Expected Liabilities are usually related to contingencies. Simply put, this is what we often call small receivables. The actual accounting treatment mainly includes the following situations:
(1) The expected liabilities caused by product quality assurance shall be debited to the operating expense account and this account according to the clear amount.
(2) During the period of use of fixed capital, the interest expenses that should be stressed in each period are calculated and clarified, and the sales expense account is debited and the account is debited.
(3) The expected liabilities caused by the company's loan guarantee, pending lawsuits, and restructuring liabilities shall be debited to non-operating expenses in accordance with the specified amount.
(4) For market sales with sales return clauses, if a return rate is possible, the Company shall recognize revenue based on the amount of consideration (i.e., excluding the amount returned due to the return due to the sale) and determine the debt-expected liability based on the amount returned due to the return due to the sale.
2. Deferred income tax treatment
【Contract Liabilities】Contract liabilities belong to the liability account, which are compared according to the book value and tax basis, integrate the requirements of tax laws, and determine the harm of deferred income tax.
If the financial accounting does not meet the revenue recognition criteria, the revenue is not recognized, but the income has been legally determined (income tax is paid in the current period), it will result in deferred tax on the property.
【Expected Liabilities】According to the requirements of the Enterprise Income Tax Law, expenses related to business processes should be deducted at the time of occurrence (in the future). Thus, if the book value > the determination of deferred tax property is caused by a temporary difference in tax deductibility.