Economic Sciences/ Accounting and Auditing

Cand.Phil.Sci. Moiseeva F.A., postgraduate Zemeleva T.S.

Donetsk National University of Economics and Trade

named after Michael Tugan-Baranovsky

CLASSIFICATION OF EXPENSES UNDER THE TAX CODE OF UKRAINE

There are a lot of issues concerning the formation of accounting information to the object of taxation, taxable income and in the accounting system with the adoption of the Tax Code of Ukraine. In particular this concerns to the costs.

Problems of classification of costs under the Tax Code of Ukraine and national standards of accounting are studied by our and foreign scientists. So, it is necessary to underline the value of basic researches of the following scientists: Babich V., Beluha M., Golov S., Korniychuk H., Oleinik O., Poddyerohina A., Prokopenko V., Stroich S. etc.. However it should be mentioned, that still there are insufficiently investigated problems of account of expenses and that certainly opens the topicality of choice of a thesis.

In this regard, the purpose of a thesis is to study the differences in the composition of expenses listed in the Tax Code of Ukraine and regulations regarding in the national standards of accounting.

First of all, consider the definition of category "costs". According to the paragraph 14.1.27 of the Tax Code of Ukraine the costs is the amount of any costs of the taxpayer in cash, tangible or intangible, implemented for carrying out business of the taxpayer, resulting in decreasing economic benefits such as disposal of assets or increasing liabilities originated, followed by decreasing of equity capital (excluding changes in capital through its disinvestment or distribution of owner) [1]. The same definition is given in national standard of accounting 3 "The Report on Financial Results" [2]. So the definition of category "costs" is agreed.

In turn, in the Tax Code of Ukraine defined that the costs is composed of operating expenses and other expenses (Fig. 1).

Figure 1 – The structure of costs according to the Tax Code of Ukraine

Thus, operating costs - above all it costs that make the cost of sales of finished products. According to the Code, to the cost includes all costs directly related to the manufacture of such products, [1], whereas in accounting, according to national standard of accounting 16 "The Expences" [3], the production cost also included the variables of total costs and total production costs divided constant (which, according to a new tax accounting should be accounted in the "other expenses"). More features determining the tax cost create the image schematic (Fig. 2).

Figure 2 - Cost price according to the Tax Code of Ukraine

So, we can say that elements of the tax cost of goods sold and purchased similar items from the original definition of value stocks (national standard 9 "Inventory"). In its turn, is the primary feature of the definition cost of goods sold and manufactured (finished products), work performed, services rendered in tax accounting is the lack of total expenses and loss of defective, that a fully rejected for reasons of technological products.

The adoption of the Tax Code of Ukraine has changed the order of recognition of expenses in accounting and tax accounting, which is shown at Figure 3.

Features	Accounting (national standard 16"The Expences"		Tax accounting
	Recognition of costs	Cancellation costs
Cost of goods	Are expensed certain period while the recognition of income for which they were made	At the time of receipt of income from the sale of such products	Are expensed in the period in which income was recognized from the sale of such goods, works, services
Cost of sales (services)
А) Production cost:
- Direct material costs
- Direct labor costs
- Other direct costs
- general production expenses			Other expenses. Are expensed the reporting period in which they are carried out
B) Unallocated fixed costs of total	Costs are recorded within the reporting period in which they were made	Included in cost of sales (services) in the period they arise
Administrative expenses		In the reporting period in which they were made
Selling expense
Other operating expenses
Financial expenses
Other expenses ordinary activities

Figure 3 - Recognition of costs in the accounting and tax accounting

Thus, today there are differences between tax regulations and accounting rules of expenses that leads to tax differences in accounting. The elimination of these differences will positively influence the formation of information about the activities of enterprises.

References

1. Tax Code of Ukraine

1. National standard of accounting 3 "The Report on Financial Results"[Electronic resource]. - Access mode: <//http://pro-u4ot.info>.

2. National standard of accounting 16 "The Expences"[Electronic resource]. - Access mode: <// http://pro-u4ot.info>.