Forming reserves in accounting is not an arbitrary decision made by an accountant, but a procedure that must be based on two sources simultaneously: IFRS methodology (for accounting purposes) and the requirements of the Tax Code of the RK (for tax accounting purposes). It is precisely at the intersection of these two systems that most questions about entries and the procedure for creating reserves arise.
How to approach the issue correctly
Before forming entries, it is necessary to determine exactly which reserve is being discussed — a reserve for doubtful claims, a reserve for vacations, a reserve for asset impairment, and so on. The methodology may differ for each type of reserve, so it is important to clearly establish:
- on the basis of which IFRS standard the reserve is created (recognition procedure, measurement, documentary confirmation);
- how this reserve is treated from the point of view of the Tax Code — whether it is recognized as a deduction, whether there are restrictions on the amount or conditions of recognition.
If the accounting methodology (IFRS) and the tax methodology (Tax Code of the RK) diverge — which often happens — this must be reflected through permanent and temporary differences in order to avoid distorting the tax base and to correctly form entries for deferred taxes.
Practical advice
Develop or review the company's accounting policy — it is here that the procedure for creating each type of reserve should be established: recognition criteria, accrual frequency, data sources for calculation, and how the reserve relates to the requirements of the Tax Code of the RK. Without this being established, any entries for reserves will be disputable during an audit.
If your situation involves a specific type of reserve for which exact entries and amounts are needed, it is worth considering it separately — tied to a specific IFRS standard and article of the Tax Code, since there is no universal answer applicable to all reserves.