Under standard business accounting practices, ledger and tax accounts are managed differently. In tax accounting, only a portion of standard expenses is taxed during any particular tax period because of the limits of the established norm. The remaining portion is taxed in tax accounting in future periods. In cost accounting, however, standard expenses are applied to the account in full during the period in which they arise.
You can introduce representative expenses as place-holders for standard expenses. Representative expenses are written off for the tax period in an amount not to exceed 4 percent of company payroll expenses for that tax period.
Because accounting norms and standard expense calculation algorithms are variable, you can generally apply a flexible calculation method when defining their values.
A calculation method could include one or more sequential calculations. A calculation sequence consists of counters that perform mathematical and logical operations on register lines. The subtotals and final calculation results are recorded into tax registers or deferral cards.
Standard expenses are handled in the following registers:
Standard expenses rate for current period – This register contains the results of norm calculations for the current period. Expenses are taxed in the current period tax account in accordance with these norms.
Standard expenses rate for deferred periods – This register contains the corresponding results of norm calculations for future periods. The future period norm is adjusted above the current period norm, and forms a deferred expense.
Standard expenses in current period – This register reflects information about current expenses, their standard portion, and their above-norm portion.