Account 311- Tools and instruments

1. Accounting principles:

a) This account shall be intended for reflecting the existing value of, the increases and decreases in, tools and instruments of microfinance institutions. Tools and instruments recorded in this account are means of labor that do not meet standards regarding value and useful period required for fixed assets;

b) Receipt, dispatch and storage of tools and instruments shall be recorded in the Account 311 according to their historical costs. Principles of determination of historical costs of received tools and instruments which are subject to regulations the same as those set out in the accounting standard of “Inventories” shall be as follows:

Historical costs of purchased tools and instruments are defined as invoiced purchase prices, non-refundable taxes and other costs directly associated with these tools and instruments (if any). The price of a tool or instrument moved out of the warehouse shall be determined according to the specific identification or weighted mean method. Once a costing method is chosen, the microfinance institution must ensure that it is used consistently during the entire accounting period;

c) Microfinance institutions must recognize tools and instruments having minor value that are dispatched from warehouses for commercial uses as administrative expenses in a one-time manner;

d) Microfinance institutions must recognize tools and instruments having major value and associated with business transactions performed in multiple accounting periods on the Account 3813 “Expenses awaiting distribution” and must gradually distribute them into during-period expenses.

2. Structure and entries of the account 311:

Debit side: – Real value of tools and instruments received in warehouses.

– Real value of surplus tools and instruments discovered after stocktaking.

Credit side: – Real value of tools and instruments dispatched from warehouses for use in business transactions.

– Trade discounts obtained upon purchase of tools and instruments.

– Value of tools and instruments returned to or discounted by sellers.

– Value of tools and instruments found missing after stocktaking.

Debit balance: – Real value of tools and instruments currently in stock of a microfinance institution.

Detailed accounting: Accountants may use subaccounts for specific groups or types of tools and instruments.

Article 18. Account 313- Input materials

1. Accounting principles:

a) This account shall be used for reflecting the existing value of, the increases and decreases in, input materials of microfinance institutions. Input materials are objects of labor used in business transactions of microfinance institutions, including printing paper, stationery and office supplies, other cheap and perishable things;

b) Accountants may keep record of receipt, dispatch and storage of tools and instruments in the Account 313 according to their historical costs. Principles of determination of historical costs of received tools and instruments which are subject to regulations the same as those set out in the accounting standards of “Inventories” shall be as follows:

Historical costs of purchased tools and instruments are defined as invoiced purchase prices, non-refundable taxes and other costs directly associated with bought-in materials (if any). The price of input material moved out of the warehouse shall be determined according to the specific identification or weighted mean method. Once a costing method is chosen, the microfinance institution must ensure that it is used consistently during the entire accounting period;

c) Recording of input materials that are not under a microfinance institution’s ownership shall not be allowed, including those of which custody is authorized to the microfinance institution, etc.

2. Structure and entries of the account 313:

Debit side: – Real value of input materials received in warehouses.

– Value of input materials found surplus after stocktaking.

Credit side: – real value of raw or input materials dispatched from warehouses for business uses.

– Value of input materials returned to or discounted by sellers.

– Trade discounts obtained from purchase of input materials.

– Value of input materials found lost after stocktaking.

Debit balance: – Real value of input materials currently in stock of a microfinance institution.

Detailed accounting: Accountants may use subaccounts for specific groups or types of tools and instruments.