Appendix No. 1. Procedure for writing off costs for unfinished construction projects
Appendix No. 1 to the Resolution of the Administration of the Municipal Municipality "Syktyvkar" dated July 23, 2021 No. 7/2212
General provisions
1.4. The decision to write off costs for an unfinished construction project is made in relation to an unfinished construction project that meets at least one of the following requirements (criteria):
a) construction of an unfinished construction project was stopped more than 5 years ago and there is no feasibility for its further use;
b) the unfinished construction project is not the subject of existing construction contracts and there is no economic feasibility for its further construction;
c) erected building structures and structural elements of an unfinished construction project are partially or completely destroyed and are unsuitable for further use as a result of a long break in construction, natural and other disasters, a dangerous natural phenomenon, a catastrophe, terrorist acts, or other actions carried out regardless of the will of the Balance Holder , fires, accidents, thefts, documented by internal affairs bodies, the federal state fire supervision body, and other authorized bodies;
— inspection and photographic recording of an unfinished construction site;
— collection of documentation for the unfinished construction project specified in paragraph 2.1 of this Procedure and checking it for compliance with the norms of current legislation;
— establishing the unsuitability (suitability) of erected building structures, structural elements and equipment for restoration and further use;
— establishing the reasons for the unsuitability of building structures, structural elements and equipment;
— drawing up, based on the results of the work of the Inventory Commission, an act of writing off costs for an unfinished construction project;
— issuing a conclusion on the need to inspect the structures of an unfinished construction object by a specialized (construction and technical) organization for the presence (absence) of the ability of the unfinished construction object to maintain its strength, physical and other properties established during design and ensuring its normal operation during the design service life;
— in the absence of documents confirming the financing of the unfinished construction project from the budgets of the budget system of the Russian Federation until 2003, drawing up a cost report for the unfinished construction project;
- in cases where an unfinished construction project is partially or completely destroyed and unsuitable for further use as a result of natural and other disasters, dangerous natural phenomena, catastrophes, terrorist attacks, other actions carried out regardless of the will of the Balance Holder, fires, accidents, theft, collection documents of internal affairs bodies, federal state fire inspection bodies, other authorized bodies confirming the fact of natural and other disasters, as well as actions carried out regardless of the will of the Balance Holder;
— preparation of a request to write off costs for an unfinished construction project, attaching all necessary documents and materials.
2. The procedure for writing off costs for an unfinished construction project
2.1. The balance holder sends to the Commission a request to write off costs for an unfinished construction project, attaching the following documents:
— a copy of the design documentation for the unfinished construction project (if available);
- a copy of the act on the suspension of construction drawn up by the Balance Sheet of the unfinished construction project with the participation of the contractor, in the KS-17 form, approved by Resolution of the State Committee on Statistics of the Russian Federation dated November 11, 1999 N 100 (if available);
— a copy of the technical inspection report of an unfinished construction facility, drawn up by the Balance Sheet Holder in any form (drawn up in the cases specified in subclause c) of clause 1.4 of this Procedure);
— a copy of the construction permit for an unfinished construction project (if available);
— copies of documents on the provision of land for construction (if available);
— a copy of the act on the suspension of design and survey work for uncompleted construction, drawn up by the Balance Sheet with the participation of the design organization, in form KS-18, approved by Resolution of the State Committee on Statistics of the Russian Federation dated November 11, 1999 N 100 (if available);
— photographs of an unfinished construction project (provided in the cases specified in subparagraph c) of paragraph 1.4 of this Procedure);
— a statement of write-off of costs for an unfinished construction project, the financing of which was carried out from the budgets of the budgetary system of the Russian Federation (Appendix No. 1 to this Procedure);
— explanatory note to the request to write off costs for an unfinished construction project (Appendix No. 2 to this Procedure);
— act of writing off costs for an unfinished construction project (Appendix No. 3 to this Procedure);
— copies of documents confirming the financing of an unfinished construction project from the budgets of the budget system of the Russian Federation;
— copies of certificates of work performed and costs for an unfinished construction project;
— act of the Inventory Commission of costs for an unfinished construction project (provided in the absence of documents confirming the financing of an unfinished construction project from the budgets of the budget system of the Russian Federation until 2003);
- copies of documents of internal affairs bodies, federal state fire supervision bodies, other authorized bodies, confirming the fact of natural and other disasters, fires, accidents, thefts, as well as actions carried out regardless of the will of the Balance Holder (provided in cases where the construction project is partially completed or completely destroyed and unsuitable for further use as a result of natural and other disasters, dangerous natural phenomena, catastrophes, terrorist acts, other actions carried out regardless of the will of the Balance Holder of the unfinished construction facility).
Other documents related to this object may be attached to the application to write off costs for an unfinished construction project.
2.2. The commission considers the materials and documents submitted by the Balance Sheet holder for the unfinished construction project in accordance with the Regulations on the Commission for Write-off of Costs for Unfinished Construction Projects.
2.3. A copy of the minutes of the Commission meeting containing the Commission’s decision to write off costs (refusal to write off costs) for an unfinished construction project is sent to the Balance Sheet holder within 3 working days from the date of its signing.
2.4. Based on the Commission’s decision to approve the write-off of costs, the Municipal Property Management Committee of the administration of the municipal municipality "Syktyvkar" is preparing a draft resolution of the administration of the municipal municipality "Syktyvkar" on the write-off of costs for an unfinished construction project.
2.5. Based on the resolution of the administration of the municipal municipality "Syktyvkar", the Balance holder of the unfinished construction project, within 10 working days from the date of its adoption, issues a corresponding order (instruction) and reflects in the accounting records the write-off of costs from the balance sheet in accordance with the current legislation of the Russian Federation.
Accounting consequences of writing off work in progress
We prepare documents
For various reasons, the company may change its plans, and it will have to liquidate the unfinished fixed asset. Moreover, this object can be written off only if there are documents confirming the very fact of its liquidation.
If construction as such has not yet begun, but, for example, money has already been spent on design work, then these capital investments are also considered unfinished. After all, such costs participate in the formation of the initial cost of the object and cannot be written off as expenses in the period in which they were incurred
The liquidation of unfinished work begins with management making an appropriate decision, for which an order is issued. The order needs:
- indicate the reason for making such a decision;
- appoint a commission to prepare documentation and determine suitable materials remaining after liquidation
Upon completion of all liquidation work (including dismantling/dismantling), the commission issues an act of decommissioning of the unfinished construction project. The act is drawn up in any form, taking into account the requirements for primary documents. Moreover, its form must be approved by order of the manager. The act can be drawn up, for example, like this.
