Reserve for reduction entry

12:06 Sep 7, 2019
English to Russian translations [PRO]
Bus/Financial - Accounting
English term or phrase: Reserve for reduction entry
Deferred tax liabilities:
Deferred revenue of foreign consolidated subsidiaries
Depreciation and amortization expenses
Valuation difference on available-for-sale securities
Reserve for reduction entry
Net defined benefit asset
Russian Federation
Local time: 18:59

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8 hrs

Reference information:
Reduction entries are a special accounting treatment for fixed assets that you acquire by using a government subsidy. You can use them to defer the corporate income tax for those assets throughout their service life.

When you acquire a fixed asset by using a government subsidy, the subsidy is treated as taxable revenue. However, if you account for the whole government grant as revenue, the result is a large amount of corporate income tax, which reduces the subsidizing effect of the grant. Therefore, a special accounting treatment called a reduction entry is permitted. Basically, reduction entries defer the corporate income tax throughout the service life of the fixed asset that is acquired. Two types of accounting treatment are allowed

Russian Federation
Native speaker of: Native in RussianRussian
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