What Is a Normal Loss?

Normal loss refers to the normal loss of the purchased goods or taxable services in the production and operation process, that is, reasonable loss.

Normal loss

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Normal loss refers to the normal loss of the purchased goods or taxable services in the production and operation process, that is, reasonable loss.

Chinese name

Normal loss

Aka

Reasonable loss

Time of occurrence

Production process

Happening object

Chapter 2 of Article 20 of the "Enterprise Accounting System" provides:

Reasonable loss of the purchased goods and other damages and shortages are two different types of economic matters, and the accounting treatment methods are also different. Different accounting treatments will provide decision makers with different accounting information.

Reasonable loss is a loss that cannot be avoided and can be estimated in advance in an enterprise's production and operation, and is a necessary cost for normal production and operation. Therefore, the value of a person's account in inventory should be counted. According to the "Accounting Standards for Business Enterprises-Inventory", the cost of inventory includes procurement costs, processing costs, and other costs. Reasonable losses in transit are an expense directly attributable to inventory purchases, which constitutes inventory purchase costs.

For other damages and shortages that occur in the procurement process except for reasonable consumption, different circumstances should be used for accounting treatment:

(1) The shortage of supplies or other compensation shall be recovered from the supplier, external transportation agency, etc., and the purchase cost of supplies shall be offset.

(2) Losses due to accidental disasters and losses on the way that have yet to be identified shall not increase the cost of procurement of materials, and shall be temporarily accounted for as losses of property to be processed.

[Example 1] A VAT general taxpayer purchased a batch of goods in the current period, the purchase price was 800,000 yuan, and the VAT input tax was 136,000 yuan. After the purchase of the goods, the inspection found a shortage of 30% of the goods, including a reasonable loss of 5 The remaining 25 per cent of the shortage is yet to be identified. Prepare accounting entries for the enterprise.

Analysis: Reasonable losses should be included in inventory costs, and input tax can be deducted. The shortfall to be checked is treated as the property overrun and the input tax is not deductible.

Borrow: 600,000 in stock (yuan) (80 × 75%)

Tax payable-VAT payable (input tax) 136000 (yuan) (80 × 17%)

Overflow of property to be processed 234000 (yuan) [800000 × 25% × (1 + 17%)]

Loan: accounts payable 93600 (yuan)

Tax payable-VAT payable (input tax amount transferred out) 34000 (yuan) (80 × 25% × 17%)

Under the planned cost method, reasonable losses are included in inventory costs and a "material cost variance" needs to be calculated. Other damages and shortages are not included in the cost of inventory, and "material cost differences" cannot be calculated.

[Example 2] A unit purchases 100 kg of materials, the planned unit price is 10 yuan / kg, the actual unit price is 12 yuan / kg; a shortage of 20 kg is found when the material is stored in the warehouse, and 12 kg is considered to be a reasonable loss and 8 kg is a reasonable way to consume Damage outside. Calculate the difference in material costs for this business.

Analysis: The quantity of human bank materials in the planned cost method must be calculated according to the actual quantity.

Planned cost = 80 kg x 10 yuan / kg = 800 yuan

Actual cost = (80 kg + 12 kg) × 12 yuan / kg = 1104 yuan

Material cost difference: 1104 yuan-800 yuan = 304 yuan

These material cost differences will be allocated on 80 kg of materials in the future.

Unreasonable loss meter management cost = 8 kg x 12 yuan / kg = 96 yuan