What is account 811? Learn how to account for other expenses (account for account 811), accounting principles for other expense accounts and the structure of account 811.
I. What is account 811? Accounting principles for account 811 – Other expenses
Other expense account (account 811) is an account used to record expenses outside of the unit’s normal production and business activities, including the following:
- Costs of sale and liquidation of fixed assets, including costs incurred in bidding for liquidation activities;
- The difference between the fair value of assets divided from the business cooperation contract (BCC) is less than the investment cost of constructing the jointly controlled assets;
- Remaining value of fixed assets demolished or sold, liquidated;
- Loss difference due to revaluation of fixed assets, materials, goods invested in associated companies or contributed to joint ventures and other investments;
- Fines from administrative fines, fines for violating economic contracts;
- Other expenses;
- Expenses with full invoices and documents but not considered reasonable expenses for calculating corporate income tax according to the provisions of the Tax Law must be adjusted downward in the corporate income tax finalization to increase the amount of corporate income tax payable.
II. Structure and content of account 811 – Other expenses
Debit side : Other expenses incurred such as liquidation costs, fixed asset sale, remaining value of sold fixed assets, liquidation…
Credit side : At the end of the period, transfer other expenses in the period to account 911 – determine business results.
Note:
Other expense account – 811: no ending balance.
III. Accounting for other expenses (accounting account 811) for common occurrences
1. Accounting for the remaining value of fixed assets transferred, sold or liquidated
- Amount received from liquidation and sale:
Debit account: 111 / 112 / 131 – Total payment amount;
Credit account: 711 – Amount received from liquidation and sale (excluding VAT);
Credit account: 3331 – VAT payable from liquidation and sale (if any).
- Costs arising from liquidation and sale of fixed assets:
Debit account: 811 – Expenses arising from liquidation and sale (excluding VAT);
Debit account: 1331 – VAT arising from liquidation and sale;
Credit account: 111 / 112 / 141 / 331 – Total amount payable.
- At the same time, reduce the original value of fixed assets from liquidation and sale:
Debit account: 214 – Value of fixed assets depreciated, liquidated, sold;
Debit account: 811 – Remaining value of liquidated and sold fixed assets;
Credit account: 211 / 213 – Original price of fixed assets liquidated or sold.
2. Accounting for demolition of fixed assets
Debit account: 214 – Depreciation value;
Debit account: 811 – Remaining value;
Credit account: 211 / 213.
3. Record the loss on the difference in asset valuation as other expenses when the remaining value used for capital contribution, investment in subsidiaries, joint ventures, associates or other investments is larger than the re-evaluation by the parties.
Debit account: 221 / 222 / 228;
Debit account: 811 – loss on the difference in the decrease in valuation;
Credit account: 211/213/217;
Account number: 152 / 153 / 155 / 156.
4. When converting the form of business ownership, if it is allowed to re-determine the value of the business at the time of conversion, the assets that are valued down are recorded in other expenses.
Debit account: 811;
Account number: 152 / 156 / 211…
5. Accounting for administrative fines and economic contract violations
Debit account: 811;
Credit account: 111 / 112 / 333 / 338.
6. At the end of the period, transfer other expenses during the period to account 911 – determine business results
Debit account: 911;
Account number: 811.
IV. Frequently asked questions when accounting for account 811 – Other expenses
1. Interest arising from late payment of social insurance, health insurance, and unemployment insurance is recorded in which expense account and is it considered a reasonable expense of the enterprise?
When late payment interest from social insurance, health insurance, and unemployment insurance arises, it is recorded in expense account 811. This expense is not considered a reasonable deductible expense of the enterprise according to tax law. This amount must be adjusted down when making the annual corporate income tax finalization.
2. How are late payment penalties from taxes collected after the enterprise’s final settlement accounted for?
Upon receiving a penalty decision from the tax authority regarding late tax payment, the following is recorded:
Debit account: 811 – Late tax payment according to decision;
Credit account: 3339 – Late tax payment according to decision.
This expense is not considered a reasonable deductible expense of the enterprise according to tax law and must be adjusted down when making the annual corporate income tax settlement.
3. If a business liquidates old fixed assets, what expenses are recorded as?
Expenses incurred related to asset liquidation are recorded in other expenses account 811. These expenses are reasonable expenses deductible according to tax law.