Encyclopedia of Accounting - Gracheva R.E. Section II P.1

Return to the retired participant of his share in the authorized capital in the form of the object of the OS introduced by him (in the event that in the course of operation this object was improved at the expense of the enterprise)

Taking into account the fact that in this case the object of investment is an object of fixed assets , and the object of disposal is the same object of fixed assets, VAT is charged only for a fraction of the value added by the enterprise in the process of operating the facility. Accordingly, only this share is the subject of sale. Conditions

• Evaluation of the object when making - 35000 UAH.

• During operation, the facility was improved at the expense of the enterprise. The cost of improvement is 7000 UAH.

• Therefore, the initial value of the object at the time of return was 42,000 UAH.

• Depreciation -4000 UAH.

• Residual value - 38000 UAH. (This is 3,000 more than the share of the charter capital that belonged to the retired participant.)

Table 2.29

№ п / п	Contents of operation	About		Companies on accounts
		Basic economic operations		Tax settlements transactions		Amount
		D-t	To	D-t	To	Amount
1.	The reduction of the authorized capital to the share belonging to the retired participant (posting is performed in connection with the re-registration of the enterprise)	40	672			35,000
2.	Object is written off from balance A) in the part attributable to the participant fee B) in terms of additional costs incurred by the enterprise for improving the facility	672 972	10 10			35,000 3000
3.	The retiring asset is written off in terms of depreciation	131	10			4000
4.	Part of the cost of the object is calculated to be paid to the retired participant (the amount of expenses incurred by the enterprise to improve the facility, plus VAT on this share)	672	742			3600
5.	VAT charged on sales value	742	641			600
6.	The sales volume, net of VAT, is recognized as the income of the reporting period	742	793			3000
7.	Expenses recognized in connection with the disposal of the facility are credited to a decrease in income	793	972			3000
Final settlements with the retired participant
8.	The enterprise receives compensation for the costs incurred in connection with the improvement of the facility and VAT to the amount of these expenses	301	672			3600

As a result of the operations, the retired participant (the founder) received his initial contribution (35,000) in the form of the same facility, but in an improved form, for which he was paid to the cashier's office 3000 UAH plus VAT 600 UAH. As you can see, in this case everything is fair, both in the tax and in the economic sense.

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