Home Wisdom teeth Accounting for repurchase agreements. Accounting and taxation of securities and shares Reflection of repo transactions in accounting

Wisdom teeth

Accounting for repurchase agreements. Accounting and taxation of securities and shares Reflection of repo transactions in accounting

International weekly "Financial newspaper" /

A. VAGAPOVA, leading auditor of JSC “Gorislavtsev and K. Audit”

REPO transactions are one of the instruments of the securities market. There is no definition of such a transaction in civil law. It can only be found in the regulatory documents of the Bank of Russia and the Tax Code of the Russian Federation. At its core, a repo is a bilateral transaction. In this case, one party sells securities to the other party with a simultaneous obligation to buy them back. And the other party buys securities with a simultaneous obligation to sell them back to the seller under the first part of the repo. Thus, this transaction consists of two parts:

sale of securities (first part of REPO);
repurchase of securities (second part of the repo).

Both transactions are concluded at the same time, but occur at different times. In fact, a repo is one of the ways to formalize transactions for borrowing funds or securities. Although in reality purchase and sale transactions are concluded.

The repurchase price of securities is usually determined at the time of sale. And here two situations are possible:

if the repurchase price is higher than the sale price, then the transaction can be considered as a loan secured by securities;
if the repurchase price is less than the sale price, then the transaction can be regarded as the provision of securities for use (loan). The difference in price will be considered a fee for the use of securities.

The legislation does not contain any regulations governing the accounting of repo transactions. In this regard, they can be interpreted in two ways when reflected in accounting. On the one hand, these transactions must be accounted for using sales accounts, since sales contracts are actually drawn up. On the other hand, in economic terms, a repo transaction is a loan. In order to avoid claims from inspection authorities, the chosen method of reflecting repo transactions in the accounting policy should be fixed.

The procedure for taxation of repo transactions is determined by Art. 282 of the Tax Code of the Russian Federation. With the adoption of Federal Law No. 58-FZ of June 6, 2005, it underwent some changes. Therefore, tax accounting of repo transactions will be considered taking into account the changes made.

In accordance with Art. 282 of the Tax Code of the Russian Federation, REPO transactions are understood as two simultaneously concluded interrelated transactions for the sale and subsequent acquisition of issue-grade securities of the same issue in the same quantity, carried out at prices established by the relevant agreement. The first transaction in time is recognized as the first part of the REPO, and the second - the second part of the REPO. The period between the first and second parts should not exceed one year. According to this article, the purchase price of securities during a repo transaction does not change.

Moreover, in certain cases, subject to the condition that the repo transaction rate established by the agreement remains unchanged, the number of securities and their sale price may be changed before the date of execution of the second part of the repo.

When selling securities under the first and second parts of a repo, the financial result for tax purposes is not determined.

Please note that if in the period between the first and second parts of the REPO the issuer of securities makes any payments, they can be taken to reduce the amount of funds payable by the seller under the first part of the REPO upon the subsequent acquisition of securities under the second part of the REPO. Or these amounts are separately transferred by the buyer of securities under the first part of the repo in accordance with the agreement. At the same time, such amounts are not the income of the buyer of the first part of the repo.

From a taxation point of view, the Tax Code of the Russian Federation divides repo transactions into two types.

1. Obtaining a loan.

In this case, the difference between the purchase price for the second part and the selling price for the first part will be the seller's expenses for the first part in paying interest on borrowed funds, taxation of which is carried out in the manner established by Art. 265, 269 and 272 of the Tax Code of the Russian Federation (the difference is positive), and for the buyer - income on placed funds, which are included in income in accordance with Art. 250 and 271 of the Tax Code of the Russian Federation.

2. Providing a loan with securities.

In this situation, the difference between the purchase price for the second part and the selling price for the first part will be for the seller in the first part income in the form of interest on a loan provided by securities (the difference is negative). For the buyer, such a difference will be recognized as expenses in the form of interest on a loan received with securities, which are included in expenses.

The date of recognition of income and expenses on repo transactions in accordance with clause 5 of Art. 282 of the Tax Code of the Russian Federation is the date of fulfillment (termination) of the participants’ obligations under the second part of the repo.

There is one more feature of the taxation of repo transactions. To determine the return, the actual selling price of the security is applied to both components of the repo transaction, regardless of their market value on the date of transfer. But if the repurchase of securities did not occur or did not occur in full, then in this case taxation occurs in accordance with the rules established by Art. 280 of the Tax Code of the Russian Federation, i.e. based on market prices.

Let's look at the accounting and tax accounting of repo transactions using examples.

Example 1. Organization “A” sells 10 shares of an oil company to organization “B”. at a price of 100 rubles. (the first part of the repo) with the obligation to repurchase them at a price of 130 rubles. (second part of the repo). In accounting, transactions are reflected as loan transactions.

A) Without using sales accounts.

			Amount, rub.
Organization "A"

Loan returned
Shares received
Organization "B"
The difference between the first and second parts of the repo is reflected
Loan returned
Shares transferred
Profit tax accrued

B) using sales accounts.

Reflection of transactions on the first part of the repo

			Amount, rub.
Organization "A"
Cash received as payment for shares
Shares transferred
PNA accrued for the amount of revenue
The cost of shares has been written off

The financial result of the transaction is reflected
Organization "B"
Paid shares
Securities received

Reflection of transactions on the second part of the repo

			Amount, rub.
Organization "A"
Shares purchased
Shares received<*>
PNA accrued (for the difference between the first and second parts of the repo)
Organization "B"
Shares sold
PNA accrued for the amount of revenue
The cost of shares has been written off
PNO accrued for the amount of expense
The financial result of the transaction is reflected (the difference between the first and second parts of the repo)
PNO accrued for the difference between the first and second parts of the repo
Funds received
Contingent income tax expense accrued

<*>For tax purposes, the share price remains unchanged - 850 rubles.

As you can see, this accounting option is inconvenient and cumbersome. It is necessary to adjust the amount of income and expenses for tax purposes, since according to Art. 282 of the Tax Code of the Russian Federation there are no sales turnover for such transactions. Therefore, the first option (reflection of loan transactions) is more convenient and economically feasible.

Example 2. Organization “A” purchased 10 bonds at a price of 110 rubles. plus NKD - 10 rubles. After some time, she entered into a repo transaction with organization “B”. Under the terms of the transaction, the bonds are sold at a price of 130 rubles. plus NKD - 15 rubles. with subsequent redemption at a price of 140 rubles. plus NKD - 20 rubles.

Reflection of transactions on the first part of the repo

			Amount, rub.
Organization "A"
Bonds purchased
By the amount of NKD
Loan received
Bonds transferred
Transferred to NKD
Organization "B"
Loan issued
Bonds received
NKD received

Reflection of transactions on the second part of the repo

			Amount, rub.
Organization "A"
The difference between the first and second parts of the repo is reflected
Loan returned
Bonds received
NKD received
Organization "B"
The difference between the first and second parts of the repo is reflected
Loan returned
Bonds transferred
Transferred to NKD

If between the first and second parts of the repo the bond issuer partially repays its face value, then you should pay attention to the terms of the agreement. There are two options here:

1. The amount of payments does not change the price of the contract. In this case, for the buyer of the first part of the repo, it is reflected in the settlement accounts: on the credit of account 76 - when it is received and on the debit of account 76 - when it is transferred.

2. The amount of payments changes the contract price. Transactions under the second part of the repo will be reflected as follows:

			Amount, rub.
Organization "B"
Partial repayment of the par value of bonds was received from the issuer
The difference between the first (1450) and second parts (1600 - 50 = 1550) of the repo is reflected
The loan was returned (taking into account the change in the selling price under the second part of the repo)
Bonds transferred
Transferred to NKD
Profit tax charged (150 x 24%)
Organization "A"
The difference between the first (1450) and second parts (1550) of the repo is reflected
The loan was returned (taking into account the change in the selling price under the second part of the repo)
Bonds received
NKD received

A. VAGAPOVA, leading auditor of JSC “Gorislavtsev and K. Audit”

sale of securities (first part of REPO);
repurchase of securities (second part of the repo).

The repurchase price of securities is usually determined at the time of sale. And here two situations are possible:

if the repurchase price is higher than the sale price, then the transaction can be considered as a loan secured by securities;
if the repurchase price is less than the sale price, then the transaction can be regarded as the provision of securities for use (loan). The difference in price will be considered a fee for the use of securities.

In accordance with Art. 282 of the Tax Code of the Russian Federation, repo transactions are understood as two simultaneously concluded interrelated transactions for the sale and subsequent acquisition of issue-grade securities of the same issue in the same quantity, carried out at prices established by the relevant agreement. The first transaction in time is recognized as the first part of the REPO, and the second - the second part of the REPO. The period between the first and second parts should not exceed one year. According to this article, the purchase price of securities during a repo transaction does not change.

When selling securities under the first and second parts of a repo, the financial result for tax purposes is not determined.

From a taxation point of view, the Tax Code of the Russian Federation divides repo transactions into two types.

1. Obtaining a loan.

In this case, the difference between the purchase price for the second part and the selling price for the first part will be the seller's interest in the first part as expenses for the payment of interest on borrowed funds, taxation of which is carried out in the manner established by Art. 265, 269 and 272 of the Tax Code of the Russian Federation (the difference is positive), and for the buyer - income on placed funds, which are included in income in accordance with Art. 250 and 271 of the Tax Code of the Russian Federation.

2. Providing a loan with securities.

Let's look at the accounting and tax accounting of repo transactions using examples.

A) Without using sales accounts.

			Amount, rub.
Organization "A"

Loan returned
Shares received
Organization "B"
The difference between the first and second parts of the repo is reflected
Loan returned
Shares transferred
Profit tax accrued

B) using sales accounts.

Reflection of transactions on the first part of the repo

			Amount, rub.
Organization "A"
Cash received as payment for shares
Shares transferred

The cost of shares has been written off

The financial result of the transaction is reflected
Organization "B"
Paid shares
Securities received

Reflection of transactions on the second part of the repo

			Amount, rub.
Organization "A"
Shares purchased
Shares received<*>
PNA accrued (for the difference between the first and second parts of the repo)
Organization "B"
Shares sold
PNA accrued for the amount of revenue
The cost of shares has been written off
PNO accrued for the amount of expense
The financial result of the transaction is reflected (the difference between the first and second parts of the repo)
PNO accrued for the difference between the first and second parts of the repo
Funds received
Contingent income tax expense accrued

<*>For tax purposes, the share price remains unchanged - 850 rubles.

Reflection of transactions on the first part of the repo

			Amount, rub.
Organization "A"
Bonds purchased
By the amount of NKD
Loan received
Bonds transferred
Transferred to NKD
Organization "B"
Loan issued
Bonds received
NKD received

Reflection of transactions on the second part of the repo

			Amount, rub.
Organization "A"
The difference between the first and second parts of the repo is reflected
Loan returned
Bonds received
NKD received
Organization "B"
The difference between the first and second parts of the repo is reflected
Loan returned
Bonds transferred
Transferred to NKD

If between the first and second parts of the repo the bond issuer partially repays its face value, then you should pay attention to the terms of the agreement. There are two options here:

2. The amount of payments changes the contract price. Transactions under the second part of the repo will be reflected as follows:

			Amount, rub.
Organization "B"
Partial repayment of the par value of bonds was received from the issuer
The difference between the first (1450) and second parts (1600 - 50 = 1550) of the repo is reflected

Bonds transferred
Transferred to NKD
Profit tax charged (150 x 24%)
Organization "A"
The difference between the first (1450) and second parts (1550) of the repo is reflected
The loan was returned (taking into account the change in the selling price under the second part of the repo)
Bonds received
NKD received

Application
to the letter from the Bank of Russia
from __ ___________ No. _________
“About Methodological Recommendations
“On the accounting procedure
repurchase agreements"

Methodical recommendations
“On the accounting procedure for repurchase agreements”

Chapter 1. General provisions

1.1. These Methodological Recommendations explain the accounting procedure for transactions carried out under agreements that meet the requirements for repurchase agreements in Article 51.3 of the Federal Law of April 22, 1996 No. 39-FZ “On the Securities Market”.

1.2. Funds received (provided) under the first part of the repurchase agreement are reflected on balance sheet accounts for accounting for other attracted (placed) funds in a manner similar to that established by Bank of Russia Regulation No. 385-P dated July 16, 2012 “On the rules of accounting in credit organizations located on the territory of the Russian Federation" (hereinafter referred to as Bank of Russia Regulation No. 385-P) taking into account these Methodological Recommendations.

Analytical accounting of accounts for other attracted (placed) funds is carried out in such a way as to ensure the receipt of information about obligations and requirements for the return of funds under each repurchase agreement.

1.3. Income (expenses) under a repurchase agreement are determined as the difference between the value of securities under the second and first parts of the repurchase agreement. If the value of securities under the second part of the repurchase agreement is adjusted to the amount of income payments on securities transferred under the repurchase agreement, or the amount of other payments made under the repurchase agreement, then the calculation of the amount of income (expenses) under the repurchase agreement is carried out taking into account the corresponding payments.

The income of the original buyer and the expenses of the original seller arising under the repurchase agreement are recognized as interest income (expenses) received (paid) for providing (raising) funds.

The income of the original seller and the expenses of the original buyer arising under the repurchase agreement are recognized as interest income (expenses) received (paid) for the provision (attraction) of securities.

1.4. Transactions related to the fulfillment of claims and obligations under a repurchase agreement are reflected in correspondence with the following balance sheet accounts:

No. 30602 “Settlements of principal credit institutions (principal principals) for brokerage transactions with securities and other financial assets”, if these operations are carried out by credit institutions through intermediaries;

No. 47403 and No. 47404 “Settlements with currency and stock exchanges”, if these transactions are carried out on stock exchanges or other organized trading by credit institutions as professional participants in the securities market;

No. 47407 and No. 47408 “Settlements for conversion transactions, derivative financial instruments and other agreements (transactions), under which settlements and delivery are carried out no earlier than the next day after the day of conclusion of the agreement (transaction)”;

No. 47422 “Obligations for other operations” and No. 47423 “Claims for other operations”, if repurchase agreements are concluded by credit institutions independently not at organized auctions.

The receivables (payables) formed on the specified accounts (hereinafter referred to as settlement accounting accounts) associated with the fulfillment of claims and obligations under the repurchase agreement are repaid in correspondence with the bank (correspondent, settlement) accounts of the recipient (payer) of funds or with accounts for the implementation of clearing, if repurchase agreements are concluded by credit institutions - clearing participants (hereinafter referred to as cash accounts).

1.5. Payment of funds or transfer of securities in the event of a change in the price of securities or in other cases provided for in the repurchase agreement, leading to a decrease (increase) in the obligation to transfer securities or funds under the second part of the repurchase agreement (hereinafter, for the purposes of these Methodological Recommendations - compensatory contributions) are reflected in accounting in accordance with these Methodological Recommendations.

1.6. For the purposes of these Methodological Recommendations, repurchase agreement 1 means a repurchase agreement between the original seller and the initial buyer of securities, repurchase agreement 2 means a repurchase agreement, in accordance with which the original buyer carries out transactions with securities received under repurchase agreement 1.

1.7. These Methodological Recommendations do not contain provisions defining the legal capacity of credit institutions whose activities are carried out in accordance with the Federal Law “On Banks and Banking Activities” and other federal laws.

Chapter 2. Accounting for repurchase agreements with the original seller

2.1. Execution of the first part of the repurchase agreement is reflected in accounting in the following order.

2.1.1. Transfer of securities:

2.1.2. Receipt of funds from the original buyer under the first part of the repurchase agreement:

2.2. Execution of the second part of the repurchase agreement is reflected in accounting in the following order.

2.2.1. Transfer of funds to the original buyer:

if the original seller incurs costs for raising funds under a repurchase agreement, the obligation to return funds under the repurchase agreement is the amount of funds raised, recorded on balance sheet accounts for accounting for other funds raised, and accrued interest:

Credit to the balance sheet account for accounting for settlements or balance sheet account for accounting for funds (for the amount of the obligation to return funds);

if the original seller receives income for the provision of securities under a repurchase agreement, the obligation to return funds under the repurchase agreement is less than the amount of raised funds recorded on balance sheet accounts for accounting for other raised funds, by the amount of accrued interest:

(amount of funds raised)

Credit to the balance sheet account for accounting for settlements or balance sheet account for accounting for funds (for the amount of the obligation to return funds).

2.2.2. Receipt of securities:

2.3. Compensation contributions are reflected in the accounting records of the original seller in the following order.

2.3.1. Transfer of funds (in the amount of compensation contribution):

Debit of the corresponding balance sheet account for accounting for other raised funds

2.3.2. Receipt of securities (in the amount of compensation contribution):

Debit of the balance sheet account for accounting for investments in securities of the corresponding category from which the securities were transferred

Credit to the balance sheet account for accounting for securities transferred without derecognition.

2.3.3. Receipt of funds (in the amount of compensation contribution):

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to the corresponding balance sheet account for accounting for other funds raised.

2.3.4. Transfer of securities (in the amount of compensation contribution):

Debit of the balance sheet account for accounting of securities transferred without derecognition

Credit to the balance sheet account for accounting for investments in securities of the corresponding category, from which the transfer of securities is carried out.

2.4. Depending on the conditions agreed with the counterparty, the fulfillment of its obligations to pay the issuer on securities due to the original seller is reflected in accounting in the following order.

2.4.1. When receiving cash income from debt securities (including in the form of partial repayment of the par value):

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

2.4.2. When referring to reduce the obligation to return funds:

Debit of the corresponding balance sheet account for accounting for other raised funds

Credit to balance sheet accounts for securities transferred without derecognition.

2.4.3. When provided to a counterparty on the terms of urgency, repayment and payment:

Credit to balance sheet accounts for securities transferred without derecognition.

2.5. If the second part of the repurchase agreement is not fulfilled within the prescribed period, the following accounting entries are made at the end of the trading day.

If the original seller incurs costs for raising funds under a repurchase agreement, the obligation to return funds in the amount of funds raised and accrued interest is transferred to the appropriate balance sheet accounts for accounting for overdue interbank debt and overdue interest or unfulfilled obligations under contracts for attracting customer funds .

If the original seller receives income for the provision of securities under a repurchase agreement, the amount of accrued interest is written off from balance sheet account No. 47427 “Requirements for receiving interest” in correspondence with the corresponding balance sheet account for accounting for other funds raised, after which the obligation to return funds is transferred to the corresponding balance sheet accounts for accounting for overdue interbank debt or unfulfilled obligations under agreements to attract customer funds.

2.6. If the counterparties have reached an agreement to settle claims and obligations under an unfulfilled repurchase agreement at the expense of securities transferred under the first part of the repurchase agreement, transactions for its execution are reflected in the accounting records of the original seller as a sale of securities in accordance with Appendix 10 to Bank of Russia Regulation No. 385-P.

In this case, the amount of the obligation to return funds is written off from the corresponding balance sheet accounts for accounting for overdue interbank debt and overdue interest or unfulfilled obligations under agreements to attract funds from clients and is reflected in the credit of balance sheet account No. 61210 “Disposal (sale) of securities.”

The difference between the value of securities determined for the purposes of settling claims and obligations under a repurchase agreement, the obligations for the transfer of which were not fulfilled by the original buyer under the repurchase agreement, and the amount of funds, the obligations for the transfer of which were not fulfilled by the original seller under the repurchase agreement, is reflected accordingly to the loan or debit to balance sheet account No. 61210 “Disposal (sale) of securities” in correspondence with the balance sheet account for accounting for settlements.

Chapter 3. Accounting for repurchase agreements with the original buyer

3.1. Execution of the first part of the repurchase agreement is reflected in accounting in the following order.

3.1.1. Receipt of securities:

3.1.2. Transfer of funds to the original seller under the first part of the repurchase agreement:

Debit of the corresponding balance sheet account for accounting for other placed funds

Credit to the balance sheet account for accounting for settlements or balance sheet account for accounting for cash.

3.2. When the initial buyer carries out transactions with securities received under a repurchase agreement 1, accounting for such transactions is carried out in the following order.

3.2.1. Transfer of securities (part of securities) under repurchase agreement 2:

Debit of off-balance sheet account No. 91419 “Securities transferred under transactions carried out on a return basis” (for the amount of the requirement for the return delivery of securities)

Credit to account No. 99999 “Account for correspondence with active accounts with double entry.”

Receiving funds:

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to the corresponding balance sheet account for accounting for other raised funds (personal account “Obligation to return funds under repurchase agreement 2”).

The cost of securities transferred under repurchase agreement 2 is recorded in off-balance sheet account No. 91419 “Securities transferred under transactions carried out on a return basis” until the obligations under the second part of repurchase agreement 2 are fulfilled.

The cost of securities received under repurchase agreement 1, reflected in off-balance sheet account No. 91314 “Securities received under transactions carried out on a return basis” in accordance with subclause 3.1.1 of clause 3.1 of this chapter, is taken into account until the obligations under the second part are fulfilled repurchase agreement 1.

3.2.2. When selling securities (part of securities) received under repurchase agreement 1, the following accounting entries are made.

The cost of sold securities is debited from off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis”:

(at the cost of securities sold)

At the same time, funds received from the sale of securities are reflected in the credit of balance sheet account No. 61210 “Disposal (sale) of securities”, and the obligation for the return delivery of securities is reflected in the debit of balance sheet account No. 61210 “Disposal (sale) of securities”:

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to balance sheet account No. 61210 “Disposal (sale) of securities”,

Credit to the corresponding balance sheet account for accounting for other raised funds (personal account “Obligation for the return delivery of securities under repurchase agreement 1”).

The obligation to re-deliver securities, with the exception of equity securities, the fair value of which cannot be reliably determined, is revalued at least once a month (on the last business day of the month) at fair value with the results reflected in correspondence with expense accounts ( income) for the corresponding symbols of operating expenses on transactions with purchased securities (income from transactions with purchased securities).

3.2.3. Upon subsequent acquisition of securities, the obligation for the return delivery of which is reflected in the balance sheet account for accounting for other funds raised, the following accounting entries are made simultaneously.

The acquisition of securities is reflected in accounting in the manner established by Appendix 10 to Bank of Russia Regulation No. 385-P.

Restoration in off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis” of the value of securities received under repurchase agreement 1:

Debit of account No. 99998 “Account for correspondence with passive accounts with double entry”

Credit to off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis.”

Termination of accounting for the obligation to return securities on the balance sheet account for other raised funds is reflected as a disposal (sale) of securities:

Debit of balance sheet account No. 61210 “Disposal (sale) of securities”

Credit to the balance sheet account for accounting for investments in securities of the corresponding category.

Write-off of the liability amount:

Debit of the corresponding balance sheet account for accounting for other raised funds (personal account “Obligation for the return delivery of securities under repurchase agreement 1”)

Credit to balance sheet account No. 61210 “Disposal (sale) of securities.”

The difference between the value of the retiring securities and the amount of the obligation for the return delivery of securities written off from the corresponding balance sheet account for accounting for other raised funds (personal account “Obligation for the return delivery of securities under the repurchase agreement 1”) is subject to credit to the accounts for accounting for income or expenses.

3.3. Analytical accounting of obligations and requirements for the return delivery of securities under repurchase agreements on off-balance sheet accounts No. 91314 “Securities received under transactions carried out on a return basis” and No. 91419 “Securities transferred under transactions carried out on a return basis” is carried out in this way to ensure that information about the obligations and claims under each repurchase agreement is obtained.

3.4. Obligations and requirements for the return delivery of securities, with the exception of equity securities, the fair value of which cannot be determined reliably, recorded respectively in off-balance sheet accounts No. 91314 “Securities received under transactions carried out on a return basis” and No. 91419 “Securities , transferred for transactions carried out on a return basis”, at least once a month (on the last working day of the month) are revalued at fair value with the results reflected in correspondence with accounts No. 99998 “Account for correspondence with passive accounts with double entry” and No. 99999 “Account for correspondence with active accounts with double entry.”

3.5. Execution of the second part of the repurchase agreement 1 is reflected in accounting in the following order.

3.5.1. Reverse delivery of securities:

Debit of off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis”

Credit to account No. 99998 “Account for correspondence with passive accounts with double entry.”

3.5.2. If the securities (part of the securities) received under repurchase agreement 1 were transferred under repurchase agreement 2, the execution period of which exceeds the execution period of repurchase agreement 1, at the cost of the securities held by the original buyer or acquired by him, corresponding to those transferred under the repurchase agreement 2 and accounted for in off-balance sheet account No. 91419 “Securities transferred under transactions carried out on a repayable basis”, the following accounting entry is made:

Debit of the balance sheet account for accounting of securities transferred without derecognition

Credit to the balance sheet account for accounting for investments in securities of the corresponding category, from which the return delivery of securities is carried out.

At the same time, the requirement for the return delivery of the corresponding securities under repurchase agreement 2 is written off from off-balance sheet account No. 91419 “Securities transferred under transactions carried out on a return basis” in correspondence with account No. 99999 “Account for correspondence with active accounts with double entry.”

3.5.3. Receiving funds from the original seller:

if the initial buyer receives income for the provision of funds under a repurchase agreement, the requirement for the return of funds under the repurchase agreement is the amount of the provided funds recorded on the balance sheet accounts for accounting for other allocated funds, and accrued interest:

Credit to balance sheet account No. 47427 “Claims for interest” (for the amount of accrued interest)

Credit to the corresponding balance sheet account for accounting for other allocated funds (for the amount of funds provided);

if the initial buyer bears the costs of attracting securities under a repurchase agreement, the requirement for the return of funds under the repurchase agreement is less than the amount of placed funds recorded on balance sheet accounts for accounting for other placed funds, by the amount of accrued interest:

Debit of the balance sheet account for accounting for settlements or the balance sheet account for accounting for funds (for the amount of the claim for the return of funds)

Debit of balance sheet account No. 47426 “Obligations to pay interest” (for the amount of accrued interest)

Credit to the corresponding balance sheet account for accounting for other allocated funds (for the amount of funds provided).

3.6. Execution of the second part of the repurchase agreement 2 is reflected in accounting in the following order.

3.6.1. Transfer of funds to the original buyer under repurchase agreement 2:

if the original seller under repurchase agreement 2 bears costs for raising funds under repurchase agreement 2:

Debit of balance sheet account No. 47426 “Interest payment obligations” (for the amount of accrued interest under repurchase agreement 2)

Credit to the balance sheet account for accounting for settlements or the balance sheet account for accounting for funds (for the amount of the obligation to return funds under the repurchase agreement 2);

if the original seller under repurchase agreement 2 receives income for the provision of securities under repurchase agreement 2:

Debit of the corresponding balance sheet account for accounting for other raised funds (personal account “Obligation to return funds under repurchase agreement 2”) for the amount of funds raised under repurchase agreement 2

Credit to balance sheet account No. 47427 “Claims for interest” (for the amount of accrued interest under repurchase agreement 2)

3.6.2. Receipt of securities:

Debit of account No. 99999 “Account for correspondence with active accounts with double entry”

Credit to off-balance sheet account No. 91419 “Securities transferred for transactions carried out on a repayable basis.”

3.6.3. If the received securities (part of the securities) in accordance with subclause 3.5.2 of clause 3.5 of this chapter are taken into account on the balance sheet account for securities transferred without derecognition, an accounting entry is made:

Debit of the balance sheet account for accounting for investments in securities of the corresponding category, from which the return delivery of securities was carried out under a repurchase agreement 1

Credit to the balance sheet account for accounting for securities transferred without derecognition.

3.7. Compensation contributions are reflected in the accounting records of the original buyer in the following order.

3.7.1. Receipt of funds (in the amount of compensation contribution):

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

3.7.2. Transfer of securities (in the amount of compensation contribution):

Debit of off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis”

Credit to account No. 99998 “Account for correspondence with passive accounts with double entry.”

3.7.3. Transfer of funds (in the amount of compensation contribution):

Debit of the corresponding balance sheet account for accounting for other placed funds

Credit to the balance sheet account for accounting for settlements or balance sheet account for accounting for cash.

3.7.4. Receipt of securities (in the amount of compensation contribution):

Debit of account No. 99998 “Account for correspondence with passive accounts with double entry”

Credit to off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis.”

3.8. Payments by the issuer on securities (including in the form of partial repayment of par value) due to the original seller are determined based on the terms of the repurchase agreement and are reflected in the accounting records of the original buyer no later than the day provided for by the terms of the repurchase agreement for the fulfillment of his obligations to the original buyer. by the seller for the specified payments, the following accounting entry:

Debit of balance sheet account No. 47423 “Claims for other transactions” (for a separate personal account(s) “Claims for payments on securities received without initial recognition”)

Credit to balance sheet account No. 47422 “Liabilities for other transactions” (for a separate personal account(s) “Liabilities for payments on securities received without initial recognition”).

3.9. Depending on the conditions agreed with the counterparty, the fulfillment of obligations for payments specified in paragraph 3.8 of this chapter is reflected in accounting in the following order.

3.9.1. When transferring in cash:

Debit of balance sheet account No. 47422 “Liabilities for other operations” (for a separate personal account(s)

“Liabilities for payments on securities received without initial recognition”)

Credit to the balance sheet account for accounting for settlements or balance sheet account for accounting for cash.

3.9.2. When referring to reduce the requirement for a refund:

Credit to the corresponding balance sheet account for accounting for other placed funds.

3.9.3. For subsequent returns on the terms of urgency, refundability and payment:

Debit of balance sheet account No. 47422 “Liabilities for other transactions” (for a separate personal account(s) “Liabilities for payments on securities received without initial recognition”)

Credit to the corresponding balance sheet account for accounting for other funds raised.

3.10. Payments by the issuer on securities made during the validity period of the repurchase agreement 1, the requirements for which were taken into account by the initial buyer in accordance with paragraph 3.8 of this chapter, are reflected in accounting in the following order.

3.10.1. If the obligation for the return delivery of securities is accounted for in off-balance sheet account No. 91314 “Securities received under transactions carried out on a return basis”, receipt of funds from the issuer of securities or from the original buyer under a repurchase agreement 2 (in the case of transfer of received securities via repurchase agreement 2) is reflected in the following accounting entry:

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to balance sheet account No. 47423 “Claims for other transactions” (for a separate personal account(s) “Claims for payments on securities received without initial recognition”).

3.10.2. If the obligation for the return delivery of securities is recorded on the balance sheet account for accounting for other raised funds (in the case of the sale of securities), the claim for payments on securities received without initial recognition, recorded on a separate personal account of balance sheet account No. 47423 “Claims for other transactions ", is subject to write-off as expenses.

3.11. The difference between the amount of funds received from the issuer and the amount of funds to be transferred (transferred) to the original seller is reflected in accounting in accordance with the procedure for settling settlements for the specified difference, agreed with the counterparty.

3.12. If the second part of the repurchase agreement is not fulfilled on time, the following accounting entries are made at the end of the trading day.

If the original buyer receives income for the provision of funds under a repurchase agreement, the requirement for the return of funds in the amount of the provided funds and accrued interest is transferred to the appropriate balance sheet accounts for accounting for overdue interbank debt and overdue interest or overdue debt for other placed funds and overdue percent.

If the initial buyer incurs costs for attracting securities under a repurchase agreement, the amount of accrued interest is written off from balance sheet account No. 47426 “Obligations to pay interest” in correspondence with the corresponding balance sheet account for accounting for other placed funds, after which the requirement for the return of funds is transferred to the corresponding balance sheet accounts for accounting for overdue interbank debt or overdue debt for other placed funds.

3.13. If the counterparties have reached an agreement to settle claims and obligations under the unfulfilled repurchase agreement at the expense of securities received under the first part of the repurchase agreement, transactions for its execution are reflected in the accounting records of the original buyer as the acquisition of securities in accounting entries:

Debit of the balance sheet account for accounting for investments in securities of the corresponding category (for the amount of the request for the return of funds)

Credit to the balance sheet account for accounting for overdue interest (for the amount of accrued interest)

Credit to balance sheet accounts for accounting for overdue interbank debt or overdue debt for other allocated funds (for the amount of overdue debt for provided funds).

At the same time, obligations for the return delivery of securities recorded in off-balance sheet account No. 91314 “Securities received under transactions carried out on a return basis” are written off in correspondence with account No. 99998 “Account for correspondence with passive accounts with double entry.”

The difference between the value of securities determined for the purposes of settling claims and obligations under a repurchase agreement, the obligations for the transfer of which were not fulfilled by the original buyer under the repurchase agreement, and the amount of funds, the obligations for the transfer of which were not fulfilled by the original seller under the repurchase agreement, is reflected accordingly to the loan or debit the balance sheet account for accounting for investments in securities in correspondence with the balance sheet account for accounting for settlements.

3.14. If the conditions for terminating obligations under a repurchase agreement provide for the sale by the original buyer under the repurchase agreement of securities received under the repurchase agreement, repayment of overdue debt is reflected in the following order.

Write-off of overdue debt on funds provided:

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to balance sheet accounts for accounting for overdue interbank debt or overdue debt for other placed funds.

Write-off of overdue debts based on interest:

Debit of the balance sheet account for accounting of settlements or the balance sheet account for accounting of cash

Credit to the balance sheet account for accounting for overdue interest (for the amount of accrued interest under the repurchase agreement due to the original buyer for the provision of funds).

At the same time, the securities received under the first part of the repurchase agreement are written off from off-balance sheet account No. 91314 “Securities received under transactions carried out on a repayable basis” in correspondence with account No. 99998 “Account for correspondence with passive accounts with double entry.”

Information for posting on the official website of the Bank of Russia the draft methodological recommendations “On the accounting procedure for repurchase agreements”

The Bank of Russia is submitting for discussion by the banking community a draft of methodological recommendations “On the procedure for accounting for repurchase agreements” (hereinafter referred to as the draft methodological recommendations).

The draft methodological recommendations have been prepared to explain the accounting procedure for transactions carried out under agreements that meet the requirements for repurchase agreements in Article 51.3 of Federal Law No. 39-FZ of April 22, 1996 “On the Securities Market”, and to bring it into line with international standards financial statements.

The accounting procedure for transactions carried out under a repurchase agreement, set out in the draft guidelines, is based on the requirements of IAS 39 “Financial Instruments: Recognition and Measurement”, according to which, if a financial asset is sold under an agreement providing for repurchase the same or substantially identical asset at a fixed price or at a sales price plus lender's income, it is not derecognised because the transferor retains substantially all the risks and rewards of ownership of the asset.

The procedure for accounting of transactions carried out under a repurchase agreement recommended by the draft methodological recommendations provides for the use of a new off-balance sheet account No. 91419 “Securities transferred under transactions carried out on a repayable basis”, introduced into the Chart of Accounts for accounting in credit institutions by Directive of the Bank of Russia dated 19.08. 2014 No. 3365-U “On amendments to the Bank of Russia Regulations dated July 16, 2012 No. 385-P “On the rules of accounting in credit institutions located on the territory of the Russian Federation.”

The application of the draft methodological recommendations by credit institutions is planned from January 1, 2015.

From this date, the letter of the Bank of Russia dated September 7, 2007 No. 141-T “On the reflection in accounting of transactions of purchase and sale of securities with the obligation of their subsequent sale and repurchase” is canceled.

WITHIt is advisable for an IFRS practitioner dealing with repurchase transactions to have a general understanding of the concepts, structure and basic parameters of legal repurchase agreements, as such an understanding may be useful in making the correct decision on how to classify a given transaction in accordance with IFRS.

The word “repo” is part of the professional jargon of financiers and is an abbreviation (more precisely, a shortening, not an abbreviation) derived from the English word repurchase(pronounced "reporchez").

It is clear that most repo transactions are carried out not on the financial markets of Russia, but in the United States and the European Union, where the size of the repo market is gigantic and is estimated at approximately 10 trillion (!) US dollars each.

However, in Russia this financial instrument has recently become more and more popular. The reason this type of transaction is so widespread is its relative simplicity (compared to other structured transactions), as well as the undeniable advantage that the lender receives, namely much greater and legally easier access to collateral (compared to a conventional loan, in which entering into legal ownership of the collateral in the event of borrower default often requires litigation).

The repo market is the most active and largest component of the so-called money market ( money market). Repurchase agreements are widely used by businesses, banks, governments and municipalities to invest excess liquidity on a short-term basis or to borrow funds on favorable terms.

In a repo situation, the lender feels relatively safe: not only does he already have the collateral, but he is also in full legal ownership. However, this does not mean that repo transactions magically eliminate all risks. In addition to the seller's credit risk associated with the potential failure of the seller to fulfill its obligation to repurchase the securities sold, there remain market risks, such as a possible sharp drop in the market value of the securities received. In this case, however, there is a separate “antidote”: usually, according to a repurchase agreement, the buyer (i.e., the creditor) has the right to demand that the seller increase the margin requirement. Typically, to protect the buyer from adverse market fluctuations in the value of a security, the seller may be required to provide the buyer with an initial (and subsequently additional) variation margin. This will be discussed in more detail below.

So, let's look at repo transactions and try to debunk the myths associated with the difficulties of their accounting.

Usually under a repurchase agreement ( repurchase agreement) understand a contract for the purchase and sale of securities in exchange for cash or other consideration with the simultaneous assumption of an obligation to repurchase them by the seller after a certain period at a fixed price (or, more precisely, at the initial sale price plus certain interest that the “original” seller of securities pays to the buyer of securities at the time of the second part of the transaction, that is, closes the transaction by repurchasing his securities back).

Any repo transaction consists of two interrelated operations: first, the sale of securities (the first part of the repo) and then their repurchase (the second part of the repo). If you take a closer look at the economic essence of a repo transaction, it becomes clear what it actually represents financing operation secured by securities. Theoretically speaking, the subject of a repurchase agreement can be any asset at all, and not just securities. It’s just that in practice, the latter are practically the only object of such agreements, and among securities, government treasury bonds are the most often purchased and sold.

It is necessary to distinguish between the concepts of “repurchase agreement” and “repurchase transaction”. The term “repurchase agreement” is more suitable to describe the legal form of the transaction recorded in the relevant documents, such as, for example, standard:

Global Master Repurchase Agreement (GMRA, an international model of a repurchase agreement);

Standard exchange agreements.

A standard repurchase agreement template was developed back in the 80s. last century by the American financial association The Bond Market Association (TBMA). Then, in the 90s, the International Securities Market Association (ISMA) developed the GMRA format, based on the work of its colleagues from TVMA. In 2000, a format for repurchase agreements, abbreviated as TBMA/ISMA GMRA, was published jointly by specialists from both associations and is generally accepted in international financial markets.

The concept of “repo transaction” is used to reflect the economic essence of a repo transaction (i.e., receipt of funds for a certain period of time secured by securities). The repo transaction itself is a combination of a regular cash transaction and a forward contract, with each of these parts being an integral element of the transaction.

It is interesting that if according to IFRS - in connection with the reflection of repo transactions according to their economic essence - there is no derecognition of an asset (securities) from the “seller”, then in practice, accounting under RAS, repo transactions are almost always reflected in their legal form, i.e. e. simply as an unrelated sale and purchase of similar securities, although it is obvious that both parts of the repo transaction represent linked transactions(related transactions).

From the point of view of the role of the initiator of repo transactions (and we are interested in him as a company reporting under IFRS), transactions differ direct repo (repo) And reverse repo (reverse repo):

In a direct repurchase transaction, the reporting company is the seller of the securities;

In a reverse repurchase transaction, the company is the buyer of securities.

To make it easier to understand, we present this information in the form of a table. 1.

Table 1

	Repo	Reverse repo
Counterparty in a transaction	Salesman	Buyer
Economic essence		Creditor
Cash	Receives	Provides
First part of the deal	Sells papers	Buys papers
Second part of the deal	Buys papers	Sells papers

It should be emphasized that forward repo and reverse repo are not two different types of repo transactions, as is sometimes mistakenly believed. This is the same transaction, but from the point of view of opposite counterparties: the seller and the buyer. It can be said that a spot sale of securities and a simultaneous forward purchase for the seller (i.e., direct repo, or simply repo) corresponds to a spot purchase of the same securities and their forward sale for the buyer (i.e., for the latter this the transaction will be a reverse repo, essentially an operation of issuing a loan secured by collateral).

Since, according to IFRS, when accounting for repo transactions, the selling company continues to separately recognize the transferred asset (securities), despite its “formal” sale, this asset and the associated liability should not be offset in the seller’s general financial statement. Likewise, a company must not offset (offset) the income arising from the securities it has transferred with the expenses incurred on the related obligation.

In addition, there are accounting features related to the presence or absence, under a repurchase agreement, of the buyer of the paper (i.e., the creditor) of the right to resell the financial instrument received by him. The accounting for transferred securities by the transferor and the transferee depends on whether the transferee has the right to also repledge those securities and on whether the party transferring the securities has complied with its obligations or not. In this regard, depending on one of four possible situations, the seller and buyer of a security under a repurchase agreement must account for such transferred securities as follows:

1. If the buyer has the right, in accordance with the agreement (or generally accepted practice in this financial market), to sell or repledge the securities received by him as security for the issued funds, then the seller is obliged to reclassify such a financial asset in his general financial statement separately from other assets (subject to its materiality , Certainly). For example, a new line in the securities seller’s general physical documentation may be called:

- “Financial assets transferred into debt”;

- “Equity instruments pledged under repurchase agreements”;

- “Receivables for repurchase”.

2. If the buyer under a repo transaction resells the securities received by him to any third party, then he must recognize the proceeds from the sale (for example, Dt “Cash”) and create (Kt) an obligation to return this collateral to the seller under the repo transaction. Moreover, such a liability should be measured in the buyer’s general financial statement at fair value - initially and at each reporting date.

3. If the seller of a repo transaction does not fulfill the terms of the agreement (for example, does not return the entire required amount of funds to the buyer on time) and therefore does not have the right to get his securities back, then the seller is obliged to cease recognizing the transferred collateral on that day, and the buyer must recognize the securities it receives as its own asset, initially measured at fair value. If the buyer under a repo transaction has already sold the securities he received, then it is necessary to cease recognizing his obligation to return this collateral due to the seller’s failure to fulfill his obligations.

4. Except for the cases provided for in paragraph 3, the seller of securities under a repurchase agreement is obliged to continue to account for these securities as his asset, and the buyer does not have the right to account for them as an asset (because, in their economic essence, these securities are only received collateral, ensuring the return of transferred funds).

In terms of time horizon, repo transactions are generally divided into three categories:

Overnight (daily loans);

Futures transactions with a pre-agreed deadline;

Transactions with an open (conditional) term.

An overnight repo is a one-day loan (the term of the second part of the transaction is one day). Repurchase forward transactions have a specific specified expiration date. Open repo transactions do not have a specific expiration date; it is determined depending on the occurrence of a certain future event specified in the repurchase agreement.

Typically, repurchase agreements with an open termination date also contain a clause giving any counterparty the right to require the other party to the agreement to close it, subject to one day's notice.

In practice, most repo transactions are, as a rule, short-term, but quite often transactions are concluded with a maturity of 1-2 years. If the repo transaction is long-term, then, as a rule, additional calculations on variation margin may be required.

In order to reduce the costs of the parties to a repo transaction, oddly enough, it may be beneficial to use a third party who plays the role of a “custodian” (i.e., temporarily takes the papers for safekeeping) - this way you can avoid the costs of legal re-registration of property rights for a security. This type of repo transaction is called Held-in-Custody(HIC). They reduce the cost of the transaction for both parties, each of whom avoids registration fees. Sometimes, if there is a certain limit of trust between the parties, re-registration can be avoided without the participation of an intermediary. For example, if a large bank sells securities, then it can, with the consent of the buyer, temporarily (for the period of validity of the repurchase agreement) “hold” them in a special separate account, and not carry them through the depository.

If the subject of a repo transaction is not debt securities (such as, for example, bills or bonds), but shares, then their accounting may become somewhat more complicated due to the peculiarities of current and deferred taxation on dividends, as opposed to coupon income.

Repo transactions can be concluded in a wide variety of formats: as in an active exchange market ( exchange trading), and in the over-the-counter turnover of securities ( over-the-counter trading); both with related parties and with independent third parties.

Due to the many options, let’s try to figure out what common attributes are inherent in all agreements (i.e., in terms of the legal component) and repo transactions (in terms of the economic “stuffing”).

Each repo transaction has certain characteristics that must be identified in order for it to be properly accounted for under IFRS. Let's take a closer look at these typical characteristics of repo transactions, which usually include the following.

Repo asset- arises under a reverse repo transaction in the OFP buyer as a result of the transfer of funds to the seller of securities. A repo asset can be reflected, for example, under the following items of the purchaser of securities:

- “Accounts receivable under reverse repurchase transactions.”

If the maturity date of the second part of the transaction is up to 90 days from the date of the initial sale, then such an asset may be included in the item “Cash equivalents” (here we do not mean the securities received by the buyer, but the funds transferred to the seller).

If the period for the second part of the transaction to occur is more than 90 days, then the asset may be reflected in the article “Credits and borrowings issued under reverse repurchase transactions.”

In general physical training seller securities under a repurchase agreement, their recognition in connection with the repurchase sale does not cease, since the seller retains substantially all the risks and rewards associated with ownership of these financial assets.

Repo obligation- accounts payable in the seller’s physical financial statements under a direct repurchase transaction, which arises as a result of receiving funds from the buyer of securities. It is reflected in the general financial statement item “Accounts payable under repo transactions” in correspondence with a debit for funds received by the seller. Also, the obligation to repurchase the sold securities by the seller can be reflected in the liability of his general financial statement in the line “Credits or borrowings received.”

Let's look at an example of what changes occur in the formal financial statement of the seller of securities under a repurchase agreement.

Example 1

Due to the fact that in repo transactions it is prohibited to offset related assets and liabilities, in practice, in a certain sense, “inflation” occurs ( grossing up) OFP currency in the OFP from the seller of securities, since he continues to hold the financial asset sold by him and at the same time recognizes another asset (cash received) in correspondence with the corresponding liability. Let's take a simplified example, when the company had only one asset - bonds worth 100 rubles. and no obligations. The company sold these bonds for 100 rubles. and received the corresponding amount of money (Table 2).

Table 2

Excerpt from the seller’s formal financial statement before and after the repo transaction, rub.

Assets	Before the repo deal	After the repo deal
Bonds
Cash
Total assets
Capital and liabilities
Capital (authorized capital)
Liabilities (loans received)
Total capital and liabilities

According to IFRS, bonds sold under a repurchase agreement can be presented in the general financial statement on a new line, for example, under the item “Trading securities pledged under repurchase agreements” (if these bonds were initially classified in the first category of financial assets). When recognizing a repo transaction, the seller does not write off the securities transferred to him - the object of the transaction - from his OFP and may even leave them in the original category (disclosure is required in the notes). However, if the buyer has the right, specified in the repurchase agreement, to further transfer the securities received by him under the repurchase agreement (for example, further resale to third parties, pledge, exchange of shares, entering into his own repurchase agreement, etc.), then the seller is obliged reclassify the securities transferred to them into the item “Pledged financial assets”.

For its part, the buyer of securities under a repo transaction does not recognize them in its FPP, except in cases of short sale ( short sale) and default on the part of the seller.

Let's continue to consider the main attributes of repo transactions.

Right to Substitution. If the repurchase agreement gives the buyer the right replace assets that are similar to the transferred financial asset (but are not itself or similar ones, for example debt securities of the same issuer, but of different series) and have the same fair value at the date of repurchase, then recognition of the asset sold in the transaction repo, the seller does not terminate, since he retains virtually all the risks and rewards associated with owning the asset.

Date of the first part of the repo transaction ( sale/purchase date) - date of sale (purchase) of securities - the subject of the transaction. This parameter affects the moment of recognition of a repo asset or repo liability under a repo transaction in accounting.

Date of the second part of the repo transaction ( repurchase date) - date of repurchase of securities - the subject of the transaction (or almost identical securities). The repurchase date affects the effective rate, as well as the derecognition date of the repo asset (liability).

The amount of the first part of the repo transaction ( sale price) - the price at which the securities - the subject of the transaction were sold to the buyer. This parameter affects the carrying amount of the repo asset (liability) determined upon initial recognition. However, it usually includes transaction costs for purchase and sale.

The amount of the second part of the repo transaction ( repurchase price) - price of repurchase of securities by the seller. This parameter affects the effective interest rate and the repo rate.

Repo rate ( repo rate) - fixed rate of the repurchase agreement, the difference between the first and second parts of the repurchase transaction, expressed as a percentage (in practice, this parameter can be close to or even equal to the effective interest rate, if it does not deviate significantly from it).

Repo term- the time interval starting from the date of sale (purchase) of securities and ending with the date of their repurchase. This parameter affects the effective interest rate and the presentation of repo assets (liabilities) in the general financial statement as short-term or long-term.

Transaction costs ( transaction costs) - commission expenses, remuneration and other expenses that are directly related to the sale or repurchase of securities. Transaction costs affect the initial measurement of repo assets (liabilities) and the calculation of the effective rate.

Providing ( collateral) - additional collateral (in addition to the securities already transferred), which can be contributed by the seller or buyer for the purpose of reducing the credit risk of the counterparty to the repo transaction and/or the fall in the market value of the transferred securities. Collateral is deposited in cash or securities into a separate account and is subject to adjustment before closing the position on the instrument. This parameter affects the calculation of the effective interest rate and the cost of the repo asset (liability) determined at initial recognition.

Margin requirement ( margin call) - the monetary requirement of the counterparty to a repo transaction to provide additional collateral in addition to the initially posted variation margin (for example, in the event of a significant increase or decrease in the market value of the securities pledged under the repo). This parameter affects the calculation of the effective interest rate.

Margin ( margin) (a distinction is made between initial and variation margin) - a collateral that must be paid by the company for the purpose of eliminating credit and market risk that arises as a result of:

Borrowing funds for the purpose of purchasing securities;

Short sale of securities;

Conclusion of a futures contract.

The margin is deposited in cash or securities into the company's margin account on the stock exchange (initial margin) and is subject to periodic adjustment until the position on the instrument is closed, depending on the market situation for the pledged securities (variation margin).

Margin may be required from either of the two parties to the repurchase agreement, but in a classic situation, as a rule, the initial margin is required from the “depositor” of the securities (i.e., the seller in the repo transaction), since the funds are still an order of magnitude more more liquid asset than even the highest quality securities that are supported by both credit and market risks. In practice, this often means not that the seller contributes additional funds at the time of the transaction, but that the securities he contributes are valued at a slight discount, usually from 2 to 5%, depending on the credit rating of the securities and their nominal maturity.

Credit risks in a repo transaction are borne by both parties (not just the buyer expecting a reverse cash flow) to each other. If the value of securities sold under repo falls, then the creditor’s risk increases due to the fact that the seller “will not want” to buy back the depreciated asset. On the other hand, if the value of securities increases, then the seller (i.e., the borrower under a repo transaction) faces the risk that the lender will be economically interested in resell the securities received as collateral to third parties on the open market and will subsequently fail to fulfill its obligations upon return of the paper to the seller. This situation may arise if the increase in the fair value of the security was significant and significantly exceeded the profit that the buyer would receive from the seller by returning the securities to him in exchange for a much lower cash amount. Thus, the borrower has the risk of losing profit from the expected increase in the value of the securities pledged by him.

As a rule, if the counterparty parties have approximately the same credit rating, then the initial margin may not be issued by either counterparty, and the variation margin will be required by one of the parties from its counterparty depending on the direction of movement of the market value of the security. In the markets of developing countries, the situation may be the opposite: there is no variation margin (since the parties do not rely on the fulfillment of obligations by the other party in conditions of market fluctuations unfavorable for the counterparty), however, the initial margin can reach 20-39% of the repo transaction amount (which is quite high level of collateral guaranteeing the execution of the transaction by the parties).

Effective interest rate ( repo effective rate) - an interest rate that provides accurate discounting in reality expected (this is especially important in impairment situations) the future cash flows of the repurchase transaction up to the amount of the repo asset (liability) determined at initial recognition of the instrument. The effective rate affects the amount of interest income for the buyer (or expenses for the seller) on a repo transaction.

Income from securities ( income) - interest income or dividends on securities - the subject of the transaction. Depending on the terms of the repurchase transaction, proceeds from the pledged securities received during the term of the repurchase agreement may be retained by the buyer of the securities or returned to the seller. This parameter affects the effective interest rate on a repo transaction.

Restrictions on the rights of the original purchaser- legal restrictions imposed on the buyer under a repurchase agreement regarding the pledge or sale of securities - the subject of the transaction.

Transaction currency and settlement currency- currencies in which the repo transaction itself and settlements under this transaction are denominated. These parameters affect the procedure for assessing repo assets and liabilities at the date of the transaction and their subsequent revaluation at the reporting date.

Non-recognition of sales in repo transactions and issues of derecognition of assets

Let's consider the theoretical justification that causes differences in the accounting of repo transactions in accordance with RAS and IFRS. According to the rules for derecognition ( derecognition) elements of the statements specified in paragraph 20 of IAS 39, financial assets are not subject to write-off from financial assets if they are sold to another party under any agreement if the original owner retains substantially all the risks and rewards associated with ownership of these assets. That is why transactions of sale (purchase) of securities with the simultaneous (in the same agreement) assumption by the seller of the obligation to repurchase them do not entail writing off the securities from the seller’s general financial statement and recognition of profit or loss on the transaction, but are reflected as attraction (or placement - with the buyer of securities) financing secured by securities.

The only exception to this rule is repo transactions in which the first part of the transaction amount is greater than the second. Such transactions (if not carried out between related parties or for tax optimization) are recognized in economic content as separate transactions, since they lose the commercial essence of ordinary repo transactions. That is, such transactions, despite their legal format, are not essentially repo transactions. In accordance with IFRS, such trading transactions in securities entail immediate recognition of the result at the time of each of the two parts of the transaction.

Typically, companies entering into repurchase agreements may have the following business objectives when entering into such transactions:

Providing a loan of funds secured by securities of the counterparty;

Obtaining a loan of funds secured by one’s own securities;

Lending your own securities with the obligation to repurchase them from the counterparty;

Borrowing securities with the obligation to sell them back to the counterparty.

From an economic point of view, all of the above transactions are accounted for as debt raising (provision) of funds secured by securities: direct repo is classified as raising a monetary loan secured by one’s own securities, and reverse repo is classified as providing a monetary loan (or issuing a loan for financial institutions ) secured by the counterparty's securities.

Classification of securities - subject of repo

As a rule, securities that are the subject of repurchase transactions are usually purchased by the seller before concluding a repurchase agreement, therefore their classification into classes and categories of financial assets is carried out on conditions common to all financial instruments. The exception is when a short position in securities occurs, which is closed by subsequent purchase of the same or similar financial assets. These instruments are classified (and upon sale under a repurchase agreement they become a “short position,” i.e., a liability) as trading financial liabilities, which are remeasured at fair value upon initial recognition and thereafter.

Equity securities

Typically, equity securities that are transferred to the counterparty under a repurchase agreement are classified as trading securities or securities at fair value through profit/loss. They may also be classified into category four (available-for-sale securities).

In exceptional cases, a repurchase transaction may transfer securities carried at historical cost (for example, investments in associates or other investments for which fair value cannot be determined reliably).

Debt papers

Debt securities that meet the classification criteria of IAS 39 are classified in Category 2 (held-to-maturity investments) unless they meet the definition of loans and receivables or are initially classified in Category 1 (securities at fair value). ).

Interestingly, the very fact of selling debt securities classified as held-to-maturity (HTM) under repurchase agreements does not violate this classification (despite the fact that the sale from the UDP portfolio took place - this is one of the features of repo). However, if, as a result of a repo transaction, the criteria for classifying securities as held-to-maturity investments are not met (for example, the seller does not have the ability or original intention to repurchase the debt securities), then they must be reclassified as securities held to maturity. available for sale in accordance with the rules of IAS 39.

Example 2

Let's consider a detailed example of accounting in a situation where the buyer under a repo transaction resold securities received from the seller on the market to a third party.

Example conditions:

A. On December 10, 2010, the Buyer company purchased 100,000 ordinary shares of Leicester from the Seller company at a price of RUB 3. per share with the obligation to resell them on January 10, 2011 at a price of RUB 3.03. per share.

Before this transaction, the specified block of shares in the OFP of the Seller company was part of the trading portfolio and had a book value of RUB 298,000.

B. On December 20, 2010, the Buyer company sold Leicester shares at open exchange trading at a price of 3.02 rubles. per share.

IN. The market price of Leicester's ordinary shares as of December 31, 2010 was RUB 2.99. per share.

G. On January 8, 2011, the Buyer company acquired 100,000 ordinary shares of Lester at a price of RUB 2.97 at exchange trading. per share in order to fulfill the obligation under the second part of the agreement specified in clause A.

D. On January 10, 2011, the Buyer company, in pursuance of the agreement specified in paragraph A, sold 100,000 ordinary shares of Leicester to the Seller company at a price of RUB 3.03. per share.

How should Buyer and Seller account for these transactions in accordance with IAS 39 Financial Instruments: Recognition and Measurement?

Let's consider the most likely accounting option on the part of both the seller and the buyer for each of conditions A-D.

I. Reflection of the repo transaction in the general financial statement of the company “Seller”

A. In accordance with IFRS, securities sold under a repurchase agreement are not written off from the seller's financial statement. This operation should be reflected as raising funds secured by securities:

CT“Short-term loans received under repurchase agreements” - RUB 300,000.

Operations B And G, described in the example conditions, are not reflected in the general physical specification of the Seller company.

IN. As of December 31, 2010, securities in the Seller's general financial statements are revalued at fair value. The market value of a package of 100,000 Leicester shares is 299,000 thousand rubles; Therefore, it is necessary to increase the cost of this package by the following amount:

299,000 - 298,000 = 1000 rubles.

Despite the physical and legal absence of Leicester shares from the Seller company, it records the following posting:

Dt“Trading securities pledged under repurchase agreements” - 1000 rubles.

CT“Unrealized income on trading securities” (in the profit and loss statement) - 1000 rubles.

The difference between the sale price of securities and the price for their repurchase under a repurchase agreement is considered as interest expenses paid on funds raised. Therefore, as of December 31, 2010, it is necessary to accrue interest expenses.

The difference between the sale price of securities and their repurchase price is equal to:

100,000 x (3.03 - 3.00) = 3,000 rub.

Accordingly, the interest rate on borrowed funds per year will be:

3000 / 300,000 x (365 / 31) = 11.8%.

Therefore, the amount of accrued interest expenses for the Seller company should be:

300,000 rub. x 11.8% x (21 / 365) = 2032 rub.

Then the accrual of interest expenses should be reflected in the following entry:

Dt“Interest expenses on repo loans” (in the operating statement) - 2032 rubles.

CT“Accrued interest expenses” (obligation in the general financial statement) - 2032 rubles.

D. Execution of the second part of the repo transaction in the general financial statement of the Seller company is reflected as repayment of debt to the Buyer company, while the remaining part of the interest expenses is reflected in the general financial statement:

Dt“Short-term loans received under repo transactions” - RUB 300,000.

Dt“Accrued interest expenses” (AIP) - 2032 rubles.

Dt“Interest expenses” (GPU, in part 2011) - 968 rubles.

II. Reflection of the repo transaction in the general financial statement of the Buyer company

A. In accordance with IFRS, securities purchased by buyers under a repurchase agreement are not reflected in the general financial statement. Therefore, the first part of the repo transaction (from the point of view of the Buyer company, this will be a reverse repurchase transaction) is reflected as the provision of funds secured by securities:

CT“Cash” - 300,000 rubles.

B. Since shares purchased under a reverse repurchase agreement are not reflected in the Buyer company’s general financial statement, their sale results in the creation of a “short position” on securities in an amount equal to the sale price of the block of shares, i.e. 100,000 x 3.02 rubles . = 302,000 rub. Such a “short position” from the point of view of IFRS is a trading financial liability:

Dt“Cash” - 302,000 rubles.

CT“Trading financial obligation” (short position on securities in reverse repo) - RUB 302,000.

IN. Under IFRS 39, trading financial liabilities are remeasured at fair value. The fair value of the short position in Leicester shares as of December 31, 2010 is equal to the market value of this package, i.e. RUB 299,000. (see above). Thus, as of December 31, 2010, it is necessary to reduce the trade financial liability in the amount of 302,000 - 299,000 = 3,000 rubles:

Dt“Trading financial obligation” (short position on securities in reverse repo) - RUB 3,000.

CT“Income from trade financial obligations” (TFO) - 3,000 rubles.

In addition, as of December 31, 2010, it is necessary to accrue interest on the funds placed (the amount is calculated in the same way as calculating the amount of accrued interest on funds raised in the general financial statement of the Seller company):

CT“Interest income on reverse repo loans” (RPL) - RUB 2,032.

G. The purchase of Leicester shares for the purpose of executing the second part of the reverse repurchase transaction results in the repayment of the trading financial obligation:

Dt“Trading financial obligation” (short position on securities) - RUB 299,000.

CT“Cash” - 297,000 rubles.

CT“Income from trade financial obligations” (TFO) - 2000 rubles.

D. Execution of the second part of the reverse repo transaction is reflected in the Buyer company’s general financial statement as repayment of the amount of funds provided, while the remaining portion of interest income is reflected:

Dt“Cash” - 303,000 rubles.

CT“Short-term loans issued under reverse repurchase agreements” - RUB 300,000.

CT“DZ on accrued interest income” (OIP) - 2032 rubles.

CT“Interest income on reverse repo loans” (OPU, in part 2011) - 968 rubles.

Description of other transactions, the economic essence of which similar or similar to repo transactions

In accordance with the established practice of conducting international financial markets, transactions of some of the following types may have an economic content similar to or similar in form to a repo transaction:

Pre-emptive right to repurchase at fair value ( repurchase right of first refusal at fair value).
Fictitious sale operation ( wash sale transaction).
Lending securities ( securities lending).
Put options and call options with very favorable strike prices ( put options and call options that are deeply in the money).
Put options and call options with very unfavorable strike prices ( put options and call options that are deeply out of the money).
Assets that are freely traded in the market in the presence of an option, the exercise price of which is not very profitable or very unprofitable ( readilyobtainable assets subject to a call option that is neither deeply in the money nor deeply out of the money).
A non-tradable asset in respect of which an entity has issued an option for which the exercise price is not very advantageous or very disadvantageous ( a not readily obtainable asset subject to a put option written by an entity that is neither deeply in the money nor deeply out of the money).
Assets that are the subject of a put option or call option at fair value or a forward repurchase agreement at fair value ( assets subject to a fair value put or call option or a forward repurchase agreement).
Final purchase options ( clean-up calls).
Total return swaps ( total return swaps).
Purchase and resale ( buy and sell-back).

Let us consider the main features of these transactions with financial assets, for which, as well as for repo transactions, it is necessary to resolve the issue of the need to derecognise transferred financial assets:

1. Preemptive right to repurchase at fair value. If an entity sells a financial asset and retains only the right of first refusal to repurchase the transferred asset at fair value if the transferee subsequently sells it, the entity derecognizes the asset because it has transferred substantially all the risks and rewards of ownership of the asset.

2. Fictitious sale operation. Buying back a financial asset soon after it has been sold is sometimes called a "wash" ( wash sale), i.e. a fictitious sale. Typically, such a sale is made for tax purposes, when, when selling a “losing” security, a loss is recorded, which helps reduce the tax base, and then almost simultaneously or with a short time gap (usually up to 30 days), the same financial asset is purchased at almost the same price its sales. To prevent such fraud, tax rules in most countries do not recognize such a sale. But under IFRS, in principle such a transaction does not prevent derecognition on the original sale, provided that the original transaction fully satisfied the criteria for derecognition. However, if an agreement to sell a financial asset is concluded almost simultaneously with an agreement to repurchase the same asset at a fixed price (or at the sale price plus the lender's income), then the recognition of this asset according to IFRS (as well as under tax rules) does not cease.

3. Lending securities - transactions securities lending. Securities lending- this is the transfer under an agreement for temporary use of securities associated with the subsequent return of these securities (or identical securities, if the agreement allows this).

In other words, using a contract like securities lending You can arrange to receive a loan of securities. Such an operation, for example, can be carried out to conduct a “short sale” in the hope that the market quotes of these securities will fall. In this case, the borrower of the securities ( borrower) after their initial, “expensive” sale on the market, closes its debt (the so-called short position) to the creditor, buying securities on the markets later at a lower price, and recognizes the difference as its profit from the transaction.

From the position of the creditor ( lender), i.e. the party transferring securities in the transaction securities lending, such an operation is a transaction to attract financing secured by securities. However, unlike repo transactions, which can be either exchange-traded or over-the-counter, the basis for the transaction securities lending is an agreement to lend securities only on the over-the-counter market. Such transactions are widespread in European and American investment practice.

In addition, in contrast to repo transactions, the legal relationship here arises not between the seller and the buyer of securities, but between the borrower of the securities and the lender (“issuer,” to use an analogy with the term “lessor”). In this case, the “pledged” securities are legally re-registered to their new “owner” (borrower) in the depository, since it is the borrower who bears the risk of unfavorable changes in their market value from the moment of receipt until the moment of return of the paper. For example, in the case of using a security for short sales, this risk will not be a decrease in the market quote of the security, but, on the contrary, its increase, since as a result of the operation securities lending The borrower of the security has not an asset, but a liability for this security, and it increases as the market price of this security increases.

The economic benefits associated with the legal registration of ownership at the date of loan of the security - for example, dividends, coupons and other similar payments - must be transferred back to the lender. In other words, the borrower has only a nominal legal right to receive these payments as the formal owner of the securities, and according to the agreement securities lending he is obliged to transfer the income received from the securities in favor of the creditor.

As a rule, when concluding a contract securities lending the securities lender waives its rights associated with ownership, such as voting rights, if the securities transferred are voting shares. If the lender wishes to vote on its loaned securities, then the terms of the agreement usually include a requirement for the borrower to return the securities to the lender on the voting date.

As is the case with repurchase transactions, many securities lending transactions are completed with the receipt of collateral to protect the lender of the securities from possible default of the borrower. Such security may be in the form of cash, other securities (in addition to those transferred under the main agreement) or other assets. Collateral can be provided either by a third party - the borrower's guarantor, or directly by the borrower himself. The collateral amount is immediately invested by the lender in money market instruments, and at the end of the transaction, the amount of funds is returned to the borrower, subject to the return of the originally borrowed securities.

Other common uses of trade formats securities lending are situations where it is necessary to close a short position existing in relation to a third (other) counterparty, or in complex financial structured transactions.

4. Put options and call options with very competitive strike prices. If a transferred financial asset can be called back by the seller and the call option has a very favorable exercise price, then the transfer of the financial asset does not qualify for derecognition because the transferor (seller) has retained substantially all the risks and rewards of ownership. asset.

Similarly, if a financial asset can be returned by the transferee (buyer) with a put option that has a very favorable exercise price, then the transfer does not qualify for derecognition because the transferor (seller) has retained substantially all the risks and rewards associated with ownership of an asset.

5. Put options and call options with very unfavorable strike prices. A financial asset that is transferred subject only to a call option held by the transferor or a call option held by the transferor that has a very disadvantageous exercise price is derecognised. This is because the transferor has transferred substantially all of the risks and rewards associated with ownership of the asset.

6. Assets that are freely traded on the market in the presence of an option, the exercise price of which is not very profitable or very unprofitable. If an entity holds an option to purchase an asset that is traded in the market and the exercise price of that option is not very profitable or very unprofitable, then the asset is derecognised. This happens because the company:

Has not retained or transferred substantially all the risks and rewards associated with ownership of the asset, and

Didn't maintain control.

However, if the asset is not freely traded in the market, derecognition is not made to the extent of the asset on which the call option is entered into because the entity retains control of the asset.

7. A non-traded asset in respect of which the entity has issued an option whose exercise price is not very profitable or very unfavorable. If an entity transfers a financial asset that is not publicly traded and also issues a put option whose exercise price is not severely unfavorable, the entity does not retain or transfer substantially all the risks and rewards of owning the asset because issued put option. An entity retains control of an asset if the put option is valuable enough to cause the transferee to refrain from selling the asset; however, the entity continues to recognize the asset to the extent of the transferor's continuing involvement. An entity transfers control of an asset if the put option is not valuable enough to cause the transferee to refrain from selling the asset; the entity ceases to recognize the asset.

8. Assets that are the subject of a put option or call option at fair value or a forward repurchase agreement at fair value. The transfer of a financial asset subject only to a put or call option or a forward repurchase agreement that has an exercise or repurchase price equal to the fair value of the financial asset at the time of repurchase results in derecognition because substantially all the risks and rewards are transferred. associated with asset ownership.

9. Final purchase options. The seller of financial assets may have an option to ultimately purchase the remaining transferred assets if the amount of assets outstanding falls to a certain level where the costs of servicing those assets become burdensome relative to the benefits of servicing. Provided that such an ultimate purchase option results in the entity not retaining or transferring substantially all the risks and rewards of ownership of the asset and the transferee being unable to sell the assets, it prevents derecognition only to the extent of the amount of the assets included in the asset. option to buy.

10. Total return swaps. An entity may sell a financial asset to a buyer and enter into a “total return swap” agreement, under which the entity receives all the interest cash flows on the underlying asset in exchange for a fixed payment or a variable rate payment, and the entity assumes all increases or decreases in the fair value of the underlying asset. In such a case, the entire asset must not be derecognised.

11. Transactions “purchase and sale back to the seller”. Operations “purchase and resale to the seller” are legally structured as two separate agreements (unlike a repo transaction, where there is one agreement) for the sale and purchase of securities, which are concluded simultaneously. In this case, the resale (purchase) price is usually calculated in accordance with market repo rates.

The buyer of securities receives legal ownership of them and retains all accrued interest and coupon payments for the entire term of the transaction. This circumstance distinguishes “purchase and resale to the seller” transactions from repo transactions and is taken into account when setting the resale (purchase) price. Buy-and-sell transactions are typically conducted for financing purposes and involve fixed income securities such as bonds.

The above examples of accounting for repurchase and reverse repurchase transactions, of course, provide only a simplified idea of the main entries that must be made to correctly present repurchase transactions in financial statements prepared under IFRS. In practice, accounts are “complicated” by the need to correctly calculate and display calculations associated with transactional calculations of coupon and dividend income, the impact on the recalculation of the effective interest rate of the initial and variation margin, as well as income and expenses associated with the further resale of securities acquired under the agreement repo; create reserves, if necessary, when credit and/or market risks in a transaction increase; take into account the “net” or “gross” nature of settlements between counterparties and other factors.

A company that begins to participate in transactions on the repo market needs to develop detailed methods for accounting and correspondence of accounts in standard transactions, taking into account the above-mentioned nuances of repo transactions, and also supplement its accounting policies according to IFRS accordingly.

Short sale ( short sale) - the sale of securities borrowed from a third party (broker, client, counterparty) with the intention of buying them later on the market in anticipation of a lower price.

In investment activities, agreements with an obligation to repurchase, also called repurchase agreements, have become widespread. REPO transactions are one of the instruments of the securities market. However, there is no such concept in civil law. In this article, specialists from the Ortikon company will talk about the features of accounting for repo transactions, as well as the existing experience in automating such operations using the example of implementing a program on the 1C:Enterprise 8 platform in the Financial Company Russian Investment Club LLC.

Methodology for accounting for repo transactions

There is no definition of a repo transaction in civil law. It can only be found in the regulatory documents of the Bank of Russia and the Tax Code of the Russian Federation.

At its core, a repo is a transaction for the sale of securities with an obligation to repurchase them in the future.

Thus, a repo transaction consists of two parts: the sale and repurchase of securities. The repurchase - the second part of the repo - must be made at a pre-agreed price. The buyback price is determined, as a rule, at the time of sale (the first part).

From an economic point of view, repo transactions in most cases are the provision of a loan secured by securities. The difference between the first and second parts of the transaction is the so-called interest paid for the use of funds. Therefore, the financial result from REPO transactions for tax purposes is determined not separately for each part, but in total for both parts, i.e. during the second part of the transaction, and is calculated as the difference between the sale price and the repurchase price.

The procedure for taxation of repo transactions is determined by Article 282 of the Tax Code of the Russian Federation. With the adoption of Federal Law No. 58-FZ dated 06.06.2005, it underwent some changes. On April 13, 2006, the Russian Ministry of Finance issued letter No. 03-03-02/84, in which it explained in detail the taxation procedure for such transactions. In accordance with Article 282 of the Tax Code of the Russian Federation, REPO transactions are understood as two interrelated transactions concluded simultaneously for the sale and subsequent acquisition of issue-grade securities of the same issue in the same quantity, carried out at prices established by the relevant agreement.

Thus, if the subject of a repo transaction is non-issued securities or if the obligations under the second part are not fulfilled, such a transaction is not recognized as a repo transaction, but qualifies as two transactions for the purchase and sale of securities, taxation of which is carried out in accordance with Article 280 of the Tax Code of the Russian Federation.

Reflection of transactions on the first part of the repo

In accounting in accordance with PBU 19/02, accounting options accepted in the accounting policy of the organization are possible: by average, FIFO, LIFO, by accounting unit.

In the accounting records of the seller's organization, REPO sales transactions are reflected as follows:

Debit 51 “Current accounts” Credit 66.03 “Short-term loans” - funds received to the current account; Debit 76.10 “Settlements on securities” Credit 58 “Financial investments” - transfer of securities from the portfolio to repo at the book price; Debit 76.10 “Settlements on securities” Credit 58 “Financial investments” - transfer of a coupon from a portfolio to a repo at the book price.

Reflection of REPO purchase transactions in the accounting records of the buyer’s organization:

Debit 58.03 “Loans provided” Credit 51 “Current accounts” - loan received; Debit 58 “Financial investments” Credit 76.10 “Settlements on securities” - securities were received at the price specified in the purchase agreement; Debit 58 “Financial investments” Credit 76.10 “Securities settlements” - a coupon was received at the price specified in the purchase agreement.

Reflection of transactions on the second part of the repo

For the second part of the transaction, the following entries will be made in the accounting records of the seller’s organization:

Debit 66.03 "Short-term loans" Credit 51 "Short-term loans" - loan repaid; Debit 58 “Financial investments” Credit 76.10 “Settlements on securities” - transfer of securities from repo to portfolio; Debit 58 “Financial investments” Credit 76.10 “Settlements on securities” - transfer of a coupon from a repo to a portfolio; Debit 91.1 “Other income” (91.2 “Other expenses”) Credit 76.10 “Settlements on securities” - interest accrued on repo (the difference between the first and second part of the repo).

The transactions of the buyer's organization will be reflected in the following transactions:

Debit 51 “Current accounts” Credit 58.03 “Loans provided” - funds received to the current account; Debit 76.10 “Settlements on securities” Credit 58 “Financial investments” - transfer of securities from the portfolio to repo at the book price; Debit 76.10 “Settlements on securities” Credit 58 “Financial investments” - transfer of a coupon from a portfolio to a repo at the book price; Debit 76.10 "Settlements on securities" Credit 91.1 "Other income" (91.2 "Other expenses") - interest accrued on repo (the difference between the first and second part of the repo).

Both the seller and the buyer must maintain a register of repo transactions separately for each agreement.

The seller's organization reflects:

date of sale and cost of securities sold;
date of redemption and price of securities.

The buyer's organization reflects:

date of purchase and cost of purchased securities;
date of sale and price of securities.

Automation of REPO transactions accounting

Let's consider the issue of automating the accounting of a separate area for repo transactions using the example of implementing the 1C:Enterprise 8 system in an investment company carrying out such transactions, in particular, under trust management agreements.

To automate accounting and tax accounting for transactions with securities, a specialized industry solution "Ortikon: Financial Investments" was selected, intended for joint use with the software product "1C: Accounting 8", which implements the above methodology for accounting for financial investments.

The investment company had certain requirements for the automation of the area for repo transactions:

Automatic generation of accounting and tax accounting entries in accordance with legal requirements for repo transactions.
Automatic calculation of the cost of written-off securities.
Automated determination of the conditions of the second parts of transactions.
Maintaining registers for repo transactions.

To automatically calculate costs and generate accounting and tax accounting entries for repo transactions, a number of documents and processing have been added.

The sale of securities in REPO is registered using the document: “Disposal in REPO” (see Fig. 1).

Rice. 1. An example of the first part of a repo transaction. Selling in REPO.

This document automatically generates the appropriate accounting and tax accounting entries according to the scheme described above.

For accounting of securities, the program provides the ability to maintain batch accounting using the FIFO, LIFO, and “average” methods.

For tax accounting purposes, batch accounting can be maintained using FIFO and LIFO methods. There is an option for keeping records of financial investments by accounting unit.

Methods for determining cost are established in the accounting policies of the organization.

To carry out the second part of the repo for this transaction, there is a document “Repurchase” (see Fig. 2).

Rice. 2. An example of the second part of a repo transaction. Buyback.

To automatically fill out the terms of the transaction, just select the counterparty and the agreement under which the second part of the transaction is carried out, and click on the “Selection for repurchase” button.

The purchase of securities in a REPO is reflected in the document “Purchase of REPO” (see Fig. 3).

Rice. 3. An example of the first part of a repo transaction. REPO purchase.

To carry out the second part of the repo for this transaction, there is a document “Repurchase” (see Fig. 4).

Rice. 4. An example of the second part of a repo transaction. Reverse sale.

After this, transactions according to the specified conditions will appear in the upper tabular part of the document.

This table part can be edited. Also, during the second part of the transaction, additional expenses (commissions) are possible.

They must be entered in the lower tabular part of the “Commission” document.

According to the letter of the Ministry of Finance of Russia dated April 13, 2006 No. 03-03-02/84, participants in a repo transaction have the right to change the date of the second part of the transaction, either towards a reduction or an increase. The main thing is that the final period between the first and second parts of the transaction does not exceed one year. To extend the term of the second part of the repo, you must use the document “Amendment of the repurchase agreement” (see Fig. 5).

Rice. 5. An example of extending the term of a repurchase agreement.

At any given time, the user has the opportunity to create registers for repo transactions.

Thus, automation made it possible to quickly solve the problems of conducting a large number of repo transactions and analysis for constant monitoring of the second parts of transactions.

Also read the article “Automation of accounting for financial investments in a management company” in issue 9 (September) of “BUKH.1S” for 2005, page 13.

Accounting for repurchase agreements. Accounting and taxation of securities and shares Reflection of repo transactions in accounting

Methodical recommendations
“On the accounting procedure for repurchase agreements”

Chapter 1. General provisions

Chapter 2. Accounting for repurchase agreements with the original seller

Chapter 3. Accounting for repurchase agreements with the original buyer

Information for posting on the official website of the Bank of Russia the draft methodological recommendations “On the accounting procedure for repurchase agreements”

Non-recognition of sales in repo transactions and issues of derecognition of assets

Classification of securities - subject of repo

Description of other transactions, the economic essence of which similar or similar to repo transactions

Methodology for accounting for repo transactions

Reflection of transactions on the first part of the repo

Reflection of transactions on the second part of the repo

Automation of REPO transactions accounting

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