Accounting for volume bonuses on purchases

Buyers and suppliers often wrongly record bonuses for reaching a purchase volume as other income and expenses of the current period.

Under PBU 9/99, if a contract grants the buyer a discount once it meets conditions set out in the contract, the seller recognises revenue under that contract net of the discount. All discounts are taken into account, whatever form they take.

Under Federal Accounting Standard FSBU 5/2019 "Inventories", the amounts paid and/or payable by an organisation on acquiring (creating) inventories are included in their actual cost net of all discounts, allowances, deductions, bonuses and concessions granted to the organisation, whatever form they take.

Volume bonuses therefore reduce revenue for the supplier and the cost of acquiring inventories for the buyer.

If the bonus documents are received after the annual financial statements have been approved, the treatment depends on whether the information about the bonus was available on the date the financial statements were signed (clause 2 of PBU 22/2010):

• if it was (the contract terms and the purchase volume reached were known), this is an error: a material error is corrected through retained earnings (accumulated loss), an immaterial one within other income or expenses of the current period;
• if it was not, this is not an error: the bonus is recorded in the accounts of the current period.