ACCOUNTING TREATMENTS RELATED TO ACCOMMODATION AND COMPLEMENTARY

Transcription

1 Finances - Accounting ACCOUNTING TREATMENTS RELATED TO ACCOMMODATION AND COMPLEMENTARY SERVICES PROVIDED BY A HOTEL UNIT IN ROMANIA Lect. Sorin-Constantin Deaconu PhD Faculty of Science University 1 Decembrie 1918 of Alba Iulia Alba Iulia, Romania Abstract: These The main goal of the economic activity in the hotel industry is the provision of services to meet customer needs in the best conditions and at a high level of service quality. The paper contains a series of case studies that highlight the accounting treatment of the main operations related to the accommodation activity in various situations: the price of breakfast included in room rates; collecting the mountain rescue tax and the resort tax from tourists staying in tourist areas, etc. Our approach aims to outline the complexity of the accommodation activity and of complementary services in a hotel. JEL classification: M41, M21 Key words: accommodation; accounting treatment; complementary services; revenue; hotel 1. INTRODUCTION Through their content, accommodation services aim to create conditions and comfort for housing and resting travelers. The National Institute of Statistics defines the concept of tourist reception unit with tourist accommodation functions as being any construction or establishment that provides permanent or seasonal accommodation and other specific services for tourists 32. Accommodation is the main function of hotel units, regardless of size, type, comfort level and endowment level. It implies the existence of an area and of the necessary equipment to ensure rest and hygiene conditions for the traveler. The content of this service is determined by the fact that the accommodation objective fulfils the role of temporary home for the tourist, therefore having a complex functionality. Among the category of complementary hotel services, which round the accommodation function, can be mentioned: mail services (telephone, telex, telegraph, etc.), currency exchange services, storage of valuables, washing and ironing laundry, cleaning clothes and footwear, repair services, baggage handling, parking, providing rooms with extra inventory on demand. Fiscally speaking, the following specifications should be made about accommodation activities: Accommodation in the hotel sector or in sector with similar functions is subject to the reduced VAT rate of 9%; 32 November

2 Revista Tinerilor Economişti (The Young Economists Journal) Hotel units collect from tourists the mountain rescue tax and the hotel tax ( resort tax ) which are transferred to the local budget. Taxpayers and state authorities should manifest a keen interest for housing and complementary services. 2. OBJECTIVES The purpose of this paper is to highlight the different accounting treatments for accommodation activities when breakfast is included in room rates, as well as when it isn t included. It also aims the accounting treatment of the resort and mountain rescue taxes, which are owed by tourists and collected by hotel units in order to be transferred to the local budget. 3. METHODOLOGY The methodological approach used in this paper was carried out by turning to different methods, techniques, procedures for investigating the accommodation activity and the complementary services provided by a hotel unit. Specifically, in this paper, the research methodology may be summarized as follows: bibliographic documentation (specialized literature, legislation, articles indexed in various databases), direct documentation (we studied the data of practical reality, namely specific documents, such as: services and settlements statements, mountain rescue tax accounts, etc.), documentation obtained through contacts with experts (we conduced discussions and we requested information from a number of experts, such as: professors who specialized and conducted internships in this area, hotel managers, economists working in hotels in various resorts). 4. BASIC ACCOUNTING TREATMENTS RELATED TO ACCOMMODATION Specifically, we ll present a few examples of accounting reflection for accommodation activities, breakfast, as well as other complementary services provided by S.C. Hotel S.A. Given the various ways to provide services, namely accommodation, services complementary to accommodation, catering (kitchen, serving meals, bar, butchery), complementary services, S.C. Hotel S.A. uses analytical accounts for a better management of resources. Thus, for the accommodation activity, S.C. Hotel S.A. uses the following analytical accounts: Net turnover from services rendered 9%; Sales of goods purchased for resale (breakfast) 9%; Sales of goods purchased for resale 24%; Output VAT for revenue with a rate of 9%; Output VAT for revenue with a rate of 24%. a) The accounting treatment of accommodation when the price of breakfast is included in room rates: On N, S.C. Hotel S.A. issued invoice no for hotel services provided to S.C. Client S.R.L. The invoice included: the accommodation fee in the amount of lei (VAT included); breakfast is included in the accommodation fee and amounts to 120 lei (the price of one breakfast = 20 lei, VAT included 9%). The goods purchased for resale as breakfast were bought at the price of 80 lei. 42

3 704.1 Net turnover from services rendered Sales of goods purchased for resale Output VAT 9% Finances - Accounting 1.200,00 990,83 110, ,08 34 The income from breakfast is reflected separately, because the discharge operation must also be conducted: 607 Expenses with goods for resale = 371 Goods purchased for resale 80 Theoretically speaking, the value of breakfast is subjected to a 24% VAT rate, but in practice, we apply a VAT rate of 9%. b) The accounting treatment of accommodation when the price of breakfast isn t included in room rates: In certain situations, the hotel provides accommodation services without including the price of breakfast in room rates. Thus, using the same example from above, the invoice issued for accommodation services will be registered in accounting as follows: Net turnover from services rendered Output VAT 9% 1.200, ,92 99,08 35 c) The accounting treatment of accommodation when customers (natural persons and/or legal persons) use services complementary to accommodation: On N, S.C. Hotel S.A. issued an invoice for hotel services to Popescu Dan, the delegate of S.C. Client S.R.L., which includes the following: The accommodation fee for one day in the amount of 300 lei; Minibar products worth of 19 lei; Telephone calls worth of 7,5 lei. The accounting recording of the accommodation bill and of the minibar products: Net turnover from services rendered Sales of goods purchased for resale Output VAT 9 % Output VAT 24% 319,00 275,23 15,33 24, , ,91 = 110,09 lei x 9/109 = 99,08 lei x 9/109 = 99,08 lei x 9/109 = 24,77 lei x 24/124 = 3,67 lei 43

4 Revista Tinerilor Economişti (The Young Economists Journal) Cash receipts of the previous bill, as well as the encashment of the value of telephone calls made from the hotel room: 5311 Petty cash in lei = % 4111 Customers 708 Revenues from sundry activities Output VAT 24 % 326,50 319,00 6,05 1,45 38 d) The accounting treatment of accommodation when customers use complementary services, as well as additional services of the hotel: S.C. Hotel S.A. issued invoice no to S.C. Client S.R.L. on N which included: Accommodation fee in the total amount of lei; Landry and cleaning services are included in the room rate; Conference room rental for 3 hours (1 h = 100 lei); Access to the leisure complex (the price is included in the room rate) Net turnover from services rendered 706 Rental and royalty income Output VAT 9 % Output VAT 24% 5.300, , , , ,06 43 e) The accounting treatment of additional services used by people who are not accommodated at the hotel: On N, a pool subscription is issued for Popescu Ion according to invoice no , based on the rates practiced by the hotel for access to the leisure complex (340 lei, VAT included): 708 Revenues from sundry activities Output VAT 24 % 340,00 274,19 65,81 f) The accounting treatment of the mountain rescue and resort taxes: On, N, the hotel collects from Lupsan Ion, a tourist staying at S.C. Hotel S.A., room 226, the mountain rescue tax in the amount of 6 lei and the resort tax in the amount of 7 lei. The required operations are: recording the encashment of the mountain 38 7,5 x 24/124 = 1,45 lei = lei ,84 = 4.587,16 lei ,06 = 241,94 lei x 9/109 = 412,84 lei x 24/124 = 58,06 lei 44

5 Finances - Accounting rescue and resort taxes; transferring the mountain rescue and resort taxes to the local budget. Recording in the day-book the amount of 13 lei, which represents the mountain rescue and resort taxes: 5311 Petty cash in lei = 446 Other taxes and similar liabilities Other taxes and similar liabilities. Mountain rescue Other taxes and similar liabilities. Resort Paying the mountain rescue and resort taxes: 446 Other taxes and similar liabilities Other taxes and similar liabilities. Mountain rescue Other taxes and similar liabilities. Resort = 5311 Petty cash in lei CONCLUSIONS Tourism involves several activities, namely: transport, accommodation, catering and other complementary activities that require different accounting treatments. Besides the actual activity of travelling, tourism also includes the tourism industry represented by all entities and endowments meant to produce tourism services, such as: accommodation means and services, catering units and services, transport, tourist information offices, travel agencies, vehicles and sports equipment rental, etc. In statistical terms, the activity of hotels and restaurants account for 1.6% of the Gross Domestic Product, which represents a small share compared to the tourism potential of Romania. This is why we believe this percentage should increase significantly through auditing measures taken by the government for the amounts cashed in by the entities that provide accommodation services and complementary services. From an accounting perspective, the accommodation activity is reflected differently when breakfast is included in the room rate or when it isn t included. In case the breakfast is included in the accommodation fee, we suggest that hotel units comply with Law 571/2003 regarding the Fiscal Code, meaning to collect VAT for breakfast at a rate of 24% and not 9% as it is done in practice. Also, complementary services are reflected differently in accounting, depending on the needs of tourists. Regarding the mountain rescue tax and the resort tax, they are reflected in accounting as an encashment, as well as a liability to the local budget. For simplicity, we propose to the Romanian regulator a unitary VAT rate of 9% for all the services provided in the hotel industry, thus collecting more revenue to the state budget (and the provisions of the Fiscal Code are not violated by using the 9% rate instead of the 24% rate). Fiscal relief, particularly in the area of the value-added tax, lead only to positive medium and long-term effects, because part of the gray economy 45

6 Revista Tinerilor Economişti (The Young Economists Journal) will become legal and the consumption of accommodation and complementary services will be stimulated. REFERENCES 1. Mattimoe, R., Seal, W. Pricing in a Service Sector Context: Accounting and Marketing Logics in the Hotel Industry. European Accounting Review, * * * 3. * * * The Order no. 3055/2009 concerning approve the accounting regulations according with the Directive European, Official Journal no. nr. 766 bis/ * * * The Law no. 571/2003 regarding the Fiscal Code with the further amendments and completions, Official Journal no. 927/