Accounting and Taxation of Insurance Operations at Agricultural Enterprises

Agricultural insurance is one of the possible options to hedge pertinent agricultural risks along with the development of transparent financing instruments in agriculture, thereby fostering growth and development of the Ukrainian food market. Agricultural insurance is not limited to crop insurance, it also applies to livestock, bloodstock, forestry, aquaculture, and greenhouses. The use of insurance instruments by an agricultural enterprise causes the occurrence of expenses and income associated with insurance operations. The purpose of the article is to substantiate the principles of accounting for operations on agricultural insurance and the disclosure of taxation of the components of insurance process. The reasons for the low popularity of crop insurance among agricultural producers were disclosed. It was determined that the accounting for insurance operations in agricultural enterprises is based on the reflection of settlements between the insurer and the insurance company. The main objects of accounting are receivables and payables, income and expenses. It was proved that insurance premiums should first be reflected on account 39 “Deferred expenses”, and subsequently written off to expense accounts during the term of the insurance contract because the insurance premiums are usually paid in advance. Some aspects of the reflection in accounting of expenses incurred for voluntary insurance of agricultural products, including those with state support, were disclosed. The rules of taxation of insurance compensation were investigated. It was revealed that the amount of insurance compensation received by the agricultural producer from the insurance company is not subject to value added tax, but is subject to the usual rules for determining income tax.