Transportation Accounting

TRANSPORTATION ACCOUNTING
1. INTRODUCTION TO THE SECTOR
Transportation, a means of transferring people or goods from one place to another, is at the service of the
public interest and includes all the means and infrastructure involved in the movement of people or goods,
as well as the services of reception, delivery and handling of such goods.
Transportation infrastructures are the roads on which vehicles circulate: roads, railways, stations, tunnels,
bridges, canals, ports, airports and others.
Every day millions of movements of people and goods take place in the world. Economic activities are
favored if the means of transportation are good, fast, safe and cheap.
The transportation of people is classified as: passenger service and that of goods as merchandise service.
2. IMPORTANCE
Transportation plays a decisive role in the economic growth and development of a country, as throughout
the world, transportation is and has been in Latin America a central element for the progress or
backwardness of different civilizations and cultures.
The increase in tourism has made it possible to enhance the transportation service and improve its quality.
This demand is increasingly demanding and sophisticated, seeking quality and good prices when traveling.
It should be added that the improvement in the quality of transportation has also been influenced by the
strong competition that exists in this market, which has generated the need to differentiate its products by
reducing costs and offering higher quality.
3. ASPECTS THAT ARE EVALUATED TO OPT FOR A TRANSPORTATION SERVICE

There are several factors why a passenger takes the services of one or another transportation company,
among these we can mention the most outstanding:
• Quality of service
• Price
• Punctuality, due to the schedules and times of departure and arrival
• Space
• Comfort
• Cleaning
4. DIFFERENT MODES OF TRANSPORTATION

The means of transportation must be effective, that is, they must be able to transport people or goods over
short or long distances, at the lowest cost and in the shortest time possible.
To do this, they must have the necessary infrastructure (good routes, deep-water ports, airports, etc.) and be
permanently modernized, adapting them to the needs of world trade.
In general, five modes of transport are used:
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a) Water
b) By highway
c) iron
d) aerial
e) Pipeline
4.1. AQUATIC TRANSPORT

The early improvement of water transportation was stimulated by the tendency of populations to
concentrate on coasts or waterways. The construction of ships and the rigging and manipulation of sails
improved over time, with these changes, together with the adoption of the marine compass, making
navigation in the open sea possible without sighting the coast.
The first transportation routes in the colonies were natural waterways, and the most efficient modes of
travel were by boat.
Wooden steamboats began sailing about 200 years ago, alongside ancient sailing ships powered by wind
and oars. The ships are always large ships.
Currently there are motor ships, made of metallic material, and sophisticated technology, high comfort for
the passenger and maximum safety for the transportation of cargo on all seas, among these we can
mention merchant ships, oil tankers, battleships, cruise ships and others.
Water transport can transport very heavy goods for a cheap price, due to the time because they take
longer to reach their destination.
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4.2. ROAD TRANSPORT

Land transport developed more slowly, but without a doubt road transport is the most used by travelers
around the world. In developed countries the roads are very good (they are paved and paved) and connect
all cities and towns: there are numerous highways or highways.
Currently, many Latin American countries have more or less acceptable road systems, with Argentina,
Brazil and Mexico being the countries with the greatest number of kilometers of improved and paved
roads.
The means of road transport are cars, buses, vans, trucks and others are the main means of road
transport. These vehicles circulate on roads and cross bridges and tunnels when the relief is abrupt.
In cities, the automobile generates numerous problems: environmental pollution, traffic jams, noise,
parking problems, traffic accidents and others.
4.3. RAIL TRANSPORT

Rail transport is safer, allows the transport of a greater amount of goods and does not pollute the
environment as much.
In some large cities you can travel by metropolitan (metro): it is an electric railway with several cars that
runs underground (although sometimes it goes outside). It has several lines and stops at numerous
underground stations. It is usually faster than public buses and private cars that travel on the surface.
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The metropolitans of New York, London, Moscow and Paris are famous. In Caracas, Buenos Aires and
Mexico City there is also a subway. In Spain, the cities that have a metro are Madrid, Barcelona, Bilbao
and Valencia.
4.4. AIR TRANSPORT

Air transport is the most rapidly developing form of modern transportation. The plane is the fastest means
of transportation, as it covers long distances in a short time.
When planes land they need special infrastructure called airports and (smaller) airfields. In these places
there are landing and take-off runways, hangars (they are airplane garages), passenger terminals, and
control towers from where air traffic is organized.
Planes follow invisible paths called air routes, which appear drawn on aeronautical charts and on the
modern instruments used by pilots in the aircraft cockpits.
Commercial airplanes, small planes, fighters, helicopters, seaplanes, balloons, gliders and others are
means of transportation that circulate through the air. Rockets and shuttles are considered space vehicles.
4.5. TRANSPORTATION BY OIL PIPELINE

Although pipelines for water distribution have been used since ancient times, oil pipelines did not appear
until after 1859, with the discovery of oil near Titusville, Pennsylvania. By 1872 they were a major player
in the oil business, providing specialized transportation for liquefied products, including gas and
pulverized coal. Although they only transport this type of products, oil pipelines participated in 20% of the
total transportation.
In Spain, this mode of transport is becoming increasingly important due to the extension of a nationwide
gas distribution network from Europe and North Africa.
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Pipelines are enormous, long pipes used to transport oil from oil fields to refineries, consumption centers
and shipping ports. Gas pipelines are built for natural gas.
5. COST FOR EXPLOITATION OF SERVICES

The different costs that originate the operations of the transportation sector are summarized in three elements,
which are:
a) Materials and Spare Parts , among these we can mention: the cost of fuel used by vehicles, tires,
rings, pistons and others.
b) Direct Labor includes the remuneration of service personnel such as drivers and assistants, including
employer social obligations.
c) Miscellaneous Transportation Expenses are the elements necessary to provide the transportation
service, but that cannot be identified as Materials and Spare Parts or Direct Labor.
Transportation companies determine the service, systematically and rationally accumulating the different costs
related to the provision of the service, which are identified according to the cost elements, such as:
COMPOSITION OF THE COST FOR THE EXPLOITATION OF SERVICES
6. TAX ASPECTS FOR TRANSPORTATION COMPANIES

Transport companies are required to pay at least the following national taxes:
• Value Added Tax (VAT),
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• Transaction Tax (IT),
• Business Profits Tax (IUE).
At the same time, they are obliged to act as withholding agents for RC - VAT, IUE. and IT in accordance
with what is stipulated by law.
In relation to VAT and according to Law 317 of the General State Budget Management 2013, gasoline or
diesel oil invoices generate VAT Tax Credit of only 70% of the purchase value.
For the transportation sector, it is good to analyze the Regulatory Resolution of the Board of Directors No.
10-0019-16, which refers to purchases linked to the taxed activity of the interdepartmental and
international passenger and cargo transportation sector. This regulation is from the month of June 2016.
and its purpose is to establish definitive purchases, acquisitions or imports, contracts for works or services
and any other benefit or input of any nature that are considered linked to the activity of interdepartmental
and international transportation of passengers and cargo, to be computed as Tax Credit in the
determination of the Value Added Tax.
And specifically for the international cargo transportation sector, it is prudent to analyze the following
regulations:
• Law No. 3249

• Supreme Decree No. 28656
• Regulatory Resolution of the Board of Directors No. 10-0012-06
• Regulatory Resolution of the Board of Directors No. 10-0038-13
They establish ZERO VAT RATE - International Cargo Transportation, as well as the requirements and
procedures to follow to operate under that modality.
7. PLAN OF ACCOUNTS
Below is a model chart of accounts for a construction company which can be complemented according to
the requirements and characteristics of each particular construction company.
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1 ASSET 2 PASSIVE
11 CURRENT ACTIVE 211 CURRENT LIABILITIES

111 CURRENT ASSETS 210.01 Accounts payable
111.1 Box 210.02 Documents to pay
111.01.1 National Currency Box 210.02.01 Documents to Pay National Currency
111.01.2 Foreign Currency Box 210.02.02 Documents to Pay Foreign Currency.
111.2 Petty Cash 210.03 Advances Received (Transp. Load)
111.3 Banks 210.04 VAT Tax Debit
111.03.1 National Currency Banks 210.05 Salaries and Wages Payable
111.03.2 Foreign Currency Banks 210.06 Withholdings v Oblig. Social to Pay
210.06.01 Employer Contributions Payable
112 REQUIRED ASSET 210.06.02 Labor Contributions Payable
112.01 Accounts Receivable 210.07 Taxes to pay
112.02 Documents Receivable 210.07.01 Transaction Tax Payable
112.03 Advances to Personnel 210.07.02 Imp. About Emp Utilities. to pay
112.04 Personal Loans 210.08 Withholdings payable
112.05 VAT Tax Credit 210.08.01 IT Withheld Taxes
112.06 Interest Receivable 210.08.02 IUE Withheld Taxes
112.07 Commissions Receivable 210.08.03 RC-VAT Withheld Tax
112.08 Other Accounts Receivable 210.09 Provision for Bonuses
210.10 Interest Payable
113 REALIZABLE ASSET 210.11 Rents to Pay
113.01 Stock materials 210.12 Commissions to Pay
113.02 Fuel Warehouse. and Lubricants 210.13 Short-term Bank Loans
113.03 Spare Parts and Accessories Warehouse 210.14 Other Accounts Payable
113.04 Office supplies 210.14.01 Creditors for Professional Services
210.14.02 Basic services
12 NON-CURRENT ASSET 210.14.03 Several
121 FIXED ASSETS 211 NON-CURRENT LIABILITIES

121.01 Land 211.01 Provision for Social Benefits
121.02 Buildings 211.02 Allowance for Bad Debts
121.03 Furniture and Appliances 211.03 Mortgages to pay
121.04 Vehicles 211.04 Accumulated Dep. Buildings
121.05 Computing team 211.05 Accumulated Department of Furniture and
121.06 General Machinery 211.06 Appliances
Accumulated Dep. Vehicles
121.07 Tools in General 211.07 Accumulated Dep. Computer Equipment
211.08 General Machinery Accumulated Dept.
122 OTHER ASSETS 211.09 Dep. Accumulated Tools in General.
122.01 Telephone Investments
122.02 Fixed Term Deposits 3 HERITAGE
122.03 Inversions in actions 310.01 Social capital
122.04 Bond Investments 310.02 Capital Adjustment
122.05 Organization Expenses 310.03 Adjustment of Patrimonial Reserves
122.06 Advance Paid Insurance 310.04 Legal Reserve
122.07 Prepaid Interest 310.05 Reserve for Technical Revaluation
122.08 Prepaid Rentals 310.06 Accumulated results
122.09 Other Prepaid Expenses 310.07 Management Results
122.10 Materials in Transit
122.11 Machinery and Equipment in Transit
122.12 Works under construction
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4 INCOME 6 COST ACCOUNTS
41 ORDINARY INCOME 600 COST PER EXPLOITATION OF

410.01 Income from Passenger Transportation SERVICES
410.02 Income from Freight Transportation 600.01 Materials and Spare Parts
410.03 Entry by Transp. of Encomiendas 600.02 Direct Labor
600.03 Various Transportation Expenses
42 EXTRAORDINARY INCOME 600.03.01 Indirect labor
420.01 Gain on Sale of Fixed Assets 600.03.02 Production Insurance
420.02 Perceived Rents 600.03.03 Vehicle Depreciation
420.03 Commissions Earned 600.03.04 Machinery and Equipment
420.04 Perceived Interest 600.03.05 Depreciation of General Tools.
420.05 Storage 600.03.06 Production Work Clothes
420.06 Adjustment for inflation and Property 600.03.07 Production Travel Allowance
420.07 Value Maintenance 600.03.08 Electrical Energy Production
420.08 Exchange rate 600.03.09 Production Cleaning Service
420.09 Other income 600.03.10 Repair and Maintenance of production
600.03.11 Tolls
5 EXPENSES 600.03.12 Other Production Expenses
510 OPERATING COSTS

510.01 Salaries v Salaries
510.02 Building Depreciation
510.03 Depreciation of Furniture and Appliances
510.04 Computer Equipment Depreciation
510.05 Insurance
510.06 Basic services
510.06.01 Electric power
510.06.02 Water and Sewer
510.06.03 Telephone service
510.07 Punishment Organization Expenses
510.08 Bad Debt Accounts Penalty
510.09 Rentals
510.10 Repair and Maintenance
510.11 Publicity and propaganda
510.12 Used Office Supplies
510.13 Bank interest
510.14 Bench Commissions
510.15 Transaction Tax
510.16 Professional fees
510.17 General expenses
52 EXTRAORDINARY EXPENDITURE
520.01 Adjustment for inflation and Property
520.02 Ownership
Value Maintenance
520.03 Exchange rate
520.04 Loss on Sale of Fixed Assets
520.05 Profit and loss
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TRANSPORTATION ACCOUNTING

3. ASPECTS THAT ARE EVALUATED TO OPT FOR A TRANSPORTATION SERVICE

4. DIFFERENT MODES OF TRANSPORTATION

In general, five modes of transport are used:

4.1. AQUATIC TRANSPORT

4.2. ROAD TRANSPORT

4.3. RAIL TRANSPORT

4.4. AIR TRANSPORT

4.5. TRANSPORTATION BY OIL PIPELINE

5. COST FOR EXPLOITATION OF SERVICES

COMPOSITION OF THE COST FOR THE EXPLOITATION OF SERVICES

6. TAX ASPECTS FOR TRANSPORTATION COMPANIES

• Value Added Tax (VAT),

• Law No. 3249

11 CURRENT ACTIVE 211 CURRENT LIABILITIES

121 FIXED ASSETS 211 NON-CURRENT LIABILITIES

41 ORDINARY INCOME 600 COST PER EXPLOITATION OF

510 OPERATING COSTS

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