When a company purchases returnable packaging, it is treated as an asset on the balance sheet. This is because the packaging can be reused, providing future economic benefits.
If there is a deposit for the refundable packaging, please refer to a separate article on how to account for it.
First, create a new asset account for returnable packaging
Create a new Item with Lot type Expiration date. In this case the Expiration date will be date, when we should return the refundable packaging. Please check with your local tax legislation if the refundable packaging is subject to VAT. Our accounting example below assumes no VAT.
| Document | Debit side | Amount | Credit side | Amount |
| Payment (refund for the packaging) | Dr Refundable deposit | 200 | Cr Bank | 200 |
| Bill | Dr Refundable packaging Dr Inventory | 200 1000 | Cr Accounts payable | 1200 |
| Bill payment (only goods are paid for) | Dr Accounts payable | 1000 | Cr Bank | 1000 |
| Vendor credit memo (when we have returned the packaging) | Dr Accounts payable | 200 | Cr Refundable deposit | 200 |
The refundable packaging may be accounted for a zero amount, only as a quantity.