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متابعة

What elements does an aging report account for to estimate the provision of doubtful debts?

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تاريخ النشر: 2014/08/30
Muslim Kader Rasiya
من قبل Muslim Kader Rasiya , Assistant Manager , Ernst & Young (EY) (since February 2008)

Provision of doubtful debts can be based on the aging of the receivables.Important to note is the aging should be based on due date of the invoice and not from the date of invoice. In case for any customer , the invoice is long outstanding say more than180 days after it become due then management will decide whether provision for doubtful debts is required based on number of factors such as:

-prior payment history of the customer

- Any dispute on the invoice outstanding

- if the receivable is secured or not (example; if it is through LC then there is no recoeverability concern)

- financial condition of the customer

- willingness of customer to pay

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