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Calculate allowance (provision) for bad and doubted debts

This query is : Resolved 

companies act including Accounting Standard are applicable on private limited concern. I am unable to find out how to calculate (per centage of debtors etc) allowance (provision) for bad and doubted debts according to companies act including Accounting Standard.


if a trader's bad debt represented 2% of its total debtors last year, and the economy has significantly improved since then, it may only decide to set aside a bad debt provision of 1.5% of its total debtors this year. If economy is not improved 2% or higher provision may be made.


Respected Sir,
thanks for your guidance, it means nothing "about per centage and how to calculate" is written in Companies Act as well as Accounting Standards. It is according to one's choice of adopting accounting policy.

Yes, you are right...............

Thanks a lot for your quick guidance again.


Bajaj Finserv

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