Provision for bad and doubtful debts.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2014 Where the Provision for Bad & Doubtful Debts will be shown in the Balance Sheet of a company as per new Schedule VI (Revised). Thanks in advance.

Ganeshbabu K

Ganeshbabu K (Expert)

12 November 2014 It is shown as Less from doubtful debtors.

Over all presentation can be as below

TRADE RECEIVABLES

Unsecured:-
Debts outstanding for period exceeding six months
-Considered good A
-Considered doubtful B
Less: provisions for doubtful debts(B)
A+B+(B)
.
.
Other debts
-Considered good C

TOTAL A+B+(B)+C

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Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2014 Thanks sir, but my doubt is that in the new format may be we have to show provisions on the liability side of balance sheet as:
8.6.4.Short-term provisions
The amounts shall be classified as:
(a) Provision for employee benefits;
(b) Others (specify nature).
Others would include all provisions other than provisions for employee
benefits such as Provision for dividend, Provision for taxation, Provision for
warranties, etc. These amounts should be disclosed separately specifying nature thereof.
Sir, earlier we used to deduct provision from debtors. My doubt is whether we have to show it under short term provisions.

Ganeshbabu K

Ganeshbabu K (Expert)

12 November 2014 Hi Sir,

Please see pg 134

My above reply is based on as suggestion given for presentation of TRADE RECEIVABLE

https://www.mca.gov.in/XBRL/pdf/Guidance_Note_Rev_ScheduleVI.pdf
.
.
Presentation given in above reply is comply with revised schedule VI
.
.
Hence provision for doubt ful debts have to be reduced from DEBTORS ONLY as advised above to comply with Revised shedule VI requirement and it cannot be classifed as short term provision.

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