Provision for bad debts
This query is : Resolved
16 May 2012
Hi Friends. I have a doubt and need your help.
On what basis Companies estimate Provision for Bad Debts.Is it based on past recovery or any other criteria.
plz get my doubt clarified.
On what basis Companies estimate Provision for Bad Debts.Is it based on past recovery or any other criteria.
plz get my doubt clarified.
17 May 2012
Dear Devendar,
Provision for bad debt is created on the following basis:
1. Debts which have been due for more than 3 years(because of the applicability of law of limitation)
2. All disputed debts.
3. Debts against which court cases are pending.
Provision for bad debt is created on the following basis:
1. Debts which have been due for more than 3 years(because of the applicability of law of limitation)
2. All disputed debts.
3. Debts against which court cases are pending.
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