Provisions

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 May 2018 Hi everyone, While going through annual reports of some companies, i have noticed that the amount debited from profit and loss statement for provision of doubtful debts is less than the actual provision created( as seen as a deduction from trade receviables). I wanted to know what are the possible cases when such a thing can happen.

Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 May 2018 It is due to deduction from trade receivables include earlier year provision debited to earlier year P&L account.

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2018 Hello Sir,
No sir I am not talking about that. Let me clear it with a case.
I was going through a company "Somany Ceramics" FY 2013
Opening Provision for Doubtful Debts = 128.79
Provision Write-up = 0.43
Closing Provision = 140.01

So , we should see an entry of 11.65 in Profit and loss statement as Provision of doubtful debts, but the actual amount in the annual report is zero.

Querist : Anonymous

Querist : Anonymous (Querist)

07 May 2018 And it is problem for consolidated statements only.