W/off of closing balances
This query is : Resolved
15 December 2011
Dear Members,
A company has Turnover of 4 Crores.and as on 31st March . Debtors of 10 lacs have been w/off.
Is there no limit on the amount to be written off.
Thank you.
Dear Members,
A company has Turnover of 4 Crores.and as on 31st March . Debtors of 10 lacs have been w/off.
Is there no limit on the amount to be written off.
Thank you.
CA Kishore Tallam
(Expert)
19 December 2011
Hi..
There is no limit on the amount that can be written off by the Company since it depends upon the decision taken by the management.
However as an auditor, we need to see the reason behind such written off. If the amount is material enough and is a continuos one, then we should look into the Going concern of the Company.
Also, we need to verify whether any subsequent sales has been made to same parties whose balances are written off and obtain reason as to such decision.
Hope this clarifies ur query.
There is no limit on the amount that can be written off by the Company since it depends upon the decision taken by the management.
However as an auditor, we need to see the reason behind such written off. If the amount is material enough and is a continuos one, then we should look into the Going concern of the Company.
Also, we need to verify whether any subsequent sales has been made to same parties whose balances are written off and obtain reason as to such decision.
Hope this clarifies ur query.
22 December 2011
In case if there is subsequent sales with the party whose account has been w/off than what should be done.
thank you.
In case if there is subsequent sales with the party whose account has been w/off than what should be done.
thank you.
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