Bad debt and provision for doubtful debts

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.

Replies (6)
1. check there should be some opening prob for doubtful debts.
2. no bad debts during the year, chance to create further provision for doubtful debts by the end of the year.

Attaching file with screenshots for reference, 

According to this provision should be created of (114.29-20) 94.29, but in profit and loss we can find provision of only 81.82.

 

 

Making provision for doubtful debts and actual bad debts, both are different things You are estimating that some of amount will be unrecoverable for which you’re making provision and deducting from receivables but if in this estimation you realise that some of amount will not recover actually then you have to debited this amount in your profits and loss account so here may be a gap between amounts

If that is the case how does the A = L + E match ?

Equity goes down by 81.82. Asset goes doen by 94.29(net) ?

Originally posted by : Shikha
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.

This Thing can't be happen 

I don't like to drive all time. It makes people weak. People who will go into debt, in india, are advised to travel by two wheelers. The clients may not like it to deal with a poor guy, but the clients, owners, creditors etc are self sufficient and pooooor. So be safe and never show off must be the motto and governments must provide protection 

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