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How to calculate bad and doubtful debt provision?

Publication date: 2014-03-31 22:29:28

To calculate a reasonable percentage of a bad and doubtful debt provision, you can adopt the following methodology: the sum of the balances of receivables on the balance sheet date that are overdue more than one year and accounts receivable written off during the year divided by total receivables from the previous year. It is important to take into account not only the overdue receivables, but also ongoing.

So calculated ratio multiplied by the value of receivables at the current balance sheet date, will give as the reasonable value of bad and doubtful debt provision.

S.Ekman ? General Manager
FY AUDIT/24iValue

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