1) which head of P&L a/c will be effected by Impairment loss on trade receivables? 2) And under which head of Balance sheet will the bad debt provisions be shown?
If we are not having historical information, what is the better approach and could you help us with an example by computing Average collection days invoice by invoice to find out our average collection period for determining Provision for doubtful debts or any other criteria (please explain with an example)
In case where we don't have historical information in place then we have to do the evaluation based on the current years trend about the collections and the average collection days we can determine from the system. Will surely come up with video on what you asked. Thanks
Have question. Last year amount written off is 2 million. But why over 365 days balance of 2 Lacks in last year as well is the basis of % working? that I didn't understand.?
I think there is incorrectness in calculation total expected credit loss 2l on total which accounts for 4 % of total receivabkes but why its been considered at each intervals among 8 lac receivables 1l provison almost account for 16 % of receivables is my understanding correct ?? Please help
This is as per the IFRS 9 and considering the default rate at every stage taking into the future predication to come up with impairment of losses. Thanks.
Why do not we take ageing bucket wise non-recoverable (Bad debt) and determine percentage based on that adjusted with +/- % for future impact (provision)
lets say 1 250 000 in June 2021, 1 250 000 in September 2021, 1 250 000 in December and 1 250 000 In March 2022 ......and the payments are still the same as in your example. How would it change?
Why in the second table Starts with the lost of 5 mio instead of 3.5 mio ( within the maturity Date for
0-30 days)?
Thanks a lot Sir🙏
Its our pleasure.
1) which head of P&L a/c will be effected by Impairment loss on trade receivables?
2) And under which head of Balance sheet will the bad debt provisions be shown?
Impairment Loss Account (Indirect Expenses). Dr.
To Provision for Impairment loss account (Grouping under Accounts Receivable) Cr
Thanks
If we are not having historical information, what is the better approach and could you help us with an example by computing Average collection days invoice by invoice to find out our average collection period for determining Provision for doubtful debts or any other criteria (please explain with an example)
In case where we don't have historical information in place then we have to do the evaluation based on the current years trend about the collections and the average collection days we can determine from the system. Will surely come up with video on what you asked. Thanks
For the balances, is this only principal or do you also include interest?
Have question.
Last year amount written off is 2 million. But why over 365 days balance of 2 Lacks in last year as well is the basis of % working? that I didn't understand.?
Sorry but its 2lac and not the 2mil and last after the calculation the provision we need to TT take for 1.03lac
Thank you 💞
Its our pleasure.
I think there is incorrectness in calculation total expected credit loss 2l on total which accounts for 4 % of total receivabkes but why its been considered at each intervals among 8 lac receivables 1l provison almost account for 16 % of receivables is my understanding correct ?? Please help
This is as per the IFRS 9 and considering the default rate at every stage taking into the future predication to come up with impairment of losses. Thanks.
Why do not we take ageing bucket wise non-recoverable (Bad debt) and determine percentage based on that adjusted with +/- % for future impact (provision)
We have to calculate unpaid amount through historical calculations to apply default rate as per forward looking information. Thanks
@@AccountsGurukul can you send me this excel sheet with thanks
Yes..... Please drop text email on our email id accounts.gurukul@yahoo.com
What if the 5 000 000 was billed at 1 250 000 4 times during the year? Because in this example its like it was billed 1 April 2021?
lets say 1 250 000 in June 2021, 1 250 000 in September 2021, 1 250 000 in December and 1 250 000 In March 2022 ......and the payments are still the same as in your example. How would it change?
Thank you, can you provide me the Excel
Yes we can. Please drop an email at our email id accounts.gurukul@yahoo.com thanks
@@AccountsGurukul I sent you an email :)