Identification of Doubtul Debt, we would prefer to proceed additional on tips on how to assess the exposure to doubtful debt. An incredibly important query to ask: Does all extended outstanding debt represents doubtful debt, for which the provision must be offered for ? The answer is quite subjective, and involved many qualified judgement.
Let's start out the evaluation with asking our readers some scenarios as under:
[Scenario A] ABC Corporation has outstanding amount due from Corporation A (aged > 90 days), who's extended standing customer of ABC Corporation for the previous ten years with no history of default in repayment. The extended outstanding quantity is attributable for the slow-repaying from Corporation A.
[Scenario B]ABC Corporation has outstanding quantity due from Corporation B(aged > 90 days), who's extended standing buyer of ABC Corporation for the previous 20 years with no history of default in repayment. Corporation B commonly paid the amounts when they're due. There is absolutely no dispute involved inside the outstanding quantity due from Corporation B.
