Probably, every economic entity in itsactivities faced such a problem as the write-off of receivables. Any action of the organization should be displayed in the balance sheet and have good reasons for this, as documented.
First of all, it is necessary to determine what isreceivables. It can be called exactly the amount of debt that the economic entity of our organization must return, that is, it is the obligation of one legal entity to another. If the timely fulfillment of these obligations is not carried out, the creditor takes concrete measures. As a rule, simply submits a statement of claim to the court.
In a special group is the write-offuncollectible receivables. Bad debts are understood as those that can not be covered from the reserve fund of the enterprise and the return of which is considered impossible in connection with the total insolvency of the borrower.
Write-off receivables shouldOnly after a certain period of time, called the limitation period, is established, which is established by the courts. In most cases, the court designates a period of three years from the day following the date agreed by the contract between the counterparties. According to the rules, the lender appeals to the borrower with claims for repayment of the debt. Then the obligation must be repaid in maximum after seven working days.
Write-off of accounts receivable: posting
In the accounting reports, the specialist transfersBad debts to collection of debts for an item of non-operating expenses of the enterprise. It is worth remembering that the correct write-off is carried out only in the period when the limitation period has expired. If the accounting department of the enterprise has displayed this posting in the report of the next period, then it is considered invalid. If errors are detected by state bodies, enterprises will have to prove their own innocence already in court. In this situation, it is sufficient for an economic entity to provide the tax service with a revised declaration, on the basis of which appropriate amendments will be made. In turn, the employee of the tax inspection has the right to carry out a desk audit, that is, clarify the veracity of the documents submitted. If errors or inconsistencies are detected, the enterprise receives an alert within three days. Errors must be corrected within five working days.
So, a bad debt is reflected in the accountingreporting in the form of a double entry on the accounts "Other income and expenses" (on debit) and "Settlements with buyers and customers" (under the loan). Separate posting of the loss is due to outstanding obligations on account 007, called "Write-off of losses to the debt of insolvent creditors".
Write-off of receivables refers toNon-operating expenses subject to the availability of a reserve fund. But there are situations when the organization considers it inappropriate to create such a fund. In this case, debts directly affect the financial result. If the amount of debt exceeds the amount of the trust fund to cover unforeseen expenses, the uncovered portion is also reflected in the financial result at the balance sheet date.
In some situations, the accountant is given the rightto write off debts of the debtor before the termination of the term established by court. Often this happens when the debtor company is liquidated on the basis of a court decision. And the creditor is obliged for five years to keep in his archive documents that are grounds for writing off the debt and confirm the fact that it is considered hopeless to be recovered. This need is explained by the fact that the tax authority can verify the veracity of the transaction data reflected in the balance sheet.
In addition, immediately before writing-offthe creditor is obliged to make an inventory of the debt, as it is accurately displayed in the documents. For this purpose, the head of the enterprise signs the appropriate order and forms a commission. Only after the end of these activities is it possible to display bad debts in the balance sheet.