How to write off receivables

In accordance with the "Regulation on Accounting", receivables for which the statute of limitations has expired, other unrealistic debts for collection are subject to write-offs, the basis for which is an inventory or management order.

Instruction manual

one

Unrealistic collection of receivables is written off to the account of the allowance for doubtful debts or the financial result of the enterprise, if the specified reserve has not been created. For a non-profit organization, overdue receivables must be written off to increase expense accounts.

2

Writing off receivables due to insolvency of the debtor does not mean that it is canceled in this way. This debt is reflected in accounting for 5 years so that if the debtor's financial condition improves, it can be repaid.

3

Accounts receivable are recognized unrealistic for collection if the limitation period has expired, the obligations ceased to be in force due to the impossibility of their performance, on the basis of an act of a state body, in the event of the death of a debtor citizen or liquidation of a legal entity.

4

The write-off of overdue receivables is carried out on the basis of the data of the inventory, a written justification and an order of the enterprise management. In addition, accounts receivable can be written off on the basis of an act of a state body, for example, a bailiff service, or liquidation of an organization.

5

Expired receivables, as well as other unrealistic debts, are debited to account 63 “Allowance for doubtful debts” or to account 91 “Other income and expenses”. At the same time, accounts for the accounting of settlements with debtors (60, 62, 76, etc.) are credited. If the company does not create an allowance account for doubtful debts, then the amount of write-offs is included in non-operating expenses. It should be remembered that the amount of the provision for doubtful debts cannot exceed 10% of the organization’s revenue.