How to write off receivables
In accordance with "Regulations on accounting", Receivables for which the statute of limitations has expired, other uncollectible debts to be written off, the basis for which is carried out by the inventory or order management.
Instruction how to write off receivables
Uncollectible receivables are written off against the allowance account for bad debts or the financial results of the enterprise, if the said reserve was not created. At nonprofit overdue receivables to be written off in the increase in spending accounts.
Write-off of accounts receivable due to the insolvency of the debtor does not mean that it is thus canceled. This debt is reflected in the accounting records for 5 years in order to improve in the event of the debtor's financial condition, it could be repaid.
Accounts receivable deemed uncollectible, if the term of its statute of limitations has expired, the obligation ceased to operate due to the impossibility of their execution, by an act of public authority, in the event of death of a citizen of the debtor or the liquidation of the legal entity.
Write-off of overdue receivables is carried out on the basis of the inventory, a written justification and orders of the company's management. In addition, accounts receivable can be written off on the basis of an act of a public authority, for example, the bailiff service, or liquidation of the organization.
Accounts receivable with expired limitation period, as well as other uncollectible debts are written off to the account 63 "Provision for doubtful accounts" or to the account 91 "Other income and expenses". At the same time credited to the account to record accounts receivable (60, 62, 76, etc.). If the enterprise through an allowance for doubtful accounts is not created, the amount of write-offs is included in non-operating expenses. It should be remembered that the amount of an allowance for doubtful accounts can not exceed 10% of the revenue of the organization.