the debt that arose in the course of this operating cycle, still not recognized the long-term and ongoing., Long-term debt - is basically debt not related to operating activities.receivables (short) - a debt that occurs during the normal operating cycle or will be repaid within 12 months from the balance sheet date.account for the amounts receivable used several kinds of assessments.
. Present value of future payments expected to repay this debt.the present value of future payments to reflect the applicable lessors payments under financial lease agreements.other words, the amount of such payments to be reflected in the net investment in the lease, equal to the total minimum lease payments and unguaranteed residual value less unearned finance income.
. The net realizable value net realizable value is used for current receivables for goods, products, works and services, value of this assessment is as followspany, shipping of products or goods, performing work or providing services, not always receiving payment from buyers and customers immediately. It was forced to go to some risk in order to increase its sales in a competitive environment. In fact, the company provides its customers commercial credit. In such circumstances, is always the likelihood that the payment from the buyer is not received. At the same time according to the accrual basis at the time of shipment of goods (products), works or services the company should recognize revenue from the sale. In income also includes debt, that probably will never be paid. This leads to the fact that real income that the companies in the future, unreasonably inflated the amount of these debts. Therefore, the recognition of revenue from sales it must reduce the amount of doubtful debts. This requires prudence and principle, according to which it is impossible to overstate earnings.estimate the amount of doubtful debts there is a special procedure under which the company forms a provision for doubtful debts., Current receivables for products, goods, works and services at the time of acceptance of its assets increases the income from the sale and measured at the initial value. But the balance sheet date of the amount shall be reduced by the amount of allowance for doubtful debts. Of total debt balance included at net realizable value, which represents the difference between the cost of current receivables and the amount of allowance for doubtful debts.
. Historical cost cost is used for all kinds of long-term and current receivables that are not payable for the products, goods, work or services, or expected payments under finance leases. For these types of debt provision for doubtful debts is created.debt as long as the present one, at some point be recognized now hopeless. By 2000, the national accounting was no concept of bad debts, even though it was provided to write off the losses the company amounts receivable for which the limitation period has expired or for which there is documentary evidence of the impossibility of repayment, ie documents issued by judicial authorities., in order to establish accounting uncollectible receivables do not need documentation. Suffice it to was made one of the conditions:
Expired limitation period (3 years);
There is a belief that the debtor does not repay its debts.
Provision for doubtful debts is formed now at the balance sheet date. Simultaneously, the value of reserve increases the cost reporting period. Due allowance will be written off bad debts next year. Thus, the method of writing off bad debts against provision for doubtful debts is different from the method of direct write-off) date include such sums due to cost. Obviously, when using the first method costs previously recognized that respects the principle of prudence, according to which costs can not underestimate. (S) BO 10 provides two methods of creating provisions for doubtful debts:
) based on the solvency of individual debtors;
) based on the classification of receivables.first method is based on the results of analytical accounting receivables for each borrower. If a particular debtor declared insolvent, then the amount of his debt should increase the provision for doubtful debts. Although this method is acceptable, in the exercise now quite a large number of operations is better to use the second method of creating provisions for doubtful debts.second method is based on the basic and periodization receivables. To use this method, the company needs to analyze information from several previous reporting periods for bad debts of products, goods, works or services. This should be considered when each particular debt was hopeless before terms of payment under the contract or after she became overdue.debts that are uncollectible after...
