How to provide for impairment losses on other receivables and advance receivables? Urgent!!!

1241 Provision for bad debts.

1. This account accounts for the impairment provision when the company's receivables are impaired.

Second, the main accounting treatment of bad debt provisions.

1) At the balance sheet date, the enterprise shall determine the amount of financial instruments in accordance with the standards for the recognition and measurement of financial instruments.

If the receivables are impaired, the "asset impairment loss" shall be debited according to the amount of bad debt provision accrued

Account, which is credited to this account. If the provision for bad debts accrued in the current period is greater than its book balance, it shall be accrued according to its difference; The difference between the accrued amount and its book balance is reversed.

Record. 2) For the receivables that cannot be recovered, they shall be submitted for approval according to the management authority.

For bad debt losses, the receivables are re-sold, this account is debited, and "accounts receivable" and "prepaid" are credited.

Accounts", "Interest Receivable", "Reinsurance Insurance Liability Reserve Receivable", "Other Receivables", "Long-term Receivables" and other accounts.

3) If the receivables that have been confirmed and resold are later recovered, the accounts receivable, "accounts receivable", "prepaid accounts", "interest receivables", "reinsurance liability reserves receivable", "other receivables", "long-term receivables" and other accounts shall be debited and credited to this account according to the actual amount recovered; Same.

, the Bank Deposit account is debited, and the accounts Receivable, Prepaid Accounts, Interest Receivable, Reinsurance Insurance Liability Reserve Receivable, Other Receivables, and Long-Term Receivables are credited.

If the receivables that have been confirmed and resold are later recovered, the enterprise can also debit the "bank deposit" account and credit this account according to the actual amount recovered.

3. The credit balance at the end of the period reflects the provision for bad debts that have been accrued but not yet sold by the enterprise.

Bad debts are accrued in proportion to accounts receivable.

1. Goodwill. There are significant uncertainties to avoid subjective estimation bias.

In addition, receivables are mainly considered to be the part of the expected recovery amount.

2. It shows that the receivables of the enterprise have major quality problems.

3. The quality of receivables is not very good. There are most funds that cannot be recovered.

Extended Information: The Necessity and Importance of Asset Impairment Accounting:

The necessity of asset impairment accounting.

For a long time, due to the influence of many factors, overestimating the value of assets is a common phenomenon in China's business circles. Asset impairment provides a measure of the true value of an asset, which essentially replaces cost measurement with value measurement and recognizes the part of the carrying amount greater than the value as an asset impairment loss.

or expenses, the asset measurement is close to the true value, which helps the information user to make investment decisions. Provision for impairment of assets.

To a certain extent, to ensure the authenticity of the financial information of the enterprise, the provisions on asset impairment provision not only illustrate the importance of the principle of prudence, but also avoid the inflated profits of the enterprise caused by the inflated assets.

The importance of asset impairment accounting.

Asset impairment accounting is also a judgment on the potential future flow of assets into the entire economic benefits of the enterprise, which has an important impact on the profits of the enterprise. Therefore, by confirming the value of assets, enterprises can not only digest the non-performing assets accumulated over a long period of time.

Moreover, Yunzhi can improve the quality of assets, so that the assets can truly reflect the strength of the enterprise without obtaining economic benefits. At the same time, the implementation of asset impairment accounting can enable enterprises to reasonably predict possible losses according to their actual situation, which is conducive to improving the efficiency of assets, reducing potential risks, and improving the risk prevention ability of enterprises. This poem reflects the fair value of the company's assets more truly and objectively.

and financial situation, which plays an important role in standardizing market information behavior and protecting the vital interests of the majority of investors.

Standard. 1. Permanence.

That is, the impairment of assets that cannot be recovered in the foreseeable future is recognized. Although this standard avoids the recognition of losses caused by temporary value fluctuations, it requires accountants to make judgments on temporary impairment and permanent impairment.

Second, economy.

i.e. at the balance sheet date.

If the carrying amount of an asset is higher than the allowable amount, its impairment is recognized. It can faithfully reflect the value of assets at the balance sheet date, avoiding the difficulty of using professional judgment to distinguish the type of asset impairment, and is easy to operate.

3. Possibility.

That is, the recognition of possible impairment of assets is required. The main purpose is to be consistent with historical costs and avoid the recognition of unnecessary impairment losses.

Review:

1. Borrow: asset impairment loss of 60,000; Credit: Bad debt provision 60,000.

2. Borrow: asset impairment loss of 20,000; Credit: provision for bad debts 20,000.

3. Borrow: bad debt provision 7000; Credit: Accounts receivable 7000.

4. Borrow: asset impairment loss of 27,000; Credit: Provision for bad debts 27,000.

5. Borrow: accounts receivable 5000; Credit: Provision for bad debts 5000. Borrow: bank deposit 5000; Credit: Accounts receivable 5000.

6. Borrow: bad debt provision 33,000; Credit: asset impairment loss 33,000.

Accounting entries for impairment of accounts receivable, debit: credit impairment loss (asset impairment provision), credit: bad debt provision.

Credit impairment loss is the loss suffered by an enterprise due to the buyer's refusal to pay, bankruptcy, death and other reasons.

According to the Guide to the Application of Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments (2017), the expected credit losses arising from the impairment provision of financial assets should be accounted for through the "credit impairment loss" account.

Therefore, after the implementation of the Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments (2017), the provision for bad debts incurred by an enterprise should be accounted for through the account of "credit impairment loss", and no longer through the account of "asset impairment loss".

Enterprises should calculate the expected credit losses on financial instruments at the balance sheet date. If the expected credit loss is greater than the carrying amount of the current impairment provision for the instrument, the company should recognize the difference as an impairment loss, debit the "credit impairment loss" account, and credit the "bad debt provision" account depending on the type of financial instrument.

At the end of the year, make a one-time adjustment to the fiber spring. You don't usually need to do a flush back.

Accounting treatment at the end of 2012:

Borrow: Asset impairment loss 25

Credit: Provision for Bad Debts - Provision for Bad Debts of Other Receivables 25

Accounting treatment in May 2013:

Debit: Bank deposit 500

Credit: Other receivables 500

The second entry is adjusted together at the end of the year.

The new standard stipulates that bad debt losses should be carried forward to the current year's profit and cannot be processed. At the end of the period, the balance of this account should be transferred to the "Profit of the Year" account, and there is no balance in this account after the carryover. It also stipulates that "once an asset impairment loss is recognized, it shall not be reversed in subsequent accounting periods." ”

Taxpayers shall not draw bad debt reserves for receivables arising from non-purchase and sale activities and any current accounts between related parties. Accounts between related parties shall also not be recognized as bad debts.

Accounts receivableImpairment losses are includedProvision for bad debtsSubjects. China's Accounting Standards for Business Enterprises.

It is stipulated that the impairment of receivables can only be provided by the allowance method, that is, the "bad debt provision" account is accrued, and the "bad debt provision" account is debited and the "receivable Zen shouting calendar account" account is credited after the approval of the management authority when it actually occurs.

The various receivables of the enterprise may not be recovered due to the refusal to pay, bankruptcy, death and other reasons of the purchaser. Such uncollectible receivables are bad debt leakage. The loss suffered by an enterprise due to bad debts is a bad debt loss or an impairment loss.

The enterprise should search the face value of the receivables at the balance sheet date.

If the receivables are impaired, the amount of the write-down shall be recognized as an impairment loss, and a provision for bad debts shall be made at the same time. There are two accounting methods for the impairment of receivables, namely the direct transfer method and the allowance method, and China's accounting standards for business enterprises stipulate that the accounting for the impairment of receivables should be accounted for by the allowance method, and the direct transfer method shall not be used.

Impairment losses on accounts receivable are included in the bad debt provision account. The various receivables of the enterprise can be irrecoverable due to the buyer's refusal to pay, bankruptcy, death and other reasons. Such uncollectible receivables are bad debts.

The loss suffered by an enterprise due to bad debts is a bad debt loss or an impairment loss. The enterprise should assess the carrying amount of the receivables at the balance sheet date, and if the receivables are impaired, the amount of the write-down should be recognized as an impairment loss, and provision for bad debts should be made at the same time.

Accounting method for impairment losses on accounts receivable.

1. Direct resale method.

The direct transfer method is that the possible bad debt losses of receivables in daily accounting are not considered, and only when bad debts actually occur, they are included in the current profit or loss as losses, and the receivables are written off at the same time, that is, the asset impairment loss is debited and the accounts receivable account is credited.

2. Allowance method.

The allowance method is to use a certain method to estimate the loss of bad debts on a regular basis, include them in the current expenses, and establish a bad debt provision at the same time, and write off the bad debt provision and the corresponding receivables when the bad debts actually occur.

Impairment loss on receivables refers to the loss caused by the carrying amount of accounts receivable being higher than the expected cash flow of an enterprise in a certain accounting period. In order to reflect the actual value of accounts receivable, companies need to make an impairment provision for them.

The measurement of impairment losses of receivables generally adopts the estimated credit loss model, that is, according to historical experience and the current situation of the clan, the credit risk assessment of accounts receivable in a certain period of time in the future is carried out, and the corresponding travel and impairment losses are calculated according to the results.

Specifically, the provision for impairment losses on receivables includes the following steps:

Accounts receivable are classified according to factors such as overdue time and credit rating.

According to historical experience and current situation, the bad debt loss rate of various accounts receivable is carried out.

According to the results, the estimated credit loss amount of various accounts receivable is calculated.

Based on the book value and estimated credit loss of various types of accounts receivable, the impairment provisions of various types of accounts receivable are calculated.

According to the principle and method of provision for impairment, the impairment loss of receivables is provided.

It should be noted that the provision for impairment losses on receivables should comply with the provisions of accounting standards, and should reflect the actual value of accounts receivable in a timely and accurate manner.

The impairment of receivables can be understood as the company's receivables cannot be recovered due to the refusal to pay, bankruptcy and other reasons of the purchaser, resulting in the amount of receivables being lower than the book value. How to deal with the accounting treatment of receivables impairment?

How to account for the impairment of receivables?

1. When making provision for bad debts:

Borrow: Asset impairment loss.

Credit: Provision for bad debts (provision for bad debts accrued in the current period).

2. When reversing the provision for bad debts that have been over-accrued:

Debit: Provision for bad debts (the amount of over-provisioning).

Credit: Asset impairment loss.

3. Accounting treatment in the event of bad debts:

Debit: Provision for bad debts (the amount of bad debts incurred).

Credit: Accounts receivable.

4. Accounting treatment of bad debts (receivables that have been recognized as bad debt losses and resold are recovered later):

Debit: Accounts receivable, etc. (the amount actually recovered).

Credit: provision for bad debts.

Borrow: Bank deposit.

Credit: accounts receivable, etc.

Accounts receivable accounting processing.

Accounts receivable refers to the amount that should be collected from the purchasing unit by an enterprise in the normal course of business for the sale of goods, products, provision of labor services and other businesses. Including the taxes that should be borne by the purchasing unit or the receiving labor unit, the packaging costs advanced by the buyer, various transportation and miscellaneous expenses, etc., generally recognize the accounts receivable at the same time as the revenue.

1. When selling goods, the entries are as follows:

Debit: Accounts receivable.

Credit: main business income.

Tax Payable – VAT payable (output tax).

2. When the money is recovered, the entries are as follows:

Borrow: Bank deposit.

Credit: Accounts receivable.

3. When a cash discount occurs in the recovery of accounts receivable, the entries are as follows:

Borrow: Bank deposit.

Finance Expenses. Credit: Accounts receivable.

4. When the accounts receivable cannot be recovered, the entries are as follows:

Borrow: Asset impairment loss.

Credit: provision for bad debts.

When the provision for bad debts is recognized, the entries are as follows:

Debit: Provision for bad debts.

Credit: Accounts receivable.

What does bad debt provision mean?

Bad debt provision refers to the provision of accounts receivable (including accounts receivable, other receivables, etc.) of an enterprise, which is a provision account. Enterprises use the allowance method for the accounting of bad debt losses. Under the allowance method, the enterprise should estimate the bad debt loss at the end of each period and set up a bad debt provision account.

The allowance method refers to the use of a certain method to estimate the loss of bad debts on a period (at least at the end of each year), withdraw the bad debt provision and transfer it to the current expenses; When bad debts actually occur, it is a treatment method to directly write off the provision for bad debts that have been accrued and at the same time resell the corresponding balance of accounts receivable.

When determining the proportion of provision for bad debts, an enterprise should make a reasonable estimate based on the past experience of the enterprise, the actual financial position and cash flow of the debtor, and other relevant information.