Bad Debt Expense
Code: 5259
👁 Views: 123
Account Information
| Financial Statement | Income Statement |
| Normal Balance | Debit |
Definition
Estimated expense reflecting the portion of receivables expected to be uncollectible. Placed under miscellaneous administrative & operating expenses as it is an operating expense related to core activities. Offset by "Allowance for Doubtful Accounts" (1143) on the balance sheet.
📐 IFRS vs US GAAP Accounting Treatment
IFRS
IAS 37
Provisions, Contingent Liabilities and Assets
US GAAP
ASC 450 / ASC 310
Contingencies / Receivables
❓ Frequently Asked Questions
Q: How is bad debt expense estimated?
A: Using a percentage of credit sales or aging analysis of receivables.