Bad Debt Provision
A bad debt is a loan which has little if any chance of being repaid. For example, a loan to a company who have gone into bankruptcy.
The first method is the allowance method, which establishes a liability account, allowance for doubtful accounts, or bad debt provision, that has the effect of reducing the balance for accounts receivable.
adjusted for these due to the overall cyclical nature of the company and the difficulty of obtaining a normalized view of earnings. In Q3 2008 we deducted a 60 cent per share gain or $18.67 million (after tax). Also added back a bad debt provision in ...
The sum of the bad debt provision can be calculated using two methods. Each individual debt may be reviewed to decide if it is doubtful or a fixed percentage may be set for all debtors.
 See also: Bad debt, Industry standard, Due date, Expense, Write off
  
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