Accounts receivable is the amount of debts owed to the enterprise by other firms, citizens, government agencies that are its debtors. The formation of accounts receivable, especially in the context of rapidly growing inflation, has a negative effect on the state of the enterprise, because the debt that cannot be collected is written off to the financial results.
Instructions
Step 1
Accounts receivable are recognized as hopeless for collection in the following cases: - if the limitation period has expired;
- if the obligation has ceased to be effective if it is impossible to fulfill it;
- if the obligation has ceased to be effective on the basis of an act of a state body;
- if the obligations have ceased due to the liquidation of the organization.
Step 2
The limitation period is understood as the term for protecting the right at the claim of the person whose right has been violated. This period is calculated from the moment of violation of the right or from the moment when the person learned about the violation of the right. The limitation period under Russian law is three years.
Step 3
The limitation period may be interrupted if the debtor takes any action to pay the debt. Such actions include partial payment of debt, payment of interest on arrears, contacting the creditor with a request for a deferred payment or offsetting claims, an agreement on debt restructuring, etc.
Step 4
Writing off accounts receivable with the expired limitation period is carried out on the basis of the inventory act and the order of the head. The amounts of uncollectible debt are charged to the financial results of the organization and are other expenses. When writing off such receivables, an entry is made on debit 91 of account "Other income and expenses" (subaccount 91-2 "Other expenses") and credit of account 62 "Settlements with buyers and customers".
Step 5
At the same time, the amounts of accounts receivable written off at a loss, for which the limitation period has expired, are not canceled. This debt should be reflected in the accounting within 5 years from the date of write-off in order to be able to repay it in the event of, for example, restoring the debtor's solvency. To summarize information about the state of debt, off-balance sheet account 007 "Written off at a loss debt of insolvent debtors" is used.
