Home  Journals  International Accounting  24(318) - 2014 June

Conceptual aspects of the International and Russian accounting practice for reflection of the allowance for doubtful accounts

Available online: 5 July 2014

Subject Heading: On the way to international standards

JEL Classification: 

Pages: 16-24

Activities of any business entity are connected with a lot of unexpected situations. The entity has to forecast the occurrence of an event that would require additional resources. As a result, there is a need for creating and using provisions, including allowance for doubtful accounts. The paper examines such categories as "doubtful debt" and "bad debt", and it contains classifications of accounts receivable set by the Bank of Russia and Tax Code of the Russian Federation. It also analyzes different methods of calculation of allowance for doubtful accounts used in the US and Russian accounting practice; it discusses disadvantages and advantages of the direct write-off method and the allowance method. The authors offer methodology of calculating the allowance for doubtful accounts in for-profit accounting.

Keywords: bad debts, allowance for doubtful accounts, US GAAP, direct write-off, accounts receivable, international practice, Russian practice, bad debt expenses

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