Processing flow of bad debt write-off

The general process is as follows: the Asset Management Department submits an application, the Finance Department submits an audit opinion, and the Legal Affairs Department provides or confirms the legal documents and related materials that prove the loss of relevant assets, and submits them to the General Manager, the Board of Directors or the shareholders' meeting for approval. After approval, the bad debt reserve accrued as bad debt loss write-off shall be debited to the account of "bad debt reserve" and credited to the account of "accounts receivable".

Write-off of bad debts means that enterprises treat all kinds of accounts receivable that are really irrecoverable as bad debt losses on the basis of inventory and verification, and deal with them in time. If it belongs to the production and operation period, it shall be regarded as the current profit and loss; If it belongs to the liquidation period, it shall be regarded as liquidation profit and loss. After the disposal of bad debt losses, they shall be reported to the competent tax authorities in accordance with the relevant provisions of the tax law and accounted for in accordance with the methods stipulated in the accounting system.

Extended data:

The bad debt loss of an enterprise shall be confirmed according to the following methods according to different situations:

(1) If the debtor is declared bankrupt or revoked according to law, the accounts receivable that cannot be recovered after deducting the part of the debtor's liquidation property after obtaining the bankruptcy declaration, industrial and commercial cancellation registration certificate or revocation of license or documents ordered by government departments to close down shall be regarded as bad debt losses;

(2) Due to the debtor's death or being declared missing or dead according to law, accounts receivable with insufficient property or inheritance and no heirs shall be treated as bad debt losses after obtaining relevant legal documents;

(3) The receivables involved in litigation are lost by the effective judgment or ruling of the people's court, or the execution is terminated due to unenforceability despite winning the case, which is regarded as bad debt loss;

(4) For accounts receivable overdue for three years, there is a negotiation record of the enterprise's collection according to law, and it can be confirmed that there is no business contact within three years, the balance after deducting all kinds of funds payable to the debtor and compensating the relevant responsible personnel shall be regarded as bad debt loss;

(5) Accounts receivable overdue for 3 years, if the debtor is abroad and in China, Hong Kong, Macau and Taiwan Province Province, and has not recovered after being collected according to law, and has no business dealings within 3 years, shall be regarded as bad debt losses after obtaining the opinions on termination of collection issued by overseas intermediaries or the debtor's escape and bankruptcy certificate issued by the commercial institutions of Chinese embassies (consulates) abroad.

For the money owed by the internal units of the enterprise group, the creditor shall write off the creditor's rights at the same time as the debtor, and sign a written agreement to provide each other with financial information on the internal handling of creditor's rights or debts.

Baidu Encyclopedia-Bad Debt Write-off