Bad debt calculation
How do you guys back into a bad debt %? On aging receivables, do you consider even 1 day bad debt? Or is there a certain number of days until you consider it delinquent?
How do you guys back into a bad debt %? On aging receivables, do you consider even 1 day bad debt? Or is there a certain number of days until you consider it delinquent?
+48 | Being asked to stay behind and train my replacement | 14 | 3d | |
+45 | New Comp Database - Google Form (Now with Data Validation) | 24 | 8h | |
+30 | What does REPE actually do? | 12 | 1d | |
+28 | Leave brokerage to be GP | 3 | 5s | |
+24 | Seeking Career Guidance in Real Estate Development Post-Graduation | 3 | 11h | |
+24 | Public Homebuilders | 9 | 1d | |
+22 | REPE/Development GPA | 15 | 1d | |
+17 | MSRE/MSRED with no RE experience; Naive to think I’ll land a job afterwards? | 4 | 3d | |
+16 | UC Berkeley MRED vs Columbia MSRED? | 2 | 5d | |
+15 | Hospitality Finance - Perks? | 3 | 6d |
Career Resources
should be stated in internal controls. 30-45 days unpaid after invoice issuance is typically delinquent, but its a sliding scale (older debt > higher contribution to bad debt expense as percentage of the receivable)
Can you explain the last part more? Also, you’re saying after 60 days it’s completely written off?
It depends on the company, probably not a 60 day receivable. They'd take a percentage of it, say 1% (it would more for or less depending on the age of rec.), multiply it by the amount of delinquent receivable, and that would be added to the calculation of allowance for doubtful accounts. Bad debt expense is periodically debited to adjust the balance of allowance for doubtful accounts.
Yup this is exactly my experience at multiple companies. Note variability in different industries can result in different percentages and terms for bad debt
Can you explain this through an example or less accountanty lol
Possimus voluptatem quidem optio sapiente omnis. Quo sit esse non tempora accusamus velit quasi. Soluta beatae voluptatibus temporibus quae vel ducimus quas commodi. Dolores ex ipsum cupiditate velit aliquam.
Repellat quae rerum et officia dolorem nemo. Aliquid illo non amet repudiandae. Ut occaecati aut ipsum dicta excepturi rem.
Accusantium aut sint eius sed. Possimus facere qui aut et. Porro dicta repellendus aperiam. Molestiae vel atque veniam ad id fugit. Totam et velit totam nam a ducimus in. Dolor sint animi molestiae in rem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...