Advance remain with the Supplier
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 April 2010
Dear members,
Our company had given advance of Rs 150,000/- to a Brick klin for supplying bricks. But unfotunetly Brick klin shut down due to some internal problems. since then our advance has been remaining in our Balance sheet. there is very little chance of recovering it. So what to do with the treatment.
Please share knowledge!
thanks
Our company had given advance of Rs 150,000/- to a Brick klin for supplying bricks. But unfotunetly Brick klin shut down due to some internal problems. since then our advance has been remaining in our Balance sheet. there is very little chance of recovering it. So what to do with the treatment.
Please share knowledge!
thanks
06 April 2010
In case, the amount of recovery is very remote and you are sure that it will not be recovered, then you can write off the amount by charging it to the P&L Account.
06 April 2010
AGREE
06 April 2010
BOOKED AS BED DEBTS
06 April 2010
Company should lodge a case with Brick klin but for the time being a provision for Bad Debts should be recognized subjected to policy of the company but these will not be allowed as expenses by the tax department. This will depend on court decision. Simply debiting to PNL as bad debts is only for management purposes.
07 April 2010
If the debts are written off as bad in the books of a/c as per the co. policy after taking reasonable measures for recovering the same or proving to the satisfaction of AO that such measures if taken will be of no use, even under income tax u can claim the same as deduction u/s 36(1)(vii)
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