12 April 2008
A public LTD Co.has bad & doubtfull debt of Rs. 1 crore.But company is ready to make provision for Bad & Doubtfull debt for Rs.15 Lakhs only. what are the consequenses of such case.
12 April 2008
If the provision not made is justified on the basis of possible recovery, the directors can so record in their meeting while considering accounts. Otherwise auditors can qualify the short provision in their report.
A qualified report if not justifiably considered, there can be embarassments on dividend provision and provision for managerial remuneration
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