11 November 2011
The PO contains a LD clause of 5% if delivery schedule is not maintained. We have invoiced the full value (100%) of the purchase order value even though there was delay in delivery. 100% invoice value was booked as income in P&L A/c. In the next year, the customer settled only 95% after applying the LD Clause. Now can we claim this 5% as non-recoverable and write it off as bad debts in the year when 95% was received?