Provision required?

This query is : Resolved

harish babu (Querist)
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23 August 2012 Dear sir

A company made sales to a customer and the payment is due on 25th of march but the customer informed his inability to pay on 25th and informed the company that he will pay on 5th of april and he has given a promisary note also.Is any provision required in this case as it is year end.

Thanks&Regards

Harish

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
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24 August 2012 when customer is agreeing to pay and given promissory note then it needs to be assessed will promissory note be en cashed.If there is reasonable certainty of realizing the amount then no provision is required otherwise it does require.