Bad Debt Expense

Bad Debt Expense

An item on a balance sheet indicating debt from a credit sale that the creditor is unable to collect. Debt becomes a bad debt expense when the creditor has made all reasonable efforts to collect the debt but has been unable to do so. Many companies set aside an allowance for bad debts to pay for bad debt expenses. While this helps, bad debt expenses still deprive a company of cash flow that is ultimately necessary to keep it in business.
References in periodicals archive ?
Summary: RostelecomEe's EBITDA was impacted by a one-off increase in non-cash bad debt expense, but more importantly by a lower reimbursement for the BDD project vs.
These favorable trends led to a sharp reduction in the bad debt expense recorded in the quarter, which was the biggest factor driving our increase in segment profit.
Comparing bad debt expense each year to write-offs during that year is one measure of the accuracy of bad debt estimates.
Lines 30-32 disclose depletion, depreciation and bad debt expense.
5 million in bad debt expense related to Kmart's reorganization filing.
Q My credit report shows that a creditor has written off what I owe them as a bad debt expense.