bad debt


Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.
Related to bad debt: Bad Debt Expense, Bad Debt Recovery

Bad debt

A debt that is written off and deemed uncollectible.

Bad Debt

Debt from a credit sale that the creditor is unable to collect. Debt becomes bad debt when the creditor has made all reasonable efforts to collect the debt but has been unable to do so. Often, this occurs when the debtor declares bankruptcy or when pursuing collection attempts further will cost more than the debt itself. A company writes off bad debt as an expense, which reduces its taxable income. However, it also deprives the company of cash flow that is ultimately necessary to keep it in business.

bad debt

an accounting term for money owed to a company by customers or borrowers which is highly unlikely to be paid because, for example, a customer has become insolvent (see INSOLVENCY). Such bad debts are written off against the PROFITS of the trading period as a business cost. See CREDIT CONTROL, DEBTORS RATIO, DOUBTFUL DEBTS.

bad debt

an accounting term for money owed that is unlikely to be paid because, for example, a customer has become insolvent (see INSOLVENCY). Such bad debts are written off against the PROFITS of the trading period as a business cost. See CREDIT CONTROL.
References in periodicals archive ?
Nghia said, With such measures of the central bank and credit institutions plans to sell bad debt, we believe that VAMC s goal to buy VND70-100 trillion worth of bad debt is obtainable.
In the event of a customer being unable to pay up, the business with bad debt protection still gets paid.
However, counter to the way implemented by many taxpayers, the repeal of the reserve method does not require them to rely on the write-off entry recorded for financial accounting purposes; Congress intended to allow a deduction for partially worthless business bad debts in the year in which ascertained worthless, provided they are charged off by the taxpayer.
But we use a range of methods to pursue bad debt until it becomes uneconomical or impossible to recover it as when the debtor dies.
The tax tip of the week is to check each bad debt situation and only work for owners who pay promptly.
There are continuing arguments among policymakers and analysts about the size of bad debt because of the obscure Japanese methods of classifying debts as between "troubled" loans and truly nonperforming loans.
In both Japan and Turkey, bad debt is a symptom, not the cause, of economic woes.
The group agreed upon a number of criteria for a uniform bad debt statute, including a definition, statute of limitations, tax due on the bad debt, refunds of bad debt credit, and provision of a deduction from gross sales in the period the debt is deducted.
On his personal income tax return, the taxpayer deducted the unpaid loans as a business bad debt.
A 32 percent increase in the size of portfolios since 1994, coupled with a 34 percent decrease in bad debt since 1991 has helped U.
NEW YORK -- Link to Fitch Ratings' Report: For-Profit Hospital Insights: Fitch's Annual Review of Bad Debt Accounting Policies and Practices