Bad Debt Expense

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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.
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Radio station operating expenses decreased mainly due todecreases in digital development and content production costs related to the LaMusica application, special events, barter, bad debt expenses and the impact of a legal settlement offset by increases in professional fees, advertising and commissions expenses.
Constructive Regulation: Peoples Gas benefits from credit-supportive regulatory mechanisms, including a purchased gas adjustment clause that allows for full and timely recovery of gas commodity costs, forward-looking test years, riders for gas pipeline replacement and bad debt expenses and a decoupling mechanism that breaks the link between sales and margins.
Stronger demand with improved leverage, higher realized rates and success fees in North America distressed services coupled with lower bad debt expenses due to recoveries of amounts previously reserved drove the increase in Adjusted Segment EBITDA margin.
The company said the decrease in net loss in Q2 2015 was primarily due to the decrease in bad debt expenses and partially offset by the inventory obsolescence recognized in the second quarter of 2015.
Examination of the financial reports of the corporation showed that financial charges of P850.277 million and bad debt expenses of P448.540 million combined for 57.21 percent and 30.18 percent of the total expenses in 2014.
Westpac Banking Corporation (NYSE: WBC), Australia's second-biggest lender by market value, has reported an 8 percent increase in first-half cash profit helped by loan growth, wealth management income and lower bad debt expenses, The Bloomberg News has reported.
This is quite reasonable because if the firm is expecting to have high rate of default (i.e., bad accounts) it would like to reduce its total credit sales in order to reduce its bad debt expenses and for doing that it should reduce the amount of credit period given to customers.
We found that many hospitals use worksheet G-2 to report bad debt expenses. In those cases, we assume that the hospital did not include bad debt in the net patient revenue, and we define bad debt as the ratio of "bad debt expense" (reported in worksheet G-2) to "total patient revenues" (reported in worksheet G-3).
The adjusted NIPA after-tax profits estimates, which include capital gains and losses and bad debt expenses, provide one conceptual bridge to understand the differences between NIPA growth rates and SOI growth rates (table 2).
MMK's 2Q10 results could be affected significantly by one-offs on the EBITDA line, including provisioning for bad debt expenses. The bottom line is likely to be negatively affected by a forex loss.
Additionally, the review will focus on the company's financial reporting, specifically accounting for allowances and bad debt expenses - which appear to be high relative to rated peers - and related party transactions," the agency said.
Over the long term, corporations can count on bad debt expenses being greatly reduced with automation.