Reportedly, net book value reflects not only the bad debt reserve
, but also interest deferrals, allowances for cash option loans (specific loans on which customers can earn a waiver of interest), and allowances for charged off interest.
The collectability percentage is greatly reduced at this age, indicating a much greater risk, and many companies, including ours, analyze and use this as part of their bad debt reserve
The company said that besides lower sales volume, the decline was attributable to write-downs and revaluations, an increase in bad debt reserve
and unfavorable foreign exchange rates.
In addition, mounting delinquencies among hard-pressed consumers resulted in a $135 million pretax loss in Target's credit card business, as the retailer added $245 million to its bad debt reserve
Accounts receivable controls include fluctuations of days sales outstanding balances, tests of reasonableness on the bad debt reserve
and the creation of manual journal entries.
Examples are the bad debt reserve
and the valuation of stocks.
For example, Alliance tracks the accounts sent to collection agencies to assist the utility in determining expected bad debt reserve
Obie last year took a $6 million charge for restructuring its transit contracts and increased its bad debt reserve
The Dole-Roth amendment would offset the revenue loss associated with these provisions by tightening the tax on expatriates, enhancing earned income credit compliance, repealing the special bad debt reserve
rules for thrift institutions, and phasing out interest deductibility for loans against corporate owned life insurance.
The special bad debt reserve
treatment that provides tax benefits - and, hence, subsidy - to mortgage lending by thrift institutions no longer serves a perceivable public policy function and, hence, should be removed going forward.
Under the law in effect before the repeal, a taxpayer could either (1) deduct a reasonable addition to a bad debt reserve
under section 166(c) or (2) deduct a debt that it can prove actually became worthless during the year (under section 166(a)).
24348(b), which is similar to, but not exactly the same as, the federal bad debt reserve
method in effect prior to TRA 86.