allowance for doubtful accounts

(redirected from Bad Debt Reserve)

Allowance for Doubtful Accounts

Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash flow problems should its credit sales not be repaid as expected. On financial statements, it is important to note that an allowance for bad debts exists for fiscal conservatism and not because one expects a large amount of bad debt to accumulate. An allowance for doubtful accounts is also called a cushion. Banks call these funds the loan loss reserve. See also: Savings account.

allowance for doubtful accounts

A balance-sheet account established to offset expected bad debts. If a firm has made a sufficient provision in its allowance for doubtful accounts, reported earnings will not be penalized by bad debts when the bad debts occur. If uncollectible accounts are larger than expected, however, the firm will have to increase the size of the account and reduce reported income. Also called allowance for bad debts, reserve for bad debts.
References in periodicals archive ?
0 million bad debt reserve adjustment previously reported on January 17, 2007, EBITDA from continuing operations for the fourth quarter was $191.
The 2006 profit (loss) totals shown above for the fiscal year and fourth quarter include a $63,000 charge to bad debt reserve related to amounts due from a previous systems customer.
06 per share) in 2012 reflecting the write-down of certain real estate assets, and a charge for a bad debt reserve of $2,000,000 (or $0.
Excluding the additional bad debt reserve and the gain on sale of assets described previously, same hospital EBITDA from continuing operations for the second quarter would have been $198.
The additional charge-off of $60,000 increases its experienced-based reserve by $10,000 / 6) to $110,000 and decreases its bad debt reserve by $60,000 to $40,000 ($100,000 - $60,000).
Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (1) EDMC was overstating revenue by not properly increasing its bad debt reserve upon student withdrawals; (2) EDMC was overstating goodwill; (3) EDMC manipulated federal student loan and grant programs in order to appear to be in compliance with new federal regulations enacted in June 2011; (4) EDMC's predatory and deceptive recruiting and enrollment practices violated federal regulations enacted beginning in June 2011 and (5) as a result of the foregoing, EDMC's public statements were materially false and misleading at all relevant times.
1361 (b)(2)(B) and 585 apply, whether or not the bad debt reserve method is allowed or used.
6 million related to the increased bad debt reserve, $0.
The Company indicated that Addus had to increase its bad debt reserve levels by $1.
The results from discontinued operations for 2015 were also favorably impacted by the reversal of a previously recorded bad debt reserve of $1,500,000 ($945,000 after tax, or $0.
during the quarter will probably force Ameriwood to increase its bad debt reserve, Miglore added.
Thus, beginning with the 1997 tax year, any financial institution can make an S election provided that it does not actually use the bad debt reserve method of Sec.