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An accounting entry that properly reflects contingent liabilities.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.


Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The funds that are earmarked by a firm from its retained earnings for future use, such as for the payment of likely-to-be-incurred bad debts. The existence of such a reserve informs readers of the firm's financial statements that at least a part of the retained earnings will not be available to the stockholders. See also allowance for doubtful accounts, reserve for contingencies.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Kazakhstan will supply electricity to Tajikistan for its additional water from the Syrdarya River, Minister of Energy and Water Reserves of Tajikistan Usmonali Usmonzoda told a press conference recently, Avesta reports.
The project, which has been delivered to reduce demand and recycle water, includes a 160-kilometre pipeline that connects the water reserve site in the Liwa desert, on the border with Saudi Arabia, to a distribution network in Abu Dhabi city.
The Environment Agency - Abu Dhabi (EAD), is to turn a global spotlight onto strategic water reserves at this month 's International Water Summit (IWS), which runs at Abu Dhabi National Exhibition Centre from January 15-18 as part of Abu Dhabi Sustainability Week.
The water reserve was slippery and not maintained properly by Ambience management.
ARHEPP also said that the extreme hot weather is fast drying-up the water reserve.
"The Middle Atlas forests are Morocco's main water reserve and any disruption there has repercussions for the rest of the country."
Such quantity is consumed from underground water reserves and is not recovered.
'The large water storage tanks do not have water because the water reserve margin is not much and water is channelled straight to houses,' he said at a press conference after attending a National Transformation 2050 Dialogue and Sustainable Development goals 2030 at the Management and Science University here today.
"Less than 200 km away from Abu Dhabi City, you have this high-quality water reserve in the ancient natural aquifers of dunes in Liwa," she said.
Fedros Roussis, Senior Hydraulic Engineer at the Department said: "Some 3.7 million cubic metres of water flowed into the dams in the last twenty-four hours bringing the total water reserve up to 55 million."
Water reserve in Rawal Dam and Khanpur Dam is left for two months only.

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