bad debt


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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 ?
In instances where bad debt performance is better than average (less than 10 percent), it's likely that patient demographics (for example, propensity to pay) and follow-up policies are resulting in higher collections and, subsequently, fewer bad debt write-offs.
It appears S's bad debt loss is considered a business bad debt since his guarantee was spurred by his business motive to retain his best supplier.
To assess the impact of Massachusetts' health care reform on hospital bad debt, we consider the reform a natural experiment.
Its first quarter performance marks a significant turnaround on the pounds 6.3bn losses reported for 2009 after the HBOS takeover and financial crisis left Lloyds with a colossal pounds 24bn in bad debts.
PROFITS at water giant Severn Trent beat forecasts following a range of cost savings across the business and a tight rein on bad debts.
Around 75% of accountants in Cardiff have seen an increase in clients with bad debt in recent months.
"Bad debt collections often are viewed by management as being independent from the resident approval guidelines," said Miria Rabideau, Regional Vice President with Associated Estates Realty Corp.
THE scale of the credit crunch and the anticipated downturn in business is illustrated in a big upturn in companies seeking protection from bad debt.
A properly formulated portfolio strategy, executed with the right processes, resources and organizational structure, will keep cash flowing and minimize bad debt exposure.
Although the legal action was settled out of court, John claimed a bad debt deduction in the amount of $491,054 on his 1995 tax return.
But that's not all businesses have been doing to stem bad debt and improve cash flow.
Japan's economy has been ailing for more than a decade, and the conventional wisdom is that the world's second largest economy won't improve until Tokyo gives top priority to dealing with the mountains of bad debt held by Japanese banks.