Book full amount as an expense in the PnL.
Respective asset on the balance sheet becomes zero.
Loan recorded on the balance sheet of the company as an Asset.
Provisioned amount reflects as an expense on the PnL, and reduces loan(asset) on the balance sheet. At end of the FY, loan (asset) on the B/S will reflect NET amount. And, the cycle continues.
Above is similar to what happens for Fixed Assets (expensed as D&A) and Receivables (expensed as Bad Debts Expenses under Other Expenses).
There might be many variations to book. For instance, receivables that can not be collected are reported as Bad Debt Expenses under Other Expenses.
Yes, I think. Since, it’s not an operating income.
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