CPC 38--Financial instruments: Recognition and Measurement--adjustment to the allowance for doubtful accounts
due to the adoption of the incurred loss criterion instead of the expected loss criterion.
Due partly to the provision of allowance for doubtful accounts
, operating income and ordinary income decrease 164 million yen and 175 million yen, respectively.
The revenue procedure allows taxpayers to use any reasonable method to determine the amount of the allowance for doubtful accounts
that is attributable to currentyear NAE-eligible accounts receivable.
On December 17, 2010, the FASB took the uncommon step of issuing for comment a revised ED, Presentation and Disclosure of Net Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts
, which reflects the EITF's final consensus.
* Comparing the beginning allowance for doubtful accounts
to subsequent write-offs determines the adequacy of the existing allowance.
Its net income for the second quarter 2009 includes expenses of USD54m before tax comprised of USD16m associated with employee severance and reorganisation costs and USD38m associated with increasing allowance for doubtful accounts
In this ratio, take the net accounts receivable, after the allowance for doubtful accounts
, and divide it by average daily sales--determined by taking the 12-month sales total and dividing by 365.
The healthcare information technology company forecast fourth-quarter earnings far below estimates, partly due to lower-than-anticipated up-front license revenue and a higher allowance for doubtful accounts
. Margins related to certain third-party software were lower than previously projected, mainly because of market pricing pressures, the company said.
Among the myriad of changes: contingent assets and liabilities associated with an acquisition would be recognized at the date of the acquisition at fair value, with any subsequent changes reflected in earnings (not as an adjustment to goodwill); research and development costs would be capitalized at the date of acquisition; acquired accounts receivable would be recognized at fair value (that is, no separate allowance for doubtful accounts
); and all acquisition-related costs paid to third parties would be expensed as incurred.
Allowance for doubtful accounts
: The Association extends credit to various customers for use of mailing lists and advertising.
ACCOUNTS RECEIVABLE -- The Board is of the opinion that all of the Association's accounts receivable are fully collectable and no allowance for doubtful accounts
The company completed a comprehensive asbestos ground-up study in 2003, following which reserves were strengthened by $331 million, including $158 million allowance for doubtful accounts
related to reinsurance recoverables.