Many companies carry unpaid customer receivables on their balance sheets for months or even years.
Businesses should regularly assess:
- the likelihood of collection,
- the age of receivables,
- collection procedures,
- potential impairment.
Proper accounting treatment not only improves the accuracy of financial statements but may also affect the tax deductibility of impairment losses.
➡️ Practical advice: Review outstanding receivables regularly and maintain appropriate documentation supporting any impairment decisions.
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👉 K2A helps businesses correctly account for receivables and assess their tax implications.