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in Banking by (681 points)

I am aware that people use the provision of doubtful debts to relate to expenses on a particular income statement whereas others relate it to assets on the balance sheets. Either way, do you regard it as an operating expense?

2 Answers


Yes, I would certainly regard bad debts owed to my business as an operating expense.

The provision is always related to income because the value itself is anticipated bad debt.  The only way a person is going to relate the provision to assets is if they are using asset values to determine how much their provision should be.