How to write off overdue receivables

First, it should be clarified that receivables are written off in the case, when it expired the term of limitation (three years), and in the case of unrealistic penalties, for example, in case of bankruptcy of the counterparty.

To write off overdue receivables, issue an order for the inventory debt. Also, specify in this administrative document, the composition of the inventory Commission which shall consist of a chief accountant responsible for maintaining accounts with customers and other employees. List and timing of this procedure.

You must then take the receipt with the employee responsible for the accounting of settlements with counterparties, that all data is accurate and include complete information.

All inventory results will be issued in the form of an act (form INV-11), which must be signed by all members of the Commission. You can also create a certificate-the Appendix to this document, which contains extended information. Then create a written rationale will make it in the form of an accounting statement.

After that, on the basis of the aforementioned documents, publish the order on writing off of overdue receivables. And then reflect all of this in accounting by using correspondence of accounts:
Д91 "other income and expenses" sub-account "other costs" K62 "Settlements with buyers and customers" or "Calculations with accountable persons" or 76 "Calculations with different debtors and creditors".

Write-offs must be considered in non-operating expenses. After that the written-off receivable shall be reflected on off-balance account 007 "written off as a loss a debt receivable" for 5 years from the date of debiting.