06-13-2009, 03:59 PM
Why we reverse provision of bed debts at the openning of the year. For example, At the year end, provision is 1000, debtors are 20000, we write off provision from debtors and closing balance of debtors are 20000-1000=19000 which is shown in the balance sheet. At th start of openning of a new year, provisions are add back and the balance sheet contains debtor balalanc which is 19000+1000=20000. why is happened. Tell me the solid reason according to IAS