Whenever we have realized that a particular customer is not paying as on time then we create allowance on receivable. Every organisation form a rule to create receivable allowance. Companies based on ageing report create the allowances. If a company is using the accrual basis of accounting, it should record an allowance for doubtful accounts, since it provides an estimate of future bad debts that improves the accuracy of the company’s financial statements. Also, by recording the allowance for doubtful accounts at the same time it records a sale, a company is properly matching the projected bad debt expense against the related sale in the same period, which provides an accurate view of the true profitability of a sale.
Impairment of good will is that when carrying value in the books are more than its fair value.If the company decides it has too much goodwill, then goodwill is impaired. The company writes down goodwill by reporting an impairment expense. The amount of the expense directly reduces net income for the year.
The future value of ASSET values...is an extreme concern for auditors... We always need to assess...
REMOVEDAuditors have a responsibility to remain alert to audit evidence that contradicts other audit evidence obtained. The application of professional skepticism is essential to the critical assessment and questioning of contradictory audit evidence. When the auditor obtains information during the course of the audit that contradicts information obtained from another source, the auditor has a responsibility to resolve the matter and consider its impact on the sufficiency and appropriateness of audit evidence obtained and the effect, if any, on other...