Balance sheet consideration of allowance for receivables

With the allowance of receivables we deduct this figure from trade receivables in current assets section of the balance sheet.

However I am a little unsure as to how balance is achieved, i.e. assets = capital + liabilities

Is it through the corresponding debit in irrecoverable debt expenses which appears on the income statement? Irrecoverable debit expenses is deducted from gross profit to get our net profit which is then added to the capital section of the balance sheet.

If so, how do we explain the fact that in the income statement we use a figure that represent a decrease\increase in the allowance for receivables but in the balance sheet we use the actual figure?