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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Impairment of financial assets – ACCA SBR
Hi, if possible would you be able to explain Impairment of financial assets again, as i found it very hard to under on the lectures video.
thank you
You have to set up an ALLOWANCE FOR INPAIRMENT account (which we used to call ‘provision for doubtful debts’)
Initially the balance on the account will be 12 month credit losses – copy the number ‘lifetime losses’ and multiply by the percentage given
If things go badly the balance on the account will be a much bigger number – lifetime credit losses- copy the number from the question
The double entry for movements on the allowance account is the P&L