What is the post for impregnable accounts?

Contribution to non -impregnating accounts is a record of the accounting statement to reduce total receivables according to the number of accounts that the company is unlikely to be able to collect and write off the wrong debt. This provides a more realistic image of the company's finance by avoiding a situation where it overestimates the amount of receivables to look more money. Accountants can use several methods to come up with this number and must be in line with how they calculate them to behave to behave so that it does not happen that it does not happen that it does not happen. The problem with this method is that companies can overcome the income they expect. With a contribution to the impregnable accounts, the Company determines the average number of accounts that enter the default value and records them in the balance sheet as a "Contra Asset" to compensate for search. This allows companiespredict the wrong debt depreciation by charging them as soon as possible.

For example, a mortgage lender expects a certain percentage of loans to enter failure. It determines this contribution every month based on the number of new mortgages it issues to immediately register receivables, instead of waiting for these accounts. This allows the company to provide a more accurate image of its financial health.

As soon as it turns out that individual accounts are by default and the company cannot expect repayment, it can write them and officially classify them as impregnable accounts. This allows the company to demand costs in the form of poor debt, allowing it to reduce its tax liability. It may take months to negotiate on a delinquent account to decide to classify it as an uncollectible. Thanks to the contribution to the impregnable accounts used by the company in its financial statements, the default value is already an accountovershadowed on statements on the company's claims.

If the company underestimates this number, it can cause problems. The company can be reluctant to write some delinquent accounts and fear that these statements will move its financial statements to the red. This could also be charged with inflating their financial health to fraud for shareholders and other investors, which is a potentially serious fee if people can prove that the company knew that its estimates were off and decided to use them.