![]() ![]() It may be a little less." The IMF did not believe growth would fall to 4 or 4.5 percent, as some foresaw. "We expect that China will have a growth rate of 6.8 percent. "The slowdown was predictable, predicted, unavoidable," Lagarde was quoted as saying. ![]() #100 WRITEDOWN OF DEBT DRIVER#Turning to China, Lagarde said she expected the country's economic growth rate to remain close to previous estimates even if some sort of slowdown was inevitable after its rapid expansion.Ĭhina devalued its yuan currency this month after exports tumbled in July, spooking global markets worried that a main driver of growth was running out of steam. The interview made no mention of whether the IMF will take part in the new bailout, which Lagarde has previously said it will make a decision on by October. We are not speaking about cancelling debt." Companies have different methods for determining this number, including previous bad debt percentages and current economic conditions.įor example, if a lender's bad debt represented 2% of its total loans last year, and the economy has significantly improved since then, it may only decide to set aside a bad debt reserve of 1.5% of its total loans this year."We are talking about extending maturities, reducing rates, (making) exemptions for a certain period of time. Under this method, the company creates an "allowance for doubtful accounts," also known as a "bad debt reserve," "bad debt provision," or some other variation. Basically, this method anticipates that some of the debt will be uncollectable and attempts to account for this right away. The alternative is called the allowance method, which is widely used, especially in the financial industry. Find Debt Writedown Latest News, Videos & Pictures on Debt Writedown and see latest updates, news, information from NDTV.COM. MUMBAI/HONG KONG (Reuters) - The unexpected writedown of some bonds issued by crisis-hit Indian lender Yes Bank Ltd as part of a state-led rescue is set to raise borrowing costs and make capital-raising tougher for other banks, investors and analysts said.Specifically, companies generally cannot say for sure whether or not a debt is uncollectible for some time after the sales have taken place, which can lead to an inaccurate portrayal of accounts receivable on the balance sheet. Percentage of bad debt = ($3 million / $100 million) X 100 = 3% The bad debt expense formulaįor example, if a company sells a total of $100 million worth of products on credit during a certain year, and $3 million of this amount turns out to be uncollectible, we can calculate the percentage of bad debt as: Using this number, dividing by the accounts receivable for the period can show the exact percentage of bad debt. The first method is known as the direct write-off method, which uses the actual uncollectable amount of debt. There are two main methods companies can use to calculate their bad debts. Divide the amount of bad debt by the total accounts receivable for a period, and multiply by 100. The basic method for calculating the percentage of bad debt is quite simple. Therefore, it can be useful to calculate and monitor the percentage of bad debt over time. If a company's bad debt as a percentage of its sales is increasing, it can be a sign of trouble. These debts are worthless to the company and are written off as an expense. The term bad debt refers to outstanding debt that a company considers to be non-collectible after making a reasonable amount of attempts to collect. Most companies sell their products on credit, for the convenience of the buyers and to increase their own sales volume. Too much bad debt could be an indication of trouble. Recently, two interesting new classes of debt with loss-absorbing features, write-down debt and contingent convertible debt, have been issued by various. ![]()
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