What does ASC 310 stand for?

What does ASC 310 stand for?

FAS ASC 310-30 Accounting for Purchased Loans with Deteriorated Credit Quality.

Is ASC under GAAP?

In US accounting practices, the Accounting Standards Codification is the current single source of United States Generally Accepted Accounting Principles (GAAP). It is maintained by the Financial Accounting Standards Board (FASB).

How does U.S. GAAP value trade receivables?

According to U.S. GAAP, the figure that is presented on a balance sheet for accounts receivable is its net realizable value. —the amount of cash the company estimates will be collected over time from these accounts.

Is allowance for doubtful accounts required by GAAP?

The primary ways of estimating the allowance for bad debt are the sales method and the accounts receivable method. According to generally accepted accounting principles (GAAP), the main requirement for an allowance for bad debt is that it accurately reflects the firm’s collections history.

What is ASC in US GAAP?

The Accounting Standards Codification (ASC) is developed and maintained by the FASB. The ASC is the only source of authoritative GAAP in the US (other than SEC issued rules and regulations that only apply to SEC registrants).

Is bad debt expense considered an operating expense?

The current period expense pertaining to accounts receivable (and its contra account) is recorded in the account Bad Debts Expense which is reported on the income statement as part of the operating expenses.

Is GAAP a direct write off?

The direct write off method doesn’t comply with the GAAP, or generally accepted accounting principles. GAAP states that expenses and revenue must be matched within the same accounting period.

Is GAAP bad debt expense?

Bad Debt Expense Under GAAP, when you make sales to customers, you immediately recognize the revenue on your income statement — even when the customers don’t pay immediately. GAAP requires you to report that $1,500 bad debt expense immediately.

What if actual bad debt exceeds allowance?

Write-Offs When you write off a debt, debit the bad debt allowance account and credit accounts receivable for the loss. This simply shifts the loss from anticipated to real. If your write-off exceeds the amount posted in the allowance account, you’ll wind up with a negative allowance — that is, a debit balance.