Cash Recovery on Previously Written-Off Loan
Receiving unexpected payment on a loan that was fully written off in a prior period.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Customer Account | Asset (+) | 250,000.00 | - |
| Loan Recovery Income | Revenue (+) | - | 250,000.00 |
💡 Accountant's Note
Recoveries on written-off loans are recognized as income when cash is received. They are presented as Other Income (Loan Recoveries) in the income statement. The original loan asset is not reinstated — only the cash receipt is recorded.
Practitioner & Systems Framework
💻 ERP Architecture
In SAP and Oracle FLEXCUBE, the off-balance-sheet shadow record (maintained after write-off) is the source for posting the recovery. The cash receipt hits the recovery income account directly. The shadow record is reduced by the recovery amount to track total exposure vs. total recovered.
⚠️ Audit Flags
Auditors verify that all cash recoveries on written-off loans are captured in the recovery income line and not netted against current-year provisions. CBJ financial stability reports track system-wide recovery rates on written-off loans.
📄 Required Documentation
Cash receipt confirmation, shadow record update, loan recovery income schedule reconciliation, and board notification of significant recoveries.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.