How to record recovery of written-off debt
Accounting for cash received from a customer after the financial asset has been previously written off from the books.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash and Bank | Asset | 2,500.00 | - |
| Impairment Gain (P&L) | Revenue | - | 2,500.00 |
💡 Accountant's Note
Recoveries of amounts previously written off are recognized in profit or loss as a reversal of the impairment loss, effectively increasing the net income for the period.
Practitioner & Systems Framework
💻 ERP Architecture
Use a specific 'recovery' transaction type in the AR module to link to the original write-off history.
⚠️ Audit Flags
Large 'other income' entries that should be classified as impairment reversals.
📄 Required Documentation
Bank statement and evidence of previous write-off approval.
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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.
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