Question And Answer
Subject: Taxability of recoverability of Expected Credit Loss
Querist: Om Prakash Saraswat
Answered by: Reply of the Expert is awaited;
Tags: ,
Date: May 17, 2021
Query asked by Om Prakash Saraswat

Dear Sir.

While adopting Ind AS, the company provided for Expected credit loss by adjusting from the retained earnings in the opening balance sheet as at 1st April, 2016. No claim for write off was claimed under Income Tax in the Income Tax Return.

Now, in the current financial year, the company has recovered the entire amount from the company under the settlement arrived at with the company to whom advance was made.

Now, if we show the amount recovered as Other Comprehensive Income , I feel that  then neither  it need to be first shown as income and then deduction.

Some people feel that, the amount recovered should be shown in the main body of profit and loss statement and the amount shall be reduced from the taxable income.

I seek your kind guidance in the matter.


O.P. Saraswat

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