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Ahmad's profit & loss account for the year ended 31/12/ shows the following under bad debts account : Bad debts written off $2,000 Increase in

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Ahmad's profit & loss account for the year ended 31/12/ shows the following under bad debts account : Bad debts written off $2,000 Increase in - general provision - specific provision 1,000 800 Y/A Deduction available = Ahmad's profit & loss account for the year ended 31.12. Recovery of bad debts written off $500 Reduction in - general provision Specific provision 400 200 YIA Amount Taxable = Bad debt expenses Adjustments Reason Deductible 1. Trade debts written off Add back Not deductible 2. Non-trade debts written off e.g. loan to staff Deductible 3. Increase in specific provision for trade debts Add back Not deductible 4. Increase in general provision Recovery of bad debt written off / reduction in provision (income) Adjustments Reason Taxable Deduct Not Taxable 1. Recovery of trade debts previously written off 2. Recovery of Non- trade debts previously written off e.g. loan to staff 3. Decrease in specific provision for trade debts Taxable Deduct Not Taxable 4. Decrease in general provision

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