Question
Cyber Systems Pty Ltd is a provider of web and mobile based search and booking platforms. Travel agencies throughout Australia engage Cyber Systems to design
Cyber Systems Pty Ltd is a provider of web and mobile based search and booking platforms. Travel agencies throughout Australia engage Cyber Systems to design and maintain their travel search and booking platforms. As a company specialising in the design and setup of search and booking platforms, Cyber Systems is able to provide clients with better quality platforms, more efficiently than they could otherwise do through employing their own staff.
The COVID-19 pandemic has hit travel agencies particularly hard, with international travel largely coming to a halt and a substantial decline in domestic travel. For Cyber Systems, this has meant that clients have cut back requesting new platform designs and reduced system maintenance requests as much as possible. Many clients are experiencing great financial difficulty and have delayed paying amounts owed to Cyber Systems.
Question
Explain with reference to one qualitative characteristic why the direct write off method was deemed appropriate prior to the COVID-19 pandemic and why it is unlikely to be appropriate since the pandemic
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