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The Salamander Company has evaluated its receivables, and has identified the following possible credit losses: Note #1 has recently deteriorated in credit quality. For Note
The Salamander Company has evaluated its receivables, and has identified the following possible credit losses:
- Note #1 has recently deteriorated in credit quality. For Note #1, Salamander estimates the present value of credit losses occurring in the next twelve months is $50,000, and the present value of credit losses occurring after twelve months is $20,000.
- Note #2 has not deteriorated in credit quality. For Note #2, Salamander estimates the present value of credit losses occurring in the next twelve months is $5,000, and the present value of credit losses occurring after twelve months is $10,000.
If Salamander is reporting under IFRS and therefore uses the ECL model, it would recognize a bad debt expense of:
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