BAD DEBT IN FOREIGN ECONOMIC ACTIVITIES: RECOGNITION CONDITIONS AND WRITE-OFF ACCOUNTING

Abstract

The article is devoted to the study of the problems of recognition of bad debt under foreign economic contracts during the period of martial law in Ukraine and the reflection of its write-off in accounting accounts. The article examines the conditions for recognizing bad debt in accordance with the National accounting regulation (standard) 10 "Receivables", as well as highlights the list of signs that can be used when classifying debt as bad debt, defined by the Tax Code of Ukraine. The information regarding the statute of limitations for specific indebtedness is systematized, depending on the law governing the contractual relations according to the concluded foreign economic contract. Emphasis is placed on the application of the United Nations Convention on the Limitation Period in the International Sale of Goods 1974, regulating the statute of limitations in international sales of goods. In order to avoid mistakes in determining the statute of limitations for foreign economic contracts, it is suggested to carry out an in-depth analysis of the contractual terms taking into account all the circumstances of their implementation and a detailed study of the documentation used to formalize the relevant business transactions. The article highlights the peculiarities of accounting for the write-off of receivables of a non-resident, which is recognized as bad. The procedure for writing off bad debtor indebtedness of foreign buyers is considered: in case the resident creates a reserve for doubtful debts; if no reserve for doubtful debts is created; in case of insufficient amount of the accrued reserve for doubtful debts. The procedure for writing off bad receivables is defined, if the terms for writing them off have passed.