CHARGE-OFF

A company’s expenditure as indicated in its income statement, less net income. Generally speaking, firms estimate its charge-off expenses which might be incurred in the current time period based on its previous records. This will fall under of the following classifications:

1. Debt considered uncollectible by the company and is subsequently written off. This will classified as bad debt expense on its income statement and will be excluded in the balance sheet.
2. Possible one-time extraordinary expense a firm incurred which negatively affects earnings, resulting to writing-down some of its assets. Write-down emerges due to impairments of assets.

POPULAR TERMS

POPULAR ARTICLE