I bought an asset worth $500 from a dealer for $469. How would I record this on my balance sheet? Under Canadian GAAP would there be an argument for both recording methods (i.e. record asset cost as $500 or $469)>

Also, let's say receivables are very slow for me. I have no estimates with which to determine the payability of these receivables. What would be the most reasonable action on my part? Record Bad Debt Expense, or wait and delay the expense recording?

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Originally Posted by student007

I bought an asset worth $500 from a dealer for $469. How would I record this on my balance sheet? Under Canadian GAAP would there be an argument for both recording methods (i.e. record asset cost as $500 or $469)>

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You would record it @ $469

According to Canadian GAAP, you must record it at historical cost or lower.

Examples. Investments. Originally 100K. If it goes down to 95K, you recognize the 5K loss. If it goes up to 110K, you recognize ONLY a 5K gain.

Inventory – lower of Cost or market. (therefore, the max it will be is cost)

Quote:

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Originally Posted by student007

Also, let's say receivables are very slow for me. I have no estimates with which to determine the payability of these receivables. What would be the most reasonable action on my part? record Bad Debt Expense, or wait and delay the expense recording?

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Since you have no company historical data to use, then use your industry’s data.

What do other companies in your industry record (3%)? If you think that some will be uncollectible, then record bad debt expense now.