Bookkeeping

Write-downs and write-offs are two ways that businesses account in their financial statements for assets (including physical assets and outstanding credit balances) that have lost value. Write-offs are the more severe and final of the two, indicating that the company believes the asset to be worthless. On the income statement, a write-down is recognized as […]

The primary purpose of the Provision for Credit Losses (PCL) is to protect financial institutions from potential credit losses, which can arise from borrower defaults, deteriorating credit quality, or other adverse events. You can record your allowance for credit losses on your financial statements. They can be either a separate line item or a deduction