Accounting for unsecured supplier claims

[accountingnewbie]

Hi,

I would like advice on how to treat a claim on a supplier who is not expected to pay?

Thank you!

 

[bklynboy]

You should write it down to recoverable value - if you do not expect to collect anything write it off as a full loss. If you were holding a valuation allowance against these receivables then you also need to release the portion of allowance set aside for this.