Treatment of Provision for Doubtful Debts while preparing Cash flow

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The Balance Sheet shows a balance of Trade Receivables (as on 31-12-2016) 250,000 (prev. year 100,000) and the provision for Doubtful Debts as 15,000 (Prev. Year 10,000).

The adjustments specifies that the "All Trade Receivables are good."

What treatment should be given to the Provision for Doubtful Debts while preparing the Cash flow as at the end of 31-12-2016?
 
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Provisions are typical non-cash items, so you should reflect the movement of this provision as a non-cash item adjusting the profit before tax. As in your case, the provision increased, i.e. additional cost was incurred, you should add the 5,000 back to the PBT as an increase in cash.

In case of any questions, let me know.
 

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