Using a special G/L transaction, you can post an individual value adjustment for doubtful receivables. In doing so, you post the doubtful receivable to the customer account and to an expense account.
Using a special G/L transaction has the following advantages:
The following example describes how you use the special general ledger transaction to post doubtful receivables. For more information on special general ledger transactions, see the FI Accounts Receivable and Accounts Payable documentation.
You have posted receivables of $8000. The sales tax portion is $1043.48. You want to display this as a doubtful receivable at the balance sheet key date. In this example, we will assume that both doubtful and uncollectable receivables are to be displayed in the same account.
You need to make the following postings when creating individual value adjustments and when writing off doubtful receivables:
Prerequisites
To be able to post individual value adjustments as a special G/L transaction, you must fulfill the following conditions:
You will also need an account to which you can post the expenses from the individual value adjustment. This account must be tax-relevant if you want to post the expense and revenue for the individual value adjustment as well as sales tax to this account.