We have quite a few words on this one, starting with Bad Debts then Big Bath provisions. To round out the episode, we combine discussions on Bank Overdraft and Borrowing Costs.

Bad Debts: definition of Bad Debt, discussion of how this itself is also an accounting estimate and a brief discussion on how companies decide which debts may be irrecoverable on their ledger.

Big Bath Provisions: A definition of provision, and an example of how companies used to be able to use big bath provisions to smooth out the impact on their accounts and how accounting standards changes have now resolved this problem.

Bank Overdraft: What is meant by overdraft, and the difference between having an overdraft facility in place and how you account for an overdraft once it's been utilised?

Borrowing Costs: What are Borrowing Costs, alternative terms used for Borrowing Costs and a brief look at how it is accounted for and presented when shown in the statement of profit or loss account.