Provision Fund for Bad Dept

Regardless of accounting policies a company may have, Japan Tax Code has severe limitations on what they allow as provision fund for bad debt in dealing with accounts receivable. Depending on the status of legal liquidation, limit is decided. The most common legal proof is notice from lawyers and court which states the condition of debtor. The date of this notice will determine the timing of allowing a provision fund for bad debt. Usually, this notice from lawyers and court are received by the sales personnel. Guidance to sales personnel to pass this notice to the accounting personnel in charge will be essential for timely process. You should always consult with the tax accountant on the timing and conditions when making provisions for bad debt.

“Our Group operates worldwide in the fashion and luxury goods sector and is active in the design, production and distribution of a wide range of products that includes prêt-a-porter, footwear and leather goods.

We started our collaboration with Nagamine & Mishima Accounting Office since we decided to establish our subsidiary Aeffe Japan in November 2008. N&M supported us during the start up of this company in particular with the accounting, payroll, cash management and tax services and gave their total collaboration when Aeffe Japan built-up Its own financial department. We found a very high quality support and punctual answers to different one-shot questions that also helped us to understand, in an easy way, a really different way to operate.

After the start up phase, we decided to confirm to N&M the tax and payroll services for Aeffe Japan and for Moschino Japan, our other Japanese subsidiary, and the daily relationship with them passed from the Italian HQ to the Japan subsidiaries in a very simple way.

We are very satisfied to have chosen N&M.”

Andrea Pagliarani, Group Financial Controller
Aeffe Japan KK