The distinction between project performance issues and credit deterioration is one of the most complex aspects of revenue recognition and receivables accounting. This paper examines the treatment of uncollectible amounts under International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (US GAAP), highlighting the importance of proper classification, presentation, and disclosure. It further explores the implications for businesses operating in the Middle East, where commercial practices and payment behaviors create unique challenges for accountants and auditors. Drawing on recent guidance and examples, this analysis offers practical recommendations for controllers, finance teams, and external auditors to ensure compliance and enhance financial statement transparency. Keywords: IFRS 15, IFRS S, ASC c0c, ASC 310, Revenue Recognition, Expected Credit Losses, Bad Debt Provision, Receivables Impairment, Credit Deterioration, Revenue Adjustments.
Kamal et al. (Fri,) studied this question.
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