Parrot (asker) Dec 2, 2011:

What I'm saying is Jenny's verb is correct, but the object of it isn't (not her fault). The error is in the original, which lumps two concepts into one. If you factor in marybro's explanation, it would work out.

Parrot (asker) Dec 2, 2011:

@marybro Your second scenario is it. There seems to be a friendly relationship with the debtor. I'll also admit the original is far from brilliant in its clarity. The paragraph I posted is not as it stands in the original: it's a whole sentence mishmashed together I just paraphrased.

marybro Dec 2, 2011:

I read this two ways....the company did not downgrade the collectibility of the customer due to longstanding history...or they did not increase their allowance for doubtful accounts on the balance sheet as recommended. The company has to justify/disclose when the bad debt writeoff procedure is not in compliance with set collection standards, for example, a percentage of sales or significant aging. As you say, the established procedure or quantifiable materiality policy is not disclosed here. It appears that based on long history, they are standing by the customer.

James A. Walsh Dec 2, 2011:

@Parrot: I see what you mean about "downgrade" I'm not an accountant, but the only other options I thought of is "restrict" or "place restriction on"...

Jennifer Forbes Dec 2, 2011:

Bad debts Well, bad debts can be "written off". I'm not an accountant, but I translate accounts documents constantly.

Parrot (asker) Dec 2, 2011:

Ok, accountants out there What do you do for bad debts on a balance sheet?

Parrot (asker) Dec 2, 2011:

@Jenny Downgrade was also my first reaction, but I found its use financially referring to, for instance, telling a bank you don't need certain credit facilities, etc. Here they talk about compensating (previsiones). For the rest, I've found "materialidad" defined in kudoz as "importancia relativa", and it helps. Not exactly what I needed, but it helps.