Only the annual increase or decrease in the allowance for receivables is deducted from trade receivables in the statement of financial position, while the entire allowance for receivables is charged to administrative expenses in the statement of profit or loss.

Question

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The entire allowance for receivables is deducted from trade receivables in the statement of financial position, and only the change in the allowance is charged to administrative expenses in the statement of profit or loss.

Only the Annual Increase or Decrease in the Allowance for Receivables