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New Directive Allows CEOs of State-Owned Enterprises to Write Off Uncollectible Accounts Up to 50 Million Birr

Sheger FM · 9 hours ago · Read the Full Story on Sheger FM
New Directive Allows CEOs of State-Owned Enterprises to Write Off Uncollectible Accounts Up to 50 Million Birr
AI SUMMARY

A new Ministry of Finance directive allows CEOs of state-owned enterprises to write off uncollectible accounts up to 50 million Birr per fiscal year under specific conditions.

  • A directive issued by the Ministry of Finance since September 2019 allows chief executive officers of state-owned enterprises to write off uncollectible accounts up to 50 million Birr.
  • Boards of directors are authorized to approve the write-off of uncollectible accounts up to 100 million Birr per fiscal year.
  • Removing these accounts from the financial records does not release liable parties from their debt obligation unless a court or relevant authority rules otherwise.
  • The regulation addresses accounts that have remained outstanding for up to 10 years and are verified as uncollectible.
  • The policy applies to accounts receivable, accounts payable, and institutional assets.
  • Accounts can be written off if a debtor company is bankrupt, a debtor has passed away without sufficient assets, a debtor has absconded, or a court rules the debt is not payable.
  • Write-offs up to 100 million Birr require documented evidence that management and the board made exhaustive efforts to recover the funds.
  • Accounts removed from the financial records must still be tracked for future follow-up.
  • Chief executives can write off minor accounts of up to 10,000 Birr individually, provided the total does not exceed 500,000 Birr in a single fiscal year.
  • Assets valued at 50 million Birr individually can only be removed from the property registry after board approval and review by the regulatory authority.
Read the Full Story on Sheger FM
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