Writeoffs For 200304 And 200203

first_imgThe Nova Scotia government has cleared its books of uncollectibledebts for the last two fiscal years. Each year the governmentwrites off amounts owed by companies or individuals as a resultof bankruptcies, unpaid fines or uncollected fees and taxes. “Writeoffs are an unavoidable cost of doing business,” saidFinance Minister Peter Christie today, Feb. 12. “In some cases,these debts have been on the books for a decade or more, andremoving them now is just a formality.” For 2003-04, $9.3 million was written off because of businessclosures. This was primarily due to the write-down of the 1997Orenda Recip investment. Another $2.8 million was written offbecause of foreclosures, deaths, settlements and unpaid fines. For 2002-03, $20.2 million was written off as a result of transactions, made from 1992 to 1999, that ended in bankruptcy,receivership, or negotiated settlement. Another $9.3 million inadvances to long-term care facilities in 1996 has been forgiven.The government agreed to forgive these advances as the facilitieswere chronically underfunded for several years. Another $2.5million was attributable to unpaid fines, fees and taxes. Like any collection agency, government departments try to recoverthe money owed to them, but sometimes the cost of trying torecover a debt is more than the liability is worth. In othercases, even though an amount may be written off from anaccounting perspective, government will continue its efforts tocollect, particularly in the case of unpaid fines. Writeoffs are expensed and audited in previous years, but areformally recognized in subsequent fiscal years.last_img