Accounting for an irrecoverable receivable

Updated March 2026 - An irrecoverable receivable should not be accounted for like an ordinary unpaid invoice. The key is to distinguish the doubtful stage, any impairment provision, and then the point at which the loss becomes certain and final. That sequencing protects both the accounting treatment and the tax position.

See also tax package definition, tax package guide and reverse-charge VAT.

French tax guidance distinguishes between:

• ▸a doubtful or disputed receivable, where non-collection is probable;
• ▸an irrecoverable receivable, where the loss is certain and definitive.

In practice, the sequence often looks like this:

• ▸reclassification to a doubtful customer account;
• ▸impairment provision if the loss is probable;
• ▸recognition of the loss in expense when it becomes definitive.

The French chart of accounts provides the reading framework here, using the appropriate customer, impairment and loss accounts depending on the facts.

VAT is not automatically recoverable at the first sign of a payment difficulty. French tax guidance sets precise conditions for adjusting VAT when non-recovery has become final.

Hayot Expertise insight: the classic mistake is either writing off an invoice too early as a final loss or, on the contrary, leaving a seriously compromised debt untouched for too long without provisioning or documenting the file.

• ▸reminders;
• ▸formal notices;
• ▸evidence showing the debtor's default;
• ▸documentation for any VAT adjustment where relevant.

We can qualify the stage, entries and VAT impact.

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In 2026, accounting correctly for an irrecoverable receivable means distinguishing what is probable from what is final, and documenting every stage. That discipline is what protects both the profit figure and the VAT treatment.

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