An account (an account receivable) that captures an amount past due in relation to a financial asset. The past-due balance reflects all amounts that have fallen due to failure of a counterparty (e.g., an issuer, a debtor, etc.) to make a payment as per contractual terms. For such accounts, an allowance for outstanding receivables is created using a method known as aging receivables. Days past due are grouped in terms of the number of days passed since a receivable fallen due: that is, days past due: current, 1-30, 31-60, 61-90, and over 90. Each bracket is assigned an uncollectibility percentage that will be the basis for calculation of corresponding provisions.
Accounting
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