An aged accounts receivable
report shows the amounts in accounts receivable
according to how long they have been outstanding,
such as current, over 30 days, over 60 days, and
over 90 days. This report is used at year
end to calculate the allowance for doubtful
accounts. When amounts are outstanding over
90 days there is much less likelihood that they
will be eventually collected.
When it is doubtful that accounts receivable will
be collected, income from business or property can be reduced by
claiming a reserve under s. 20(1)(l) of the Income Tax Act.