# Trade Receivables — Ageing Schedule Disclosure
## Why Ageing Matters
Trade receivables sitting on the balance sheet are only as good as their recoverability. The longer a debt is outstanding past its due date, the higher the risk it turns bad. Schedule III of the Companies Act, 2013 therefore requires entities to present a Trade Receivable Ageing Schedule so that users of financial statements can independently judge credit risk.
## Auditor's Role on Provisioning
Before signing off, the auditor must:
- Check whether provisions for doubtful debts have been made at appropriate rates considering the recoverability of each ageing bucket.
- Prepare a schedule of movements of bad debts (opening balance + additions − write-offs − recoveries = closing balance).
## Format of the Disclosure
The schedule classifies receivables along two axes:
1. Status — Undisputed vs Disputed; further split into Considered Good and Considered Doubtful.
2. Ageing buckets — measured from the due date of payment (not invoice date):
- Less than 6 months
- 6 months to 1 year
- 1 to 2 years
- 2 to 3 years
- More than 3 years
| Particulars | <6M | 6M–1Y | 1–2Y | 2–3Y | >3Y | Total |
|---|---|---|---|---|---|---|
| Undisputed — Considered Good | ||||||
| Undisputed — Considered Doubtful | ||||||
| Disputed — Considered Good | ||||||
| Disputed — Considered Doubtful |
## Separate Disclosure of Unbilled Dues
Unbilled dues (revenue recognised but invoice not yet raised) must be disclosed separately — they are not part of the ageing buckets because no due date exists yet.