Ill. Admin. Code tit. 74, § 320.40 - Procedures for Estimating Uncollectible Receivables
a) Each agency must maintain records of
"uncollectible receivables" which are defined as an agency's estimate of
outstanding receivables which will ultimately be uncollectible.
b) In making its estimate of uncollectible
receivables, an agency shall consider the following standards:
1) estimates of uncollectibles must be based
upon prior collection experience for each type of receivable maintained by the
agency; and
2) as a debt ages, the
probability of collection decreases.
c) Within the aging categories established
pursuant to Section
320.30, each Agency
shall develop a percentage factor for uncollectibility. The percentage factor
shall be calculated from the ratio of uncollectible receivables to total
receivables, based upon the Agency's historical data for each receivable type.
The uncollectibilty factor shall be applied to future gross receivables within
the aging categories to determine the "net receivables," which are defined as
gross receivables minus uncollectible receivables.
Notes
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