A provision for depreciation and bad debt are subjective. Depreciation is subjective. The depreciation is the reduction in the value of an asset due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion or other such factors. Depreciation is the historical or purchase cost of an asset across its useful life. The depreciation, when in technical term is the allocation of the historical cost of an asset across time periods. There is no relationship with market price and value of the asset. For example, everything can cause depreciation - Vehicle can use 10 years in Singapore but 20 years in Myanmar. Drive Honda can last for 15 years in Singapore but 20 years in Myanmar. Computer can use 2 years in Singapore but 5 years in Malaysia. The quality, and life of an asset depends on people. Some people can change in 2 years and some can change in 5 years. Bad debt is real. For example, customer becomes bankrupt. Bad debt provision is not actually happened but we assure it could happen and usually we estimate by a percentage of credit sales and aging debtors. For example, customer credit is - < 30 31 < < 60 61 < < 90 02.% 1% 1.2% Historical data are very subjective. In this case, if optimistic person, imply lower. Management like CEO, Sales Manager are usually optimistic. They hope that customer will pay. If pessimistic, imply higher. Accountant and auditor are pessimistic. Investors need information on ‘ material’ expenses. Materiality is something that important, something that has a substance. You want to look at material because it makes you save time, more effective and more efficient. Material expense is important because record every single expenses. But any items more than 10% cannot be put in ...