A statement in the accounts of a creditor of the extent to which it expects to have to write off bad debts, that is, to cease to record them as assets in its accounts. A firm with bad debts must eventually decide to write them off. If it has numerous debtors that may not make the payments promised, it is possible to make a ‘bad debt provision’, naming an amount by which it expects to have to write off bad debts, without the need to specify which particular debts will become bad.