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A debtor who owes ₹ two lac to the Compa...

A debtor who owes ₹ two lac to the Company is rumoured to be declared insolvent. Will you disclose this information in the books?

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Yes. As per convention of conservation, all anticipated losses should be recorded. But all anticipated gains should be ignored. Hence, provision for doubtful debts should be created in anticipation of actual bad debts.
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DK GOEL-ACCOUNTING PRINCIPLES-HIGHER ORDER THINKING SKILLS (HOTS) QUESTIONS
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  10. Identify the value involved in the assumption of going concern.

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  11. Why fixed assets are not shown in the books at market value?

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