Investments glossary

Nonaccrual Experience Method (NAE)

The Nonaccrual Experience Method (NAE) is an accounting procedure allowed by the Internal Revenue Code (IRC) for handling bad debts. This method can only be applied to bad debts for services performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, or the performing arts. The company in question also must have average annual gross receipts for any three prior tax years of less than $5 million.

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