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Investments glossary

Nonaccrual Experience Method (NAE)


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Everyone got caught up in the debate of deflation, Greece and the Ukraine crisis and so expectations were quite low, it now seems the deflation story is a positive one for the euro zone since cheaper oil means consumers spend less on energy and have more money in their purse.

— Christian Schulz

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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