Why decrease in provision for doubtful debts is subtracted in cash flow statement as it does not results in any cash outflow?

Dear Student,

A decrease in provision for doubtful debts would mean that now more amount shall be recoverable from the debtors i.e. debtors of the business will increase.

And so, whether you consider decrease in provision for doubtful debts as 'a decrease in current liability' or 'an increase in current asset', both are deducted under 'Operating Activity'.