-Receivables are financial assets that represent a contractual right to receive cash or another financial asset from another entity 1-2 .What is Receivables - Receivables are claims which are expected to be settled by receipt of money.

1-3 oTrade oNon-trade . receivables ± receivables other than trade receivables.Classification As to source receivables ± those arising from sale of goods or services in the normal course of business. The usual types are accounts receivable and notes receivable.

Other names of accounts receivable are customer¶s accounts. 1-4 . trade debtors. Notes receivable are those supported by formal promises to pay in the form of notes. and trade accounts receivable.Classification Accounts receivable are open accounts or those not supported by promissory notes.

Classification As to timing of collection oCurrent receivables ± those that are expected to be collected within twelve months from balance sheet date. however. . Generally. portion not collectible within twelve months from balance sheet date should be disclosed. oNoncurrent 1-5 receivables ± receivables not classified as current. trade receivables are classified as current.

1-6 .Presentation Trade receivables and nontrade receivables which are currently collectible shall be presented on the face of the statement of financial position as one line called trade and other receivables.

000 150.000 6.000 100.Presentation However. For instance.300.000) 1.000.000 1-7 . the details of the total and other receivables shall be disclosed in the notes to financial statements.000 (200. the note disclosure may appear as follows: Accounts receivable Allowance for doubtful accounts Notes receivable Accrued interest on note receivable Advances to officers and employees Dividend receivable Total trade and other receivables 5.000.000 250.

receivable are current assets if collectible within one year. Otherwise. oAdvances oAdvances to supplier for the acquisition of merchandise are current assets. If collectible in one year. they are shown preferably as a deduction from subscribed share capital. such advances or receivables should be classified as current assets.Example of nontrade receivables o Advances to or receivables from shareholders. directors. to affiliates are usually treated as long-term investments. officers or employees. Otherwise. they are classified as noncurrent assets. 1-8 oSubscriptions .

Example of nontrade receivables o Creditors¶ accounts may have debit balances as a result of overpayment or returns and allowances. oSpecial oIf 1-9 . the debit balances are not material. deposits on contract bids normally are classified as other noncurrent assets because they are likely to remain outstanding for a considerable long period of time the deposits that are collectible currently should be classified as current assets oHowever. These are classified as current assets. an offset may be made against the creditors¶ accounts with credit balances and only the net accounts payable may be presented.

oClaims 1-10 . claims from insurance companies. are normally classified as current assets. receivable such as claims against common carriers for losses or damages. accrued rent income. accrued royalties income and accrued interest on bond investment are usual current items.Example of nontrade receivables o Accrued income receivables such as dividend receivable. claim for rebates and tax refunds.

Balance Sheet Valuation o Receivables are presented on the balance sheet at their net realizable value. 1-11 .

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