Invoice Finance / discounting
honada
Registered Posts: 28 Regular contributor ⭐
Hello
I have been working with discounting invoices for a couple of years and have managed to set up all the necessary accounts, work my double entry and bank reconciliation.
I have been approached my the management team with a query which I would appreciate your help and knowledge, the balance sheet has got the Trade Debtor as a Current Asset and the invoice discounting as a loan on the liability, however the query is since we have sold the debt to the bank do we still show the trade debtors as an asset on the balance sheet.
There is some logic behind the query but I am not sure the accounting procedure with regard to the balance sheet.
Any help would be greatly appreciated.
Thank you
Honada
I have been working with discounting invoices for a couple of years and have managed to set up all the necessary accounts, work my double entry and bank reconciliation.
I have been approached my the management team with a query which I would appreciate your help and knowledge, the balance sheet has got the Trade Debtor as a Current Asset and the invoice discounting as a loan on the liability, however the query is since we have sold the debt to the bank do we still show the trade debtors as an asset on the balance sheet.
There is some logic behind the query but I am not sure the accounting procedure with regard to the balance sheet.
Any help would be greatly appreciated.
Thank you
Honada
0
Comments
-
Also depends on whether the factoring arrangement gives the factor recourse to your company if debts are unrecovered ie. have you passed on the risks and rewards1
-
Thank you I am reading the agreement for the purchase of debt in details to identify if the arrangement is with recourse or not, I guess it all depends on the responsibility of the risks and rewards being with the company or shifted to the factoring company.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership