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6 views6 pagesUnderstanding Accounts Receivable Basics
This document presents information about the theory of accounts receivable. It explains that accounts receivable are financial instruments when they are based on a contract. It includes a list of financial assets that are financial instruments and describes how accounts receivable from customers are measured according to IFRS. It also covers concepts such as the amortized cost model, internal control measures for accounts receivable, and the concepts that must be disclosed in the financial statements related to debt.
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0% found this document useful (0 votes)
6 views6 pagesUnderstanding Accounts Receivable Basics
This document presents information about the theory of accounts receivable. It explains that accounts receivable are financial instruments when they are based on a contract. It includes a list of financial assets that are financial instruments and describes how accounts receivable from customers are measured according to IFRS. It also covers concepts such as the amortized cost model, internal control measures for accounts receivable, and the concepts that must be disclosed in the financial statements related to debt.
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RECEIVABLES THEORY
Dairys Ruiz Castañeda
MARIANA DE JESÚS ESCOBAR BORJA
UNIVERSITY OF MAGDALENA
FACULTY OF BUSINESS AND ECONOMIC SCIENCES
ACCOUNTING OF INVESTMENT RESOURCES
PUBLIC ACCOUNTING
SANTA MARTA
2022
ACCOUNTING FOR INVESTMENT RESOURCES
GUIDE FOR ASYNCHRONOUS WORK
WEEK 11
Accounts Receivable
ACCOUNTS RECEIVABLE
• Develop the following activity individually
Development date: May 4 and 5, 2022
• UPLOAD BY FRIDAY, MAY 6 AT 2 PM
Upload to the platform in assignment week 11
Is it correct to say that accounts receivable are financial instruments?
What are the exceptions to this statement?
It is considered that accounts receivable and other receivables are
Financial Instruments Receivable (FIR) when they are based on a contract,
which establishes the obligations of the counterparties. Accounts receivable and the
other receivables that are not based on a contract are not considered
an IFC, such as claims estimates or balances in favor for the concept
of taxes.
2). Make a list of financial assets that are financial instruments.
Money (bills and coins).
Bank deposits.
Company shares.
Corporate debt bonds.
Assets issued by companies (also known as promissory notes of
company).
Bonds and treasury obligations issued by the State or public debt of
long term.
3). Why is the accounts receivable an financial instrument?
The accounts receivable from customers is a financial instrument because it is a
contract that is made with the client who has an obligation with the
company that corresponds to a financial asset, at the time of payment
receives another financial instrument which is cash.
4). How are accounts receivable from customers measured or evaluated according to the
IFRS?
Accounts receivable from customers are measured or evaluated at fair value.
its objective is to obtain cash, in financial entities it is necessary to measure or
evaluate the amortized cost considering that they are recovered over time
considerable.
5). What does the amortized cost model consist of?
The amortized cost is the model required by the International Standards of
Financial Information for measuring financial instruments.
basically consists of taking the initial value of the instrument, increasing it by the
interests and reduce payments.
6). What internal control measures would you adopt for accounts receivable?
clients?
INTERNAL CONTROL ACCOUNTS RECEIVABLE FROM CUSTOMERS
1. Determine an appropriate procedure for credit approval.
There must be a person responsible for approving the documents.
paying and collecting them.
3. Research and record the different customer accounts, including the
uncollectible accounts
4. Apply the policies to accounts that are hard to collect.
5. Determine the customers' balances at least once a month.
What is factoring? What are the advantages of using it?
Prepare an example of factoring and make the entries.
Factoring consists of the advance collection of invoices by
from a financial entity to the requesting company.
Through this tool, the company receives the payment amount of
your invoices in advance and the financial institution, too
llamadafactor acquires the right to collect from its clients. It is, for
so much, a short-term financing mechanism that involves a
immediate liquidity injection.
ADVANTAGES
Factoring offers a series of advantages over other types of financing.
for SMEs and large corporations. The obvious benefit is that they can
improve its cash flow, although it is not the only one.
Immediate liquidity injection as an alternative form of financing.
Guarantee of collection of the accounts receivable.
Optimization of collection management and time savings. Accounting
it is simplified and the company has only one customer with payment to
told.
Reports of insolvency and credit classification of clients.
EXAMPLE
8). What are the other accounts receivable that make up the group of
commercial debtors and other accounts receivable?
The other accounts receivable that make up the group of accounts receivable.
Accounts receivable: only for the resale of merchandise or
loan for invoice acquisition count.
• Accounts Receivable
• Documents payable
• Advance payments to suppliers
Other accounts receivable: for other activities except for sales of
merchandise.
• Receivables from rentals
• Count the staff
• Interest receivable
• Similar
9). What concepts should be considered in presentation and disclosure
from the financial statements for trade receivables and other accounts for
charge?
The concepts to be taken into account are as follows:
Presentation standards: considering their availability, accounts receivable
receivables can be classified as immediate short-term demand and
long term.
Depending on its origin, it can form two groups of accounts receivable:
clients' charges: the documents and accounts payable must be presented
client of the entity, derived from sales of merchandise or services
services that present the normal activity of it.
in charge of other debtors: they originate from different transactions.
for which the entity was established as: loans to shareholders,
employees, staff, complaints, sale of fixed assets, taxes
you pay excessively, etc.; they should be grouped by concept and according to their
importance, if the amounts are not significant, they can be shown as
other accounts receivable.