Asked by Reanna Stoops on Jul 21, 2024
Verified
For sale of receivables with recourse,what is,if any,the required disclosure? Explain the importance of this point.
Sale of Receivables with Recourse
A financial transaction where a company sells its receivables to another party but remains liable if the party owing the receivables fails to pay.
Required Disclosure
Information that entities are legally mandated to provide to stakeholders, regulators, or the public within financial statements or reports.
- Analyze the financial impact of selling receivables with and without recourse.
Verified Answer
CJ
Charlie JacksonJul 28, 2024
Final Answer :
Disclosure of the contingent liability to the acquirer for noncollection of the customer is required in the notes to the financial statements.The contingent liability may provide useful information for users of financial statements when assessing value and risk.
Learning Objectives
- Analyze the financial impact of selling receivables with and without recourse.