Which of the following statements about the accounting for transfers of receivables under IFRS are true? Note: Select all that apply. Check All That Apply The focus is simply on whether control of assets has shifted from transferor to transferee. The focus is simply on whether control of assets has shifted from transferor to transferee. Transfers of receivables sometimes are treated as a sale of receivables. Transfers of receivables sometimes are treated as a sale of receivables. Transfers of receivables sometimes are treated as a secured borrowing. Transfers of receivables sometimes are treated as a secured borrowing.
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According to standard, determining whether receivables that are transferred can be derecognized and accounted for as a sale is based on... • a. whether the seller has transferred substantially all the risks and rewards of ownership of the receivables. • b. whether the seller has transferred the receivables to factoring company or bank. • c. whether the seller has received cash from factoring company or bank. • d. whether the seller has received cash from customer.
Akash M.
Which of the following is true when accounts receivable are factored without recourse? O a. The risks and rewards of these receivables still remain with the seller. O b. The factor assumes the risk of collectibility and absorbs any credit losses in collecting the receivables. O c. The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the transaction. • d. The receivables are used as collateral for a promissory note issued to the factor by the owner of the receivables.
IFRS 15 distinguishes between contract assets and IFRS 9 Financial Instruments receivables. Which one of the following statements is correct? A contract asset and an IFRS 9 Financial Instruments receivable are both subject to the risk of non-performance, but an IFRS 9 Financial Instruments receivable is also subject to the credit risk. It is important to distinguish between a contract asset and a receivable because it provides financial statement users with relevant information about the risks associated with the entity's rights. A contract asset arises if nothing other than the passage of time is required before payment of the customer's consideration is due. Contract assets must be presented separately from receivables. A contract asset and a receivable are both subject to the risk that the customer will cause a loss for the entity by failing to pay, but a receivable is also subject to the risk of non-performance.
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