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F7 : Question : How should "trade receivables sold without recourse" be recognised in Financial statements

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F7 : Question : How should "trade receivables sold without recourse" be recognised in Financial statements

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July 27th 2015 AN ACCA USER 130 Points

2 Replies

0 Votes

Without recourse in case of payment default by the debtor. We have no material continuing involvement in the receivables sold without recourse which are derecognized in their entirety.

Refer to this link.

July 27th 2015 AN ACCA USER 14,370 Points
0 Votes

First Understand recourse= no return meaning that if receivables are sold out to someone else say Firm, then the receivables will not be returned back to the seller if for any reason the debtor defaults therefore this will be recognized as a revenue or sale if you wish

Double entry is Dr Cash Cr = Receivables/revenue....

August 1st 2015 AN ACCA USER 2,010 Points
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