What you will learn to do: Identify the proper financial statement presentation of receivables
On a company’s balance sheet, receivables can be classified as accounts receivables or trade debtors, bills receivable, and other receivables (loans, settlement amounts due for non-current asset sales, rent receivables, term deposits). Accounts receivable is the money owed to that company by entities outside of the company. Trade receivables are the receivables owed by the company’s customers. Also, receivables are divided according to whether they are expected to be received within the current accounting period or 12 months (current receivables), or received greater than 12 months (non-current receivables).
In addition to classifying receivables correctly on the balance sheet, GAAP requires disclosures related to receivables, such as the amount of the allowance for doubtful accounts, any factoring arrangements, and a host of other details that would not be obvious from just looking at the numbers.