Trade Receivables

Front

Trade Receivables

Back

Debts owed by customers who buy goods or enjoy services from the business.

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Allowance for impairment of trade receivables

Back

Debts owed by credit customers that is estimated likely uncollectible

Front

Impairment loss on trade receivables

Back

Difference between the allowance for impairment of trade receivables at the beginning and end of the year

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Net trade receivables

Back

Trade receivables less allowance for impairment of trade receivables

Front

Prudence theory

Back

AFIOTR is reported in the statement of financial position as a deduction from the TR book value so that assets are not overstated

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Matching theory

Back

As the increase in allowance for impairment of trade receivables is a likely expense, it should be recorded in the same accounting year as the sales revenue earned to obtain a true and fair profit for the year.