Understanding Financing Receivables under GAAP

Financing receivables are an important aspect of financial reporting for many businesses. Virtually every reporting entity holds receivables, though their nature varies depending on the characteristics of the business.

Classification of Receivables

Under US GAAP, the classification of debt instruments is driven by legal form. On the other hand, classification under IFRS is not driven by legal form. This distinction is important for businesses operating in different jurisdictions.

Receivables Before the Adoption of ASU 2016-13

ASU 2016-13 introduced significant changes to the accounting for receivables. This update affects the recognition, measurement, presentation, and disclosure of receivables. Businesses need to understand the impact of these changes and ensure compliance.

Investments in Loans and Receivables

Investments in loans and receivables are a common practice for many businesses. It is important to understand the accounting treatment for these investments, especially under GAAP. Proper classification, recognition, and measurement are crucial for accurate financial reporting.

Guide to Accounting for Investments, Loans, and Other Receivables

The December 2023 edition of the guide provides comprehensive discussion and practical examples based on real-life situations. It incorporates recent FASB guidance and covers various accounting topics related to investments, loans, and other receivables. This resource is a valuable tool for engagement teams and finance professionals.

Benefits of Financial Reporting Insights

Financial Reporting Insights is a biweekly resource that keeps professionals informed about recent financial reporting developments. It covers matters related to AICPA, SEC, PCAOB, and other finance and accounting compliance considerations. Staying informed is essential for maintaining compliance and staying ahead in the ever-changing financial landscape.

Conclusion

Understanding the accounting treatment for financing receivables under GAAP is crucial for businesses. Compliance with the latest guidance and standards is essential for accurate financial reporting. Resources like the guide to accounting for investments, loans, and other receivables and Financial Reporting Insights provide valuable information for professionals in the field.