3-4 Receivables

  • Receivable- asset from credit transacfions. the financial assets that represent a contractual right to receive cash or other financial assets from another entity

SYNCH SESSION NOTES:

  • ar

    • notes receivable - promissory note

    • loans receivable - is a bank

  • measurement

    • initial - first time u receive AR

      • whatever is the selling price, sales revenue, its the initial

    • subsequent

      • NRV

      • NRV = AR - Allowance

        • marginal safety ang allowance - not confirmed but u r taking into account the chance

  • Allowances

    • Estimation: Aging of FR

      • Age: (decided by company’s policy)

        • current

        • 31-60

        • 61-90

      • Aging - inaalam percent of uncollectability

    • Percent of AR

  • allowance for bad debts - normal acct is credit

    • Hi sir, I have a question po. In the book we had the following questions:

    • AR = P500,000

    • Allowance = P30,000

      1. The allowance for doubtful accounts is estimated at 10% of the AR

      2. The allowance for doubtful accounts is estimated to 10% of the AR

  • allowance is always at final value

  • fair value has 3 levels

    • level 1 - FMV kung ano market price in active market of identical instrument

    • level 2 - FMV in active market of similar instrument

    • level 3 - based on quantitative models ( NO MARKET VALUE ) - sailing computation

      • DCF - discounted cash flow model which is present value

  • cash flow characteristic

    • lmp-sum

    • installment

  • race to negative 2 - cash cocollect 2 years after

  • INITIAL:

    • PV of 1 - 10% (1.1 sa calcu, 3 years)

      • 1 period (divide then equals) = 0.909

      • 2 periods =

      • ^ito yung imumultiply mo sa amounts after periods

    • PV of ordinary annuity

      • same as above pero nag m+ then nagmrc

    • PV of ordinary annuity and annuity due

  • SUBSEQUENT:

    • goal ng amortization mabalik sa face value kaya dapat equal

  • nominal interest- promissory note

  • effective interest- market rate

  • nominal x face = interest collection

  • premium or discount

  • cinocompute ang factor

  • its a good thing to ask about how they are applicable irl

  • QUIZ 1 UNTIL RECEIVABLES

2nd synch

  • sir will assign this weekend

  • di naman dl sa quiz day yung reflection

  • pv principal is same as last value of carrying amount

  • interest - normal interest * face value

  • PWEDE MAG EXCEL SA QUIZ TF

  1. alamin principal, rates, etc

  2. alamin cash flow characteristics timing - one time ba or installment?

    di kasali yung highlishgted

    inde annuity kasi inde equal amount

    helps u decide if anong klaseng PV, or if annuity lang ba

  • Receivable financing (receivable only)

    • pledge and assignment

    • pledge

      • receivables pledged arent identified

    • assignment

      • receivables pledged r identified

      • notification vs nonnotification

    • Factoring

      • selling of AR

      • buyer of AR

      • factor’s holdback - protection of factor for future sales return

  • discounting of receivable - nr only

    • discount proceeds-CA = discount gain

  • trade receivables - ordinary course of business

    • current asset lahat

  • ntr - not from ordinary course of business

    • current asset if collectible within 12 mon

    • noncurrent if collectible more than 12

  • Analysis

    • ar turnover = net credit sales/ average AR