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Factoring & Gov Grant

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Factoring & Gov Grant

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 18, 2019 at 4:59 am #513331
    chinny98
    Member
    • Topics: 30
    • Replies: 16
    • ☆

    1. May I knw factoring is considered under debt or equity financing???? or working capital financing

    2. How about government grants? Does this considered as debt financing?

    Thanks

    April 18, 2019 at 6:17 am #513347
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54787
    • ☆☆☆☆☆

    1. Factoring is a way of financing working capital

    2. Although government grants are a source of finance, they are not debt finance because the grant is not owing back to the government.

    April 18, 2019 at 10:15 am #513370
    chinny98
    Member
    • Topics: 30
    • Replies: 16
    • ☆

    so the government grants will be fall in which category of financing??? how about equity financing?

    April 18, 2019 at 2:52 pm #513400
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54787
    • ☆☆☆☆☆

    There is no category. It is a source of finance, but will not appear in the financial statements – it simply serves to reduce the cost of the asset.

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