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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › aged receivables
what does ‘a review of aged receivable balances/analysis’ mean?
An aged receivables report breaks down each receivable according to its age. So a balance of $20,000 might consist of $10,000 of invoices less than 30 days old, $8,000 30 – 60 days old, $1,500 60 – 90 days and $500 over 90 days.
The older the receivable the more concern there is about its recoverability. For example, why, in the above example is there still an amount outstanding for over three months? Perhaps it is in dispute and will never be paid.
Therefore this aged report is very useful to auditors when valuing receivables.
thank you!