- This topic has 1 reply, 2 voices, and was last updated 1 year ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
Relevant when assessing the bad debt allowance for RECEIVABLES.
Tom buys a chair from a shop for 1,000 on 30 days credit – financing component NOT SIGNIFICANT
Mary buys an identical chair from a shop for 1,500 on 4 years ‘interest free’ credit. Interest free is of course a marketing ploy! SIGNIFICANT FINANCING COMPONENT
So where is the dividing line? A judgement call, but more than one year’s credit is what I would go for.
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.