Accounting for Receivables Factoring: A Practical Overview

Course Overview

Factoring involves selling customer receivables to a financial intermediary, which then collects payment directly from the customers. This strategy is commonly used to accelerate cash flow. This course offers a high-level overview of the accounting and reporting considerations for accounts receivable factoring, focusing on the criteria for determining whether the transfer qualifies as a "true sale" or should be accounted for as a secured borrowing.  

Learning Objectives

Upon completion of this course, you will be able to:

• Identify the U.S. GAAP area applicable to factoring arrangements

• List the specific conditions that must be met for a factoring arrangement to qualify as a sale

• Recognize key evaluation considerations relating to true sale opinions 

• Recognize the accounting impacts from a factoring transaction