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Basic Question 11 of 22
Which statement(s) is (are) true?
II. Cash provided from outright sales of accounts receivable to a factor is reported as financing cash flow.
III. Cash provided from outright sales of accounts receivable through a securitization agreement is reported as financing cash flow.
I. Cash provided from outright sales of accounts receivable, whether to a factor or through a securitization agreement, is reported as operating cash flow.
II. Cash provided from outright sales of accounts receivable to a factor is reported as financing cash flow.
III. Cash provided from outright sales of accounts receivable through a securitization agreement is reported as financing cash flow.
User Contributed Comments 2
| User | Comment |
|---|---|
| ehc0791 | I is correct. For reporting purpose, factoring and securitizing are CFO, but for analytical purpose, factoring with recourse should be reclassified as CFF. |
| Lavay | GAAP sees any A/R sale thru securitization or otherwise an outright sales, and proceeds should be under CFO. |
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Learning Outcome Statements
describe presentation choices, including non-GAAP measures, that could be used to influence an analyst's opinion
describe accounting methods (choices and estimates) that could be used to manage earnings, cash flow, and balance sheet items
describe accounting warning signs and methods for detecting manipulation of information in financial reports
CFA® 2024 Level I Curriculum, Volume 3, Module 10.