- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 10. Financial Reporting Quality
- Subject 4. Detection of Financial Reporting Quality Issues
CFA Practice Question
According to GAAP, the gains recognized from securitizing accounts receivable should be reported ______.
II. as an offset to selling, general or administrative expenses
III. in other non-operating income
I. within revenues
II. as an offset to selling, general or administrative expenses
III. in other non-operating income
Correct Answer: All of these options are possible.
GAAP are silent on where the gains should be reported in the income statement.
User Contributed Comments 1
| User | Comment |
|---|---|
| HenryQ | Sale of A/R is operating CF, but gains from the pv of interest on A/R is not recognized by GAAP. Reporting in revenue is most aggressive. |