Factoring is a type of transaction where an entity sells it customer receivables to a financial intermediary who then in turn collects payment from the entity’s customers. Many entities employ this strategy to accelerate cash collection. This course provides an overview of the accounting and reporting requirements with respect to accounts receivable factoring programs as well as the conditions that must be met in order to recognize the transfer of these financial assets as a “true sale” instead of a secured borrowing.

Learning Objectives
  • Recognize key characteristics as well as advantages/disadvantages of factoring arrangements.
  • Identify the U.S. GAAP area applicable to factoring arrangements.
  • Explore and list the three specific conditions that must be met for a factoring arrangement to qualify as a sale.
  • Recognize key evaluation considerations relating to true sale opinions.
  • Identify examples of continuing involvement.
  • Recognize the impact from a failed sale in a factoring arrangement.
Last updated/reviewed: March 8, 2024
2 Reviews (11 ratings)

Reviews

5
Anonymous Author
Nice overview of a very complex area. In practice it seems factoring agreements maybe incorrectly recognized.

5
Member's Profile
Kelen’s course on Receivables Factoring was well prepared. Would be better with audio/visual media

Prerequisites
Course Complexity: Foundational
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
COURSE MATERIAL
  Slides: Optimize Cash Flow Through Receivables FactoringPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam