Foxcoon is a technological solution provider business with a year-end 31st March 2021.You have recently been appointed as a financial accountant, and the following issues are outstanding in the financial statements. Foxcoon has been in need of additional finance in the current year, and decided to factor some trade receivables. Trade receivables of £1 million were factored on 31 March 2021 for £800,000. The trade receivables balance of £1 million has been de-recognised, and the difference between this and the proceeds of £800,000 received from the factor has been debited to operating expenses. Foxcoon has to refund any sums relating to trade receivables that are uncollected by the factor after a period of six months. Explain the required IFRS/IAS accounting treatment of the above issues.

Foxcoon is a technological solution provider business with a year-end 31st March 2021.You have recently been appointed as a financial accountant, and the following issues are outstanding in the financial statements. Foxcoon has been in need of additional finance in the current year, and decided to factor some trade receivables. Trade receivables of £1 million were factored on 31 March 2021 for £800,000. The trade receivables balance of £1 million has been de-recognised, and the difference between this and the proceeds of £800,000 received from the factor has been debited to operating expenses. Foxcoon has to refund any sums relating to trade receivables that are uncollected by the factor after a period of six months. Explain the required IFRS/IAS accounting treatment of the above issues.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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