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Basic Question 5 of 9
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 indicators of cash flow quality;
evaluate the cash flow quality of a company;
CFA® 2025 Level II Curriculum, Volume 2, Module 14.