Pledged receivables are reported as current assets while assigned receivables are reported as non-current assets.

Question

Quizplus · Accepted Answer

Pledged receivables and assigned receivables are both reported as current assets. The distinction between them is the degree of control over the receivables. Pledged receivables are those that have been pledged as collateral for a loan, but the company retains control over the collection of those receivables. Assigned receivables have been assigned or sold to another party, and the company no longer has control over the collection of those receivables. Both types of receivables are reported as current assets unless the collection of the receivables is expected to occur more than one year from the balance sheet date, in which case they would be classified as non-current assets.

Pledged Receivables Are Reported as Current Assets While Assigned Receivables