西方中级会计学6.pptVIP

The U.S. GAAP and the IFRS approaches often lead to similar accounting treatment for transfers of receivables. Both seek to determine whether an arrangement should be treated as a secured borrowing or a sale, and, having concluded which approach is appropriate, both account for the approaches in a similar fashion. However, where they differ is in the conceptual basis for the choice of accounting treatment and in the decision process required to determine which approach to use. Now we’ll discuss two ratios that are commonly used by managers, financial analysts and investors to evaluate receivables management. The receivables turnover ratio provides useful information for evaluating how efficient management has been in granting credit to produce revenue. This ratio measures how many times a company converts its receivables into cash each year. A higher receivables turnover ratio is usually consider better than a lower receivables turnover ratio. It is calculated by dividing net sales by average accounts receivable. Average accounts receivable is determined by adding together the beginning and ending accounts receivable balances and dividing this total by two. The average collection period is computed by dividing the number of days in a year by the receivables turnover ratio. This ratio is an approximation of the number of days the average accounts receivable balance is outstanding. A lower average collection period is usually considered to be better than a higher average collection period. Here we see the reported accounts receivable balances for years 2009 and 2008 for both Symantec, Corp. and CA, Inc. These numbers will enable us to compute the average accounts receivables balance for both companies for 2009. In addition, net sales for both companies is given. The receivables turnover ratio is calculated by dividing net sales by average accounts receivable. When we divide Symantect, Corp.’s net sales by its average receivables balance, we get a receiva