How is the receivable displayed in the balance sheet

The balance of the enterprise is the most important financial document, in which on one or two pages all information is collected about what the enterprise owns (its assets) and about what means (liabilities) these assets are created. One of the most common types of assets of the enterprise is accounts receivable. About how the accounts receivable are displayed in the balance sheet, questions are often asked by both beginning accountants and specialists with experience. In today's article, we will try to answer some of these questions.

The accounts receivable are reflected in the balance sheet in the line "long-term receivables" in the section of non-current assets, as well as in the line "short-term receivables" of the section of current assets. As we see, the main criterion for classification of debt is its term. In such a document as the balance sheet, accounts receivable are divided into long-term and short-term due to the fact that these assets have varying degrees of liquidity, which means that they can not be combined into a single indicator, as this may make it more difficult in the future to analyze the financial state of affairs at the firm. Long-term debt is repayment of more than a year, and short-term - up to a year.

Accounts receivable in the balance sheet are displayed not by one line, but several. To begin with, the so-called net debt value is fixed - the amount that the enterprise really expects to receive. After this, there is a line in which the initial value of the debt is written, that is, the amount that the debtors owe to the documents on the documents. However, often enterprises receive as a repayment of debt less than the amount originally agreed upon. In order to display the difference between the documented amount of debt and the amount that the enterprise really expects to receive, a line "reserve of doubtful debts" was entered into which the amount of losses of the company due to unscrupulous debtors

In addition, accounts receivable in the balance sheet are classified depending on the type of debtor. So, allocate such debtors as budget organizations, internal debtors (for example, accountable persons) and other enterprises.

It is important to say that accounts receivable in the balance sheet reflect not only the amounts of monetary debts of other organizations, but, for example, delayed deliveries of goods, equipment, or belated provision of services for which payment has already been made. So, if the company transferred money for, say, a new machine, but its delivery will take several weeks, you can not immediately write down the cost of the machine for fixed assets - you should first write down its value in the vendor's receivables, and only after delivery, transfer this amount to the value of the main Means.

Recall also that accounts receivable in the balance sheet is displayed as an aggregate indicator, the basis for which is the display of debt in the accounts. It is the correct display of ER on the accounts of accounting according to the plan of accounts will eventually create the correct indicator of the amount of debt, which then goes into balance. Careful maintenance of each account and verification of the correctness of the display of transactions in the balance sheet at the end of the period will help in the future avoid problems with the formation of the balance of the enterprise, if an error is found, it will be much more difficult to find it than when the account is initially displayed.

We hope that this article has helped readers to briefly familiarize themselves with the features of the DZ display in the company's financial documents.