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It outlines two primary scenarios: factoring without recourse and factoring with recourse. In factoring without recourse, the seller transfers receivables to a factoring company for immediate cash. If the transfer encompasses all risks and rewards of ownership, the seller derecognizes the receivables and recognizes any resulting gain or loss in profit or loss. This signifies a true sale. Conversely, in factoring with recourse, the transferor retains the obligation to repurchase uncollected invoices. As the risks of non-collection are not fully transferred to the factor, the transferor does not derecognize the receivable. Instead, a financial liability is recognized for the consideration received. The document clarifies that the key determinant for derecognition is the transfer of risks and rewards of ownership. If these risks remain with the original entity, the asset is not derecognized, and a financial liability is recorded. This principle is crucial for accurate financial reporting, ensuring that assets and liabilities are reflected appropriately based on the substance of the transaction rather than just its legal form. The explanation emphasizes the critical distinction between a sale of receivables and a financing arrangement, impacting the balance sheet and profit or loss recognition. Precision in applying these IFRS 9 principles is vital for entities engaging in factoring activities to maintain compliance and provide transparent financial statements. The document serves as a concise guide for accounting professionals and businesses involved in receivable financing.",{"@graph":69,"@context":105},[70,84],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/derecognition-of-financial-assets-factoring/25965/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/derecognition-of-financial-assets-factoring/25965.png","ImageObject",300,407,{"name":92,"@type":93},"Maeve","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-09-20","2026-05-07",true,{"@type":102,"interactionType":103,"userInteractionCount":81},"InteractionCounter",{"@type":104},"ViewAction","https://schema.org",{"og:url":107,"og:type":108,"og:title":65,"og:site_name":95,"og:description":67},"https://docshare.wps.com/document/derecognition-of-financial-assets-factoring/25965","article",{"robots":110,"canonical":107},"index,follow",{"doc_id":112,"site_id":62},25965,1778195433,{"code":4,"msg":5,"data":115},{"doc_id":112,"user_id":116,"nickname":92,"user_avatar":117,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":66,"file_id":118,"file_url":119,"file_type":120,"file_size":121,"view_count":81,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":8,"language":122,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":66,"faqs":66,"seo_title":123,"seo_description":67,"update_tm":113,"read_time":81},5909877438554,"https://ap-avatar.wpscdn.com/avatar/5600025385ad2bf12a7?_k=1778553567797529272","cbCain5FRnYXmTrt","https://ap.wps.com/l/cbCain5FRnYXmTrt","pdf",365821,"English","Derecognition of Financial Assets Factoring | PDF"]