Trade and other receivables note in the Annual Report

In this note what you’d want to do is have balances grouped based on their content – accounts receivable, prepayments etc. Keep an eye out for “trade” and “other” receivables. If the balance is not directly business related as in it’s not a result of your main business activity, it’s likely to be part of “other” receivables rather than “trade”. The latter is meant purely for as the name says trade related balances that arise directly from making trade with clients.

As with all assets there’s the question of their value. If a situation during the period indicated an allowance is needed for receivables it’s to be disclosed as a part of the note. Provided it was decided to fully write down the balance it’s also to be disclosed very briefly at least without any names obviously. If you feel like disclosing the names and the reason, you can obviously do it of course. For an example if it’s a known bankruptcy already there’s really no harm done.

Something you may find worthy for disclosure is any special rule you use for writing down receivables or assessing the need for allowance. For an example you may recognize an allowance for receivables that are older than 180 days (exceeding their payment date with 180 days). With just one sentence you can easily give this information to readers so they’d know that for an example if no allowance is recognized, none of your outstanding receivables are older than 180 days. As I said, it’s just an example to give an idea of what we mean here.

In case your receivable balances also include loan balances make sure you also disclose the interest rates and their payment dates in this note or in case you’ve got multiple loans and you’ve decided to have another note to give more detailed information about those loan receivables just refer to the other note and include the interest rates and payment dates there. It doesn’t really matter as long as the information is disclosed in the notes somewhere.