Accounts receivable
Accounts receivable are amounts customers owe a business for goods or services delivered on credit but not yet paid. Revenue is recognised at the point of delivery; the outstanding balance sits as a current asset on the balance sheet.
Also known asreceivables · trade debtors
See it move
A timeline labelled 'days outstanding' starts on 10 March when goods are shipped, recording €5,000 of revenue and an equal accounts receivable current asset. The balance sits on the books for 30 days while the customer owes the amount, then converts to cash on 9 April when payment is received and the receivable is cleared.
Check yourself
On 1 March a business delivers goods worth €6,000 to a customer on 45-day credit terms. The customer pays on 15 April. Under accrual accounting, when is the revenue recorded, and how is the €6,000 classified on the balance sheet between 1 March and 15 April?
If you trained under a national GAAP
OtherWhere national-GAAP intuition diverges from the international standard
National GAAP
Many national GAAPs require a specific trigger before a provision against trade receivables is recognised — typically objective evidence that a particular debtor is likely to default, such as significant payment arrears or known financial difficulty. Portfolio-level estimates may be permitted but are generally anchored to losses already indicated by past experience rather than anticipated future conditions.
IFRS
Under IFRS 9, ordinary trade receivables use the simplified impairment approach: a lifetime expected-credit-loss allowance is recognised from initial recognition, with no twelve-month stage and no staging mechanism. The general three-stage model applies only to receivables that carry a significant financing component.