Something like Cash Collections = Sales - Increase in A/R + Increase in Unearned Revenue?作者: lucasg85 时间: 2011-7-11 18:49
Yes, or - decrease in unearned revenue.作者: maryli 时间: 2011-7-11 18:49
When you write off receivables do you have to make any changes to the above equation?作者: MiniMe7 时间: 2011-7-11 18:49
Bump, could someone explain this last part to me please? Impact of writing off receivables on the cash collections equation, or is there no impact at all.
Thank you作者: jacksparrow 时间: 2011-7-11 18:49
it is in cfai book earnings quality
my understanding:
net ar (net of allowance) you remove allowance (the change of allowance is important if increased you need to increase change of ar) to get gross
then you need to put back write-off which I believe is flow value, amount written off in a year you add to ar
so change in net ar + change in allowance + write-off of the year = non cash result of revenues
revenues - this non cash + increase in defered revenue = cash collection
not 100% sure, pls correct作者: mp3bu 时间: 2011-7-11 18:49
Think about this one people. An allowance for doubtful accounts, one that the business did not have a good grasp on measuring effectively, is therefore a bad debt and no longer a receivable.作者: yodacaia 时间: 2011-7-11 18:49
so what was the adjustment for write-offs? i think i got something close to 3.作者: wilslm 时间: 2011-7-11 18:49
