Sale of accounts receivable the company sells undivided

Reference no: EM13578968

Sale of Accounts Receivable: The company sells undivided interests in designated pools of qualified accounts receivable to a securitization vehicle. The Company utilizessecuritization as a "financing technique" (to reduce more expensive bank debt). The company services administers and collects the receivables on behalf of the purchaser. The agreement also requires that procceds from securitization be used to pay down Company debt. During the current year 10 million of recivables generated from sales of the company's inventory were sold under the agreement, and therefore are not reflected in the accounts receivable balance in the company's balance sheet.

What is the cash flow statement treatment, classification, and timing, if applicable for this transaction?

Reference no: EM13578968

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