Question : 173. Companies can have accounts receivable from ordinary trade customers and : 1412703

173.

Companies can have accounts receivable from ordinary trade customers and from related parties (e.g., directors, employees or large shareholders). How does U.S. GAAP differ from IFRS in its requirements regarding separate disclosure of trade receivables and related-party receivables? Why might separate disclosure of related party receivables be useful? 
 
 

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174.

The following note disclosure appeared in a recent annual report of Halliburton:

Our receivables are generally not collateralized. Included in notes and accounts receivable are notes with varying interest rates totaling $12 million at December 31. At December 31, 39% of our consolidated receivables related to our United States government contracts, primarily for projects in the Middle East.

Explain the reason that Halliburton indicates that its receivables include notes with varying interest rates totaling $12 million at December 31. What significance does this have to the reader? 
 
 

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175.

The following note disclosure appeared in a recent annual report of Halliburton:

Our receivables are generally not collateralized. Included in notes and accounts receivable are notes with varying interest rates totaling $12 million at December 31. At December 31, 39% of our consolidated receivables related to our United States government contracts, primarily for projects in the Middle East.

Explain the reason that Halliburton indicates that its receivables are generally not collateralized. What significance does this have to the reader? 
 
 

176.

Explain the transactions that typically would affect the discount on notes receivable account. 
 
 

The discount on notes receivable would be initially credited for the "discount" when a noninterest-bearing note is issued. The "discount" really represents the total interest on the note over its term. The "discount" should be recognized as interest earned over the term of the loan in a series of adjusting entries:

 

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