When the risk of non-collection of installment payments is high or when there is no reasonable basis for estimating the proportion of installment accounts receivable likely to prove uncollectible,both IFRS and U.S.GAAP permit the use of the installment sales method.

Question

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Under both IFRS and U.S. GAAP, when the risk of non-collection is high or there is no reasonable basis for estimating the collectibility of installment accounts receivable, the use of the installment sales method is generally not permitted. Instead, revenue recognition is delayed until the payment is received or the collectibility becomes reasonably assured.

When the Risk of Non-Collection of Installment Payments Is High