When should a transfer of receivables be recorded as a sale?

Question

Quizplus · Accepted Answer

All of these factors must be met for a transfer of receivables to be recorded as a sale. The transferred assets must be isolated from the transferor, meaning the transferor no longer has effective control over them. There cannot be an agreement for the transferor to repurchase or redeem the assets prior to their maturity. And finally, the transferee must have the right to pledge or exchange the assets. Only when all of these criteria are met can the transfer be recorded as a sale.

When Should a Transfer of Receivables Be Recorded as a Sale