In a transaction where the transferor surrenders control over its receivables,the transaction is treated as a collateralized borrowing and any gain or loss is recognized in earnings.

Question

Quizplus · Accepted Answer

In a transaction where the transferor surrenders control over its receivables, the transaction is treated as a sale, not a collateralized borrowing. Therefore, any gain or loss from the transaction is recognized in earnings at the time of the sale, reflecting the change in ownership rather than a borrowing arrangement.

In a Transaction Where the Transferor Surrenders Control Over Its