When a firm (assignor) assigns part of its accounts receivable as collateral for a loan:

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When a firm assigns part of its accounts receivable as collateral for a loan, the assigned accounts are often reclassified as a separate account within total accounts receivable to indicate that they are pledged as collateral. This helps in maintaining clarity in financial reporting. The assignor does not relinquish control over the receivables, the transaction is not the same as factoring, and the loan is not offset against the assigned accounts receivable in the balance sheet.

When a Firm (Assignor) Assigns Part of Its Accounts Receivable