DISCLOSURE OF TRADE AND OTHER RECEIVABLES (Current assets)
1. Background
- NB!!! When preparing Financial Statements for a financial year:
 All income and expenses are disclosed in the “Statement of Profit or Loss and other
Comprehensive Income”; and
 All assets, liabilities and equity are disclosed in the “Statement of Financial Position”.
- “Trade and other receivables” consist of:
Trade debtors
Prepaid expenses
Accrued income
Creditors with debit balances
Less: Allowance for credit losses
Less: Allowance for settlement discount
- NB!!! Debtors, Prepaid expenses and Accrued income are all assets (Current assets).
Assets have a debit (DR) balance.
Allowance for credit losses and Allowance for settlement discount is also part of assets
(Current assets), be these have credit (CR) balances and are sometimes refer to as
“Negative” assets. That’s why Allowance for credit losses and Allowance for settlement
discounts is deducted from “Trade and other receivables”.
- NB!!! Definition of a current asset:
 A current asset is cash and other resources that are expected to turn to cash or to be used
up within one year of the balance sheet date.
2. Disclosure
- “Trade and other receivables” are disclosed in the Statement of Financial Position (SOFP)
under NB!!! Current assets AND in the Notes to the Financial Statements.
- VERY IMPORTANT NB!!! Assets are NOT disclosed in the Statement of profit or loss and other
comprehensive income”.
- NB!!! – The HEADINGS of the financial statements must be shown as follows:
1. Example for “Statement of Profit or Loss and other Comprehensive Income”:
XYZ Traders
Statement of Profit or Loss and other Comprehensive Income for the year ended
31 December 2019
2. Example for “Statement of Financial Position”:
XYZ Traders
Statement of Financial Position as at 31 December 2019
3. Example for “Notes to the Financial Statements”:
XYZ Traders
Notes to the financial statements for the year ended 31 December 2019
3. Examples
- Example of disclosure (marked in yellow) in the Statement of Financial Position (SOFP):
XYZ Traders
Statement of Financial Position as at 31 December 2019
Note
ASSETS
Non-current assets
XXX
Current assets
Trade and other receivables
2019
R
XXX
5
XXX
TOTAL ASSETS
XXX
EQUITY AND LIABILITIES
Equity
XXX
XXX
Non-current liabilities
XXX
XXX
Current liabilities
XXX
XXX
TOTAL LIABILITIES
XXX
- Example of disclosure in the Notes to the Financial Statements:
XYZ Traders
Notes to the Financial Statements for the year ended 31 December 2019 (EXTRACT)
2019
R
5. Trade and other receivables
Consists of:
Trade debtors
Prepaid expenses
Creditors with debit balances
Less: allowance for credit losses
Less: allowance for settlement discount
XXX
XXX
XXX
XXX
(XXX)
(XXX)
XXX