I have confusion in accounting for securitized receivables while calculating cash collected from customers. This example has 137 million in reveue, 5 million increase in account receivables and at the year end 2 million receivables had been securitized. I subtracted 5M from 137M and added 2 M for AR because when one company securitizes AR, it’s going to collect cash. I may have gone wrong by not deducting AR while accounting for cash for the same 2M AR. Even if I do this the calculation would be 137-(5-2)+2, but CFAI has not even considered the last 2 million which has been received from securitiing assets. Is this cash which is the result of securitizing not considered as cash collected from customer?
Nope, it’s cash from securitizing the assets. It’s not collected from the customers. You need to subtract the amount that has been securitized because it was counted in revenue, but it’s not a ‘cash collection from customers’.