Accounts & Notes Receivable

Category

Balance Sheet

Units

Currency

US-GAAP elements

AccountsReceivableNetCurrentAccountsNotesAndLoansReceivableNetCurrent

Reference

Regulation S-X Rule 5-02.3 (Accounts and notes receivable); Rule 5-02.4 (Allowances)

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Accounts and notes receivable is the amount a company expects to collect within the next year (or its operating cycle, if longer) for goods it has delivered and services it has performed in the ordinary course of business. It is reported net of the allowance for credit losses, so the balance reflects what the company actually expects to collect rather than the gross amount billed.

Accounts receivable are the ordinary open invoices a company extends to customers on credit. Notes receivable are the same kind of claim documented in a formal written promise to pay, often with a stated interest rate and maturity date. Balances due after more than a year are classified as noncurrent and are not part of this figure.

SEC Regulation S-X Rule 5-02.3 requires commercial and industrial companies to break receivables out by counterparty: amounts owed by trade customers, by related parties, by underwriters, promoters, and employees (when they arose outside the ordinary course of business), and by others. If notes make up more than 10 percent of total receivables, the company must show accounts receivable and notes receivable separately, either on the balance sheet or in a footnote.

Rule 5-02.4 requires the related allowance to be stated separately as well. Under the current expected credit loss (CECL) model in ASC 326, that allowance reflects losses the company expects over the life of the receivable, not only losses that have already occurred. A rising allowance relative to the receivable balance is often an early sign that customer credit quality is weakening.

In XBRL filings, most companies tag the figure as AccountsReceivableNetCurrent. Companies that combine trade receivables with notes and loans in one line use AccountsNotesAndLoansReceivableNetCurrent. Amounts a company has earned but does not yet have an unconditional right to bill are generally reported separately as contract assets under ASC 606, rather than as receivables.