(Inc) Dec in Accts Receiv
IncreaseDecreaseInAccountsReceivableIncreaseDecreaseInReceivablesChange in accounts receivable is the adjustment in the operating section of the cash flow statement that reflects how much the amount customers owe the company grew or shrank during the period. An increase in receivables is subtracted from net income, because the company booked revenue it has not yet collected in cash. A decrease is added back, because the company collected more cash than it billed.
The label "(Inc) Dec" signals this sign convention: a rise in receivables appears as a negative number and a fall appears as a positive one.
The line exists because most companies prepare the operating section with the indirect method under ASC 230, starting from net income and adjusting for items where revenue or expense was recorded without a matching cash movement. Credit sales are the classic case. In XBRL, companies usually tag the line IncreaseDecreaseInAccountsReceivable, which covers amounts due from customers for goods and services sold on credit. Some use the broader IncreaseDecreaseInReceivables, which also picks up other operating receivables. Note that the XBRL value is positive when receivables rise, and the statement subtracts it, so the sign you see in raw XBRL data is often the opposite of the sign on the printed statement.
The figure is not always equal to the difference between two balance sheets. Receivables brought in through an acquisition, foreign-currency translation, and write-offs against the allowance for credit losses all move the balance sheet without flowing through this line. Receivables sold to a factor or a securitization vehicle can also shrink the balance and pull cash forward, which flatters operating cash flow for that period.
Analysts watch this line alongside revenue. Receivables that climb much faster than sales, which also shows up as rising days sales outstanding, can signal looser credit terms, slower-paying customers, or aggressive revenue recognition. A steady pattern in which the change stays small relative to sales growth usually points to healthy collections.
A: Revenue sold on credit is counted in net income before the customer pays. The cash has not arrived yet, so the indirect method subtracts the increase to bring net income back to the cash actually received.
A: Often close, but not always. Acquisitions, divestitures, currency translation, and write-offs change the balance sheet amount without passing through this operating line, so the two can differ.
A: The company billed much more than it collected during the period. That is normal for a fast-growing business, but if it persists while growth slows, it can point to collection problems.
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