Dear friends
I would like your kind assistance on the following situation.
The main activity of company X, which is a collection agency,
is the acquisition of portfolios of loans (mortgages/consumer loans)
from bank institutions in auctions and subsequently the collection of
the money from the debtors.
The main problem of this kind of business is that it is not possible to
know the total amount which will be received from each portfolio (and when),
so it is impossible to calculate the portion of the cost of the portfolio
and match it to each part of the loan repayments received.
Which would be in your opinion the proper accounting treatment of the
above mentioned activity, bearing in mind the accounting standards (IFRS)?
How should the loan portfolios be recognized in the accounts, and by which
formula should the Company recognize its income (ie the excess of the receipts
from the debtors over the cost of acquiring the loan portfolios)?
Thanks in advance
I would like your kind assistance on the following situation.
The main activity of company X, which is a collection agency,
is the acquisition of portfolios of loans (mortgages/consumer loans)
from bank institutions in auctions and subsequently the collection of
the money from the debtors.
The main problem of this kind of business is that it is not possible to
know the total amount which will be received from each portfolio (and when),
so it is impossible to calculate the portion of the cost of the portfolio
and match it to each part of the loan repayments received.
Which would be in your opinion the proper accounting treatment of the
above mentioned activity, bearing in mind the accounting standards (IFRS)?
How should the loan portfolios be recognized in the accounts, and by which
formula should the Company recognize its income (ie the excess of the receipts
from the debtors over the cost of acquiring the loan portfolios)?
Thanks in advance