UK Trade Receivables - parked cheques

Jan 23, 2020
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United Kingdom

I hope you can help in shedding some light on the treatment for receivable impairment provision under IFRS 9

Trade Receivable cheques received with endorsed date say in 6 or 12 months time, in other words, a client sends a cheque in order to settles some invoices and the cheque has a future date of say six, or more, months time. The cheque is not posted in the books, it is held and deposited at the bank nearing the time of the future date.

Like I said, the invoices show still outstanding as the cheque is not posted in the books; the payment terms of the client is 30 days.

Under IFRS 9, would it be prudent to account for impairment provision towards these o/s invoices?

  • My question is whether under IFRS/accounting, is correct not to post the cheques in accounting (books) as when they (cheques) are received (?)
  • If the cheques are not posted in accounting, due to the future dates, should a provision for impairment be made?

I hope the above is clear

Thanks in advance



Werner Reisacher

VIP Member
Jun 30, 2017
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Not withstanding IFRS 9, I would apply common sense. A "postdated" check is not much more than a piece of paper. From a credit risk point of view, a verbal promise of the customer to eventually pay you has the same value. It is what it is - a promise.
If you are prepared to supply goods to a customer who needs 12 months credit terms, have that customer at least sign a promissory note. This is a legal document that allows you to implement legal action if he is not able to honor his promise to pay at due date.
Which ever, a 100% "bad debt allowance" needs to be set up until the account is fully settled.

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