Notes Receivable

What notes receivable covers

A note receivable is the lender's side of the same arrangement: a formal written claim to a fixed amount, usually bearing interest. Interest income is earned over time, and the note is presented as current or non-current depending on when it matures. A dishonoured note is transferred back to receivables rather than written off automatically.

These challenges cover acceptance, interest accrual, collection and dishonour.

Where marks are usually lost

• Recognising the full interest at inception rather than accruing it over the term.
• Miscounting the days when interest is computed on an exact-days basis.
• Writing off a dishonoured note immediately instead of reclassifying it.