The Financial Reporting Standard C-3 (NIF C-3), Accounts Receivable, establishes recognition, valuation, presentation, and disclosure criteria for this key item in the financial statements. Beyond recording the balances, the NIF requires providing transparent and detailed information in the notes, so that users understand the quality, risks and characteristics of the accounts receivable.
1. General Revelations
According to paragraph 60.1 et seq., entities must include in their financial statements at least the following disclosures:
- Main concepts that make up the category
Accounts receivable from the sale of goods and services, as well as other relevant receivables (recoverable taxes, insurance claims, and other significant items), must be identified. - Accounting policy for estimating expected credit losses (ECL)
The entity must explain how the estimate is calculated, present accounting write-offs due to uncollectible assets, and an analysis of transactions (opening balance, increases, applications, and closing balance). - Concentration of risks
It must be disclosed whether there are clients or economic groups that represent more than 10% of the accounts receivable, without identifying the name, but the nature of the risk and the type of concentration (by client, currency, counterparty). - Guarantees
In the case of accounts receivable granted as collateral or subject to a lien, the amount and main characteristics of the collateral must be disclosed.
Example of Note to the Financial Statements (NIF C-3)
Note 5. Accounts Receivable
As of December 31, 2024, the Company's accounts receivable are comprised of the following:
| Concept | 2024 (MXN) | 2023 (MXN) |
|---|---|---|
| National clients | 18,500,000 | 15,200,000 |
| Foreign clients | 7,200,000 | 6,800,000 |
| VAT to be recovered | 1,800,000 | 1,450,000 |
| Claims to insurance companies | 650,000 | 400,000 |
| Others | 950,000 | 600,000 |
| Subtotal | 29,100,000 | 24,450,000 |
| (-) Estimate for expected credit losses | (2,350,000) | (1,900,000) |
| Net total | 26,750,000 | 22,550,000 |
a) Accounting policy
The Company recognizes an allowance for expected credit losses based on the 12-month expected loss model, considering the history of bad debts, sector risks, and the financial situation of customers.
b) Movement of the estimate by PCE
| Concept | 2024 (MXN) |
|---|---|
| Initial balance | 1,900,000 |
| Increase due to the estimated fiscal year | 1,200,000 |
| Applications against bad debts | (750,000) |
| Final balance | 2,350,000 |
c) Risk concentration
Accounts receivable, 35%, corresponds to two clients in the construction sector. Accounts receivable, 40%, is denominated in US dollars, primarily with clients in the US and Canada.
d) Guarantees
Accounts receivable totaling $5,000,000 were pledged as collateral to support a short-term bank loan. The collateral does not restrict the use of these accounts except in the event of default.
Conclusions
The NIF C-3 It requires entities to not only recognize and value their accounts receivable, but also explain in detail in notes the associated risks and the reasonableness of the figures presented.
- Disclosures allow users of financial information assess asset quality, the exposure to credit risk and the level of dependence on certain clients or currencies.
- The presentation of the estimate for expected credit losses (ECL) It is key to measuring the administration's prudence in risk management.
- Finally, the notes assure transparency and comparability, strengthening the confidence of investors, creditors and other stakeholders.
0 Comments