Including Trade Credits in your accounting system is a straightforward process and there are a number of clear guidelines to follow under GAAP.
Accounting and Trade Credit
Receiving Trade Credits in return for assets
- Active restores value of asset by issuance of trade credits up to the three times of net realisable value of asset.
- For example you have product (inventory) with a book value of $300,000 though with a realisable value of $100,000, Active with its model provide 300,000 in value to you generating $200,000 bottom line benefit.
- Active will provide you a suggested accounting treatment of above which could be reviewed by your Auditors/Accountants and is widely accepted by local GAAP.
Spending Trade Credits
- When your company purchases media and services, trade credits will be used to pay for the services.
- For example you place a media campaign for $1.5 million.
- $1.2 million will be paid in cash and $300,000 will be covered with trade credit redemption.
- Active can provide a tailored accounting treatment to suit the needs of specific clients.
Trade Credit Solution
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