Transfers of accounts receivable
Response to the following problem:
Huling Associates plans to transfer $300,000 of accounts receivable to Mitchell Inc. in exchange for cash. Huling has structured the arrangement so that it retains substantially all the risks and rewards of ownership but shifts control over the receivables to Mitchell. Assuming all other criteria are met for recognizing the transfer as a sale, how would Huling account for this transaction under IFRS? Under U.S. GAAP?