Loans receivable definition
/What are Loans Receivable?
Loans receivable is an account in the general ledger of a lender, containing the current balance of all loans owed to it by borrowers. This is the primary asset account of a lender. A subsidiary ledger may be used to store the detail on each of the loans outstanding, where the ending balance in the subsidiary ledger matches the ending balance for the loans receivable account in the general ledger.
Presentation of Loans Receivable
The presentation of loans receivable in an organization’s balance sheet will depend on whether loans are to be repaid within one year. When that is the case, then the receivable is classified as a current asset. Otherwise, it is classified as a non-current asset, and so will appear lower down in the balance sheet presentation.