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Jan 08, 2015 at 08:39 AM

Riba - Italy Incoming Bill of Exchange


Hello Experts,

I would need your light to help me understanding Riba accounting entries.

I have found an interesting wiki page giving a good exemaple of those : Bill of Exchange and examples for customer - ERP Financials - SCN Wiki

Nonetheless there is some points I do not understand clearly.

When we run FBWE to generate the file to be presented to the bank

Bank sub account (Bill of exchange collection) Dr

Bill of exchange contingent liability Cr

After bill due date, we would need to reverse contingent liability

Bill of exchange contingent liability Dr

Customer Bill of Exchange Cr

In that way, we reverse receivable entry entered when we have run F110 ( Customer receivable Cr - Customer Bill of Exchange Dr), but I thought that we would have reverse this entry only from the moment we receive the payment (stated on the Bank statement).

Why this entry ?

When do we have to run this transaction ? before or after receiving bank statement ?

Furthermore, the presentation to the bank should not generate (in my view) any accounting entry...

When payment ok

Bank account Dr

Bank sub account (Bill of exchange collection) Cr

What would be the accounting entry when bank informed us that BOE has not been honored by the customer in between ? (failed payment)

Thank you for your precious help.