Boeing is one of the world’s major aerospace firms with operations involving commercial aircraft, military aircraft, missiles, satellite systems

Boeing is one of the world’s major aerospace firms with operations involving commercial aircraft, military aircraft, missiles, satellite systems, and information and battle management systems. As of a recent year, Boeing had $4,864 million of receivables involving U.S. government contracts and $2,250 million of receivables involving commercial aircraft customers such as Delta Air Lines and United Airlines.

Should Boeing report these receivables separately in the financial statements or combine them into one overall accounts receivable amount? Explain.

Answer:

Accounts receivable from the U.S. government are significantly different from receivables from commercial aircraft carriers such as Delta and United. In its filing with the Securities and Exchange Commission, Boeing reports the receivables together on the balance sheet but discloses each receivable separately in a note to the financial statements.