Definition
Trade credits and advances are financial claims that arise from the direct extension of credit by suppliers of goods and services to their customers, and advances for work that is in progress or to be undertaken, in the form of advance payments by customers for goods not yet provided and services not yet rendered.
Further information
Trade credits and advances fall under category 8.1 of the financial instruments classification, according to the European System of Accounts 2010, within the aggregate ‘Other assets/liabilities,’ categories 7 and 8.
Classification of financial instruments (European System of Accounts 2010).
Related concepts
References
- Sixth Edition of the IMF’s Balance of Payments and International Investment Position Manual.
- European System of Accounts 2010. Interactive version.
Update date: January 2025
