There are many conventional ways of raising Working Capital. Why, therefore, do companies use reverse factoring?
Maybe reverse factoring is used because other credit lines are not available to them. Is it a red flag moment?
Reverse factoring has been a convenient way of hiding and disguising these problems – as was seen with Carillion where approximately £0.5bn of debt apparently merited little more than a footnote in the notes to the financial statements.
UKSA welcomes and has responded to the IASB / IFRS Exposure Draft on Supplier Finance Arrangements.
