Long-Term Notes Receivable

What is Long-Term Notes Receivable?

Long-Term Notes Receivable is the money that customers or others owe to the company that will be collected after one year or beyond the company’s normal operating cycle. Because the collection period is longer, these receivables are often secured by notes or similar agreements and usually earn interest.

These amounts usually come from customers buying goods or services on credit for a long period, but they can also include other types of long-term loans.

What does Note Receivable - Long Term include?

• Finance receivables from finance subsidiaries

• Investments in sale-type leases

• Loans to other companies

• Long-term loans to employees

• Notes receivable from shareholders

• Receivables from affiliated companies (when not related to control)

• Stock subscription receivables

These receivables are shown as assets on the balance sheet, representing future cash the company expects to receive over a longer period.