Derecognition of receivable

IFRS 9 only allows an entity to derecognized the FA once the entity has transferred substantially the risk
and reward of the FA. In the case of Robby, as they agreed to reimburse the factor for any shortfall, thus
Robby has not transferred the risks and reward for the receivable. Therefore, they are not allowed to
derecognized the receivable.

As Robby has derecognized the receivable, they would need to recognized them back. Meanwhile, the
advancement received from the factor will be treated as a short-term liability.