Final Answer:
When should a transfer of receivables to another party be recorded as a sale ,The transferee has the right to pledge or exchange the transferred assets. The transferred assets are isolated from the transferor. The transferor does not maintain effective control over the transferred assets through an agreement to repurchase or redeem them prior to their maturity.
Correct option is D. All of the above.
Step-by-step explanation:
The transferee has the right to pledge or exchange the transferred assets: When a transferor retains the right to pledge or exchange the assets, it indicates that the transfer is not a true sale. In a genuine sale, the transferee should have the unrestricted right to use the assets as they see fit.
The transferred assets are isolated from the transferor: Isolating the transferred assets from the transferor's reach is crucial. If the assets remain under the control or influence of the transferor, it suggests that the transfer might not qualify as a sale.
The transferor does not maintain effective control over the transferred assets through an agreement to repurchase or redeem them prior to their maturity: If the transferor retains the ability to repurchase or redeem the assets, it implies a lack of true transfer of ownership. A sale involves a clear and irrevocable transfer of control.
So the correct answer is all of the above.