| Commentary

382 Received and receivable income

| Commentary

382 Received and receivable income

It is of crucial importance, when negotiating commission arrangements, to be conscious of the difference between received income and receivable income. A distributor will normally wish its commission to be calculated with reference to receivable income. Where this is accepted, the company will be paying a commission on income which may never be received - since at least some part of receivable income will constitute bad debts.

Where receipts are calculated on a 'source' basis, a distributor will normally protect itself from having to pay the company the amount of any bad debts by providing

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