Definition: Trade credits

Category: Balance of Payments, IMF

Trade credits consist of claims and liabilities arising from the direct extension of credits by suppliers and buyers for goods and services transactions and advance payments for work that I in progress an associated with such transactions. In the absence of actual data on trade credits, they may be measured by the difference between the entries for the underlying goods and services transactions recorded as of the dates when ownership changes and the entries for payments related to these transactions. Although trade credits and advances are often short-term in nature, they are subdivided into short- and long-term categories. http://ec.europa.eu/eurostat/ramon/statmanuals/files/BoP_Manual_Fifth_Edition_EN.pdf