How to Record a Completed Unit Sale Where the Buyer Uses a Bank Mortgage
Recognizing revenue at sale and recording a receivable from the buyer's bank when mortgage proceeds settle to the developer.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (Bank/Buyer) | Asset (+) | 850,000.00 | - |
| Property Sales Revenue | Revenue (+) | - | 850,000.00 |
| Cost of Property Sold | Expense (+) | 500,000.00 | - |
| Property Inventory | Asset (-) | - | 500,000.00 |
💡 Accountant's Note
When a buyer uses a bank mortgage, the developer records a receivable from the buyer's bank. Cash arrives after the bank processes the disbursement, typically within a few days of signing.
Practitioner & Systems Framework
💻 ERP Architecture
Revenue is recognized at the point of title transfer (Lands & Survey registration) — the payment mechanism (cash or mortgage) does not affect the timing of revenue recognition. The receivable from the bank is typically settled within 1–5 business days of registration. Monitor the receivables aging for mortgage-funded sales — delays in bank disbursement create short-term cash flow gaps. In Jordan, banks require the property to be registered in the buyer's name (or the bank's name as mortgagee) before disbursing the mortgage — this ensures the revenue recognition timing and the cash collection timing are closely aligned.
⚠️ Audit Flags
Auditors trace mortgage-funded sale receivables to bank disbursement confirmations. Revenue should not be recognized before registration, even if the bank has verbally committed to the mortgage. Post year-end collections of year-end receivables from mortgage-funded sales provide evidence that the receivable is real and the revenue was appropriately recognized.
📄 Required Documentation
Bank mortgage approval letter, sale and purchase agreement, title transfer documentation confirming registration and mortgage annotation, bank disbursement confirmation, accounts receivable aging (mortgage-funded sales), COGS entry for the specific unit, and any conditions precedent to mortgage disbursement.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.