accounts receivable

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accounts receivable

n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying its own debts. Evaluation of the chances of collecting based on history of customers' payments, quality of customers and age of the accounts receivable and debts is important. A big mistake made by people overly-eager to buy a business is to give too high a value to the accounts receivable without considering the chances of collection.

accretion: n. 1) in real estate, the increase of the actual land on a stream, lake or sea by the action of water which deposits soil upon the shoreline. Accretion is Mother Nature's little gift to a landowner. 2) in estates, when a beneficiary of the person who died gets more of the estate than he/she was meant to because another beneficiary or heir dies or rejects the gift. Example: if a brother and sister were supposed to divide a share of Dad's estate, but Brother doesn't want it, then Sister's share grows by accretion. 3) in trusts, accretion occurs when a beneficiary gets a surprising increase in benefits due to an unexpected event. (See: probate, trust)

References in periodicals archive ?
(28) The definition may have been adopted as a consequence of the New Zealand decision in Commissioner of Inland Revenue v Northshore Taverns Ltd (in liq) (2009) 10 NZCLC 264, 436 [35] (Hole AJ) which limited the New Zealand definition of 'account receivable' to what had been traditionally regarded as a book debt. Cf the subsequent New Zealand decisions: Burns v Commissioner of Inland Revenue [2011] NZHC 1363 [95] (10 August 2011) (Gendall AsJ); Strategic Finance Ltd (in rec and in liq) v Bridgman [2013] NZCA 357 (27 March 2013) [52] (White J for Arnold, Stevens and White JJ) which favoured a broad definition.
In legal terms, the defining features of book debt were that it did not contain an explicit promise by the debtor to pay the amounts listed, and it did not stipulate a time for payment.
at 12 (discussing the somewhat risky nature of book debts for which the law implied a promise to pay and noting the continued reliance on this system until as late as the 1720s).
However, it has also caused nervousness among business people who in the past have considered that their personal guarantees would be relatively safe from the bank in the event of liquidation as the overdraft would be covered by the book debt proceeds.
Since a House of Lords ruling earlier this year, a lender cannot be considered as having a fixed charge over a book debt unless they are deemed as having "control".
Mr Gardner said that, in the past, the main security for bank loans, such as overdrafts, had been the book debt of the company.
The case called into question whether book debt charges surrounding the receivership of Brumark were fixed or floating.
At FBC Manby Bowdler LLP, Gareth Ruddock acts for a range of SMEs (including construction and software companies), as well as insolvency practitioners, which the firm advises on collecting book debts.
The pledge over economic enterprise creates security over all elements of the commercial or professional business including its intangible elements (goodwill and customer database) and its tangible elements including its movable assets, rights (receivables and book debts) as well as the location where commercial activities are carried out.
Of the total consideration for the acquisition, GBP 3.5m is payable in cash on completion with the balance due on the anniversary of completion subject to the satisfactory collection of book debts and work in progress.
Book debts totalling PS308,978 has been discounted to just over PS245,000 to provide for doubtful debts and collection costs and the site of the business is up for sale at West Chirton Industrial Estate and is being marketed by Sanderson Weatherall.