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An unrealised receivable refers to money that a business has earned but has not yet been received. It can occur when a company completes a project for a client but has not yet received payment, or when goods are sold on credit and the customer has not yet paid. For cash-basis taxpayers, unrealised receivables have no income-tax basis, meaning the income cannot be claimed until payment is received. Understanding unrealised receivables is crucial for businesses as it impacts their cash flow and financial statements.
An unrealized receivable refers to an amount owed to a person or entity that has not yet been collected or realized. It represents a potential future payment that has not been received.
An unrealized receivable is an amount that has not been collected yet, while a realized receivable is an amount that has been received and is no longer outstanding.
Yes, an unrealized receivable can be legally enforced through various means, such as filing a lawsuit or pursuing alternative dispute resolution methods, to collect the outstanding amount.
Unrealized receivables can occur due to various reasons, including non-payment by a debtor, disputes over the amount owed, financial difficulties faced by the debtor, or delays in payment.
To protect yourself from unrealized receivables, it is advisable to have clear and enforceable payment terms in contracts, conduct thorough credit checks on potential debtors, and promptly follow up on any overdue payments.
Yes, you can generally charge interest on an unrealized receivable if it is specified in the contract or if there are applicable laws or regulations allowing for the imposition of interest on overdue payments.
Legal actions to collect an unrealized receivable may include sending demand letters, initiating a lawsuit, obtaining a judgment, garnishing wages or bank accounts, or seeking assistance from a collection agency.
Yes, there is usually a statute of limitations that determines the time within which legal action can be taken to collect an unrealized receivable. The specific time limit varies depending on the jurisdiction and the nature of the debt.
In some cases, you may be able to write off an unrealized receivable as a bad debt for tax purposes. However, specific criteria and procedures must be met, and it is advisable to consult with a tax professional or accountant for guidance.
Yes, it is possible to sell your unrealized receivable to a third party, such as a debt buyer or collection agency. However, the terms and conditions of such a sale should be carefully reviewed and negotiated to protect your interests.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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