Receivables appraisal
Receivables are an element of circulating
capital, i.e. a due amount to be paid to organization by legal entities and
individuals. Virtually, the receivables are similar to bills of exchange or
promissory notes trading on the stock market.
Generally, the receivables appraisal is required for company’s financial efficiency
studies; assignment of receivables; distrainment.
In the course of receivables appraisal the following shall be taken into account:
debtor financial status, availability of
security agreement, right to demand performance that forms the basis for
receivables calculation, potential demand for receivables.
When appraising the receivables, it should be understood that when the receivables
amount to 30% of the company’s balance sheet assets they may have significant
effect on the company’s economical performance results and on the market value
of the company’s business (shares, assets, etc.).
The receivables appraisal is required in the following events:
·
company’s financial efficiency studies;
·
assignment of receivables;
·
legal proceedings pertaining to resolution of property disputes and
distrainment.