settlement

(noun)

The delivery of goods by the seller and payment for them by the buyer, under a previously agreed trade or transaction or contract entered into.

Related Terms

Examples of settlement in the following topics:

  • Defining Liabilities

    • In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.
    • A duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services, or other transaction yielding an economic benefit due at a specified or determinable date, on occurrence of a specified event, or on demand.
    • A duty or responsibility that obligates the entity to another, leaving it little or no discretion to avoid settlement.
    • The following is a quotation from the International Financial Reporting Standards (IFRS) Framework: "A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. "

  • Defining Current Liabilities

    • In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of future economic benefits.
    • A duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services, or other transaction yielding an economic benefit, at a specified date, on occurrence of a specified event, or on demand.
    • A duty or responsibility that obligates the entity to another entity, with no option to avoid settlement.

  • Terminology of Accounting

    • A liability is an obligation of an entity arising from past transactions, the settlement of which may result in the transfer of assets, provision of services, or other yielding of economic benefits in the future.
    • A responsibility to others that entails settlement by future transfer of assets, provision of services, or other transactions,
    • A responsibility that obligates the entity to another, leaving it little or no discretion to avoid settlement, or

  • Dealing with Foreign Currency and Bad Debts

    • A foreign currency transaction requires settlement in a currency other than the functional currency.
    • A change in exchange rates between the functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction.

  • Types of Receivables

    • Receivables can be classified as accounts receivables, notes receivable and other receivables ( loans, settlement amounts due for non-current asset sales, rent receivable, term deposits).

  • Classifying Receivables

    • On a company's balance sheet, receivables can be classified as accounts receivables or trade debtors, bills receivable, and other receivables (loans, settlement amounts due for non-current asset sales, rent receivables, term deposits).

  • Recognizing Accounts Receivable

    • When accounts receivables are not paid, some companies turn them over to third party collection agencies or collection attorneys who will attempt to recover the debt via negotiating payment plans, settlement offers or pursuing other legal action.

  • Preparation of the Income Statement