Accounts Receivable Information
Accounts receivable represent a significant component of working capital and are closely examined during the due diligence phase of any business acquisition. The buyer and seller must agree on which receivables transfer, how they are valued, and what happens to uncollected amounts after closing. In many asset sales, the seller retains receivables and collects them post-closing, while the buyer starts fresh. If receivables are included, the purchase agreement typically includes representations about their collectibility and aging, along with a holdback or adjustment mechanism for uncollected amounts.
Florida Legal Definition
Under Florida law, accounts receivable are considered intangible personal property. In an asset sale, the assignment of receivables must be documented in the bill of sale or asset purchase agreement. If the business has granted a security interest in its receivables under Article 9 of the Uniform Commercial Code (as adopted in Florida Statutes Chapter 679), those liens must be identified and released or assumed as part of the transaction. Florida Statute §679.4061 governs the discharge of security interests in accounts.
How It's Used in Practice
In practice, attorneys structure receivable transfers carefully to avoid disputes about collection responsibility. A common approach is to perform an aging analysis, exclude receivables older than 90 days, and include a purchase price adjustment clause. If the seller retains receivables, the buyer may agree to assist with collection during a transition period. For businesses with significant receivable balances, the treatment of these assets can materially affect the purchase price and closing settlement.
Key Takeaways
- Accounts receivable are money owed to a business by its customers.
- In asset sales, receivables may be included, excluded, or subject to adjustment.
- Due diligence includes an aging analysis to assess collectibility.
- Security interests in receivables under UCC Article 9 must be identified.
- Purchase agreements should clearly define post-closing collection responsibilities.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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