Legal Definitions - unrealized receivable

Definition: An unrealized receivable is an amount earned but not yet received. It refers to money that a business has earned but has not yet been paid by its customers.

For example, if a company has completed a project for a client but has not yet received payment, the amount owed by the client is considered an unrealized receivable. Another example is when a company has sold goods to a customer on credit, and the customer has not yet paid for the goods.

Unrealized receivables have no income-tax basis for cash-basis taxpayers. This means that businesses that use cash-basis accounting cannot claim the income from unrealized receivables until they receive the payment.

Overall, an unrealized receivable is an important concept for businesses to understand as it affects their cash flow and financial statements.